If Alejandra makes $46,000 per year as a nurse and pays $7,000 in taxes while Emily makes $46,000 per year as a high school teacher and pays $6,500 in taxes, this is an example of
A. Vertical inequity.
B. Marginal inequity.
C. A flat tax.
D. Horizontal inequity.
Answer: D
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Consider a two-person, two-strategy game in which only pure strategies are played. Such a game must have at least one
a. Nash equilibrium. b. player with a dominant strategy. c. Pareto-optimal outcome. d. outcome that is both a Nash equilibrium and Pareto optimal.
It costs a firm $80 per unit to produce product A and $50 per unit to produce B individually. If the firm can produce both products together at $120 per unit of product A and B, this exhibits signs of
a. Economies of scale b. Economies of Scope c. Diseconomies of Scale d. Diseconomies of Scope
The repurchase agreement market was an important ingredient of the Great Recession because:
a. It is the market on which mortgages are repurchased, and, due to the Great Recession, this market dried up. b. It is the market on which many companies finance their daily working capital needs and, due to the Great Recession, this market dried up. c. Many repurchase agreements were with subprime mortgages, and few investors would purchase them. d. All of the above.
Which of the following would be most likely to contribute to the breakdown of a cartel in a natural resource (e.g., bauxite) market?
a. high prices b. low price elasticity of demand c. high compatibility of member interests d. unequal member ownership of the natural resource