A bank has $200 million in assets and $230 million in liabilities. The bank's net worth is _____________ million and the bank is ____________
A) -$215; insolvent
B) -$30; insolvent
C) $15; solvent
D) $30; solvent
B
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Which of the following can a firm do in the long run but not in the short run?
A) decrease the size of its physical plant B) reduce its rate of output by laying off workers C) increase its use of raw materials D) increase its variable costs
As a tax increases, the excess burden from increasing the tax grows faster than the corresponding tax revenue. This is the impetus behind _____
a. lump sum taxes b. the excess burden rule c. the Ramsey rule d. placing taxes only on the most inelastic goods
Suppose voter preferences over a public good funded through a head tax are single peaked. If everyone has the same tastes and the public good is a normal good, then ideal points for higher income individuals will lie to the right of ideal points of lower income individuals.
Answer the following statement true (T) or false (F)
Which of the following situations will shift a worker's labor supply curve to the left?
a. Higher nonlabor income. b. A lower wage rate, assuming the substitution effect dominates the income effect. c. New machinery that substitutes for labor and lowers its marginal product. d. A decrease in the marginal value of leisure.