The Rand Corporation estimates that the external costs imposed by alcohol consumption (for example, deaths caused by drunk drivers) to be 48 cents per ounce consumed. Taxes on alcohol amount to 23 cents per ounce consumed. This information suggests: (i) alcohol is overconsumed; (ii) alcohol taxes should be raised. Which of these statements is correct?
a. i and ii
b. i not ii
c. ii not i
d. neither i nor ii
a
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Suppose you observe a decrease in the equilibrium price and quantity of corn. Of the options listed below, this is best explained by:
A. a decrease in the cost of growing corn. B. an increase in the cost of growing corn. C. a fall in consumer income assuming corn is a normal good. D. a rise in consumer income assuming corn is a normal good.
Which of the following would be an example of case-based payment?
A. Four-tier pharmacy formularies B. Copayment waivers for primary care services C. Medicare DRGs D. All of the above
Assuming that banks have loaned all excess reserves, then an increase in checking account balances brought about by an increase in deposits is equal to:
A. (the initial deposit) × (the reserve ratio). B. (the initial deposit) × (1 / reserve ratio). C. (total reserves) × (1 / reserve ratio). D. (total reserves) × ( the reserve ratio).
A $1 billion increase in investment will cause a:
A. (1/MPS) billion increase in GDP. B. (MPS) billion increase in GDP. C. (1 - MPC) billion increase in GDP. D. (MPC - MPS) billion increase in GDP.