Refer to Figure 8.1. Holding other variables constant, an increase in the real wage rate will result in a
A) shift from curve D1 to curve D2.
B) shift from curve D2 to curve D1.
C) movement from point A to point B.
D) movement from point B to point A.
D
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When the current U.S. income tax system was instituted in 1913, the rate on the highest tax bracket was _____
a. 28 percent b. 1 percent c. 15 percent d. 7 percent
The widespread fall in the prices of homes caused consumers to:
A. decrease their spending, as they struggled to pay back debt. B. increase their spending, as they devoted their money to things other than homes. C. decrease their spending, and increase their debts. D. increase their spending, as saving was viewed as a bad investment.
A combination of two goods which lies beyond the production possibilities curve indicates: a. underutilization of resources
b. overutilization of resources. c. constant opportunity costs. d. a combination that cannot be produced with existing resources. e. society's most preferred combination of two goods.
Which of the following statements best expresses why economic efficiency should be society's first goal?
A. Since the consensus on what is a fair distribution of goods is impossible, efficiency is the next best goal. B. Efficiency gives the poor an incentive to improve their economic status. C. Efficiency maximizes total economic surplus and thereby allows other goals to be more easily achieved. D. People are not really concerned about the problems of the poor, so government must address them instead.