Suppose your neighbor likes to repair motorcycles in his front yard during evenings and on weekends, and he earns $400 per week from this work
However, the sight of piles of greasy motorcycle parts and the additional noise and traffic caused by his customers reduces your value of living in this neighborhood by $300 per week. If your neighbor has a right to operate this business, what is the efficient outcome? A) He continues to operate the business.
B) You can pay him to move the business to another location.
C) He pays you to let him continue working on motorcycles at his home.
D) There is no efficient outcome from this situation.
A
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Mr. Johnson earns $100,000 per year. Each year he spends $70,000 and saves $30,000. He pays 5 percent sales tax on all his spending. Assuming this is only tax he pays, his average tax rate out of his income is:
a) 5.0 percent b) 1.5 percent c) 3.5 percent d) 2.5 percent
Futures contracts are marked-to-market
A) every day. B) every week. C) every month. D) every quarter.
The hot-hand fallacy:
A. is the belief that once an event has occurred several times in a row, it is less likely to repeat. B. is the belief that once an event has occurred, it is less likely to repeat. C. is the belief that once an event has occurred several times in a row, it is more likely to repeat. D. is the belief that if an event has never occurred, it is more likely to occur.
Which of the following would decrease the size of a federal budget deficit?
a. a recession b. an increase in defense spending c. growth in real GDP d. a decrease in tax revenues e. an increase in transfer payments