When income taxes are ________ progressive, then output is ________ sensitive to price-level changes
A) more; more
B) more; less
C) less; more
D) less; less
B
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In insurance markets, moral hazard creates economic inefficiency because:
A) insurance companies are price setters rather than price takers. B) insurance products are not homogenous goods. C) there are many buyers but only a few sellers. D) insured individuals do not correctly perceive the costs or benefits of their actions.
Human capital differs from physical capital in that
A. human capital is intangible. B. human capital is tangible. C. physical capital is intangible. D. human capital has no cost to acquire.
You are the Minister of Trade for a small island country with the following annual PPC:
You are negotiating a trade agreement with a neighboring island with the following annual PPC:
If the other island's delegate offers to give you 2 fish for every 1 coconut you give them, you will:
A. accept their offer because you do not have the comparative advantage in fish. B. refuse their offer because the opportunity cost to you of a coconut is less than 2 fish. C. refuse their offer because the opportunity cost to you of a coconut is more than 2 fish. D. accept their offer because you do not have an absolute advantage in fish.
Start-up costs:
A. have no impact on the number of firms in an industry because they are sunk costs. B. are the one-time costs incurred when beginning the production of a new product. C. are inversely related to variable costs. D. are always greater than marginal costs.