To combat the undersupply of public goods, a solution is:
A. to change social norms around consumption of the good.
B. for the government to step in and provide it directly.
C. put a quota on the amount that people can consume.
D. to place a quota on the consumption of the good.
Answer: B
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The total burden of a tax is the
a. absolute number of dollars an individual pays. b. percentage of income a person pays. c. number of dollars a person must be given after taxation to make him as well off as he was before taxation. d. revenue lost to loopholes.
Suppose China can produce either 300 telephones or 200 DVD players, and Japan can produce either 200 telephones or 100 DVD players. Implicitly, Japan has
A. Both an absolute and a comparative advantage in telephones. B. Neither a comparative nor an absolute advantage in telephones. C. A comparative but not necessarily an absolute advantage in telephones. D. An absolute but not necessarily a comparative advantage in telephones.
Which of the following is a long-run impact of an increase in the wage?
A. The quantity demanded of labor increases because there are no diminishing returns. B. The quantity demanded of labor increases because the marginal revenue product curve shifts upward due to a higher product price. C. The quantity demanded of labor decreases because firms face a higher degree of diminishing returns. D. The quantity demanded of labor decreases because firms will have an incentive to use more of other inputs instead of labor.
The "underground economy" refers to
A) the buying and selling of goods that is concealed from the government. B) the production of goods and services used by the government for covert spy operations. C) the sector of the economy that earns profits that are higher than average. D) the formal sector of the economy in developing countries.