The differential taxation of inputs does not create an excess burden.
A. True
B. False
C. Uncertain
B. False
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When the marginal social benefit of Good A is greater than the marginal private benefit of Good A, then
A) competitive, unregulated markets will produce a quantity of Good A that is less than the efficient quantity. B) competitive, unregulated markets will produce the quantity of Good A that is equal to the efficient quantity. C) competitive, unregulated markets will produce a quantity of Good A that is greater than the efficient quantity. D) the government should levy a tax on the production of Good A that is equal to the horizontal distance between the two marginal cost curves.
One drawback of deferred payments is that
A) employees may shirk anyway. B) employers might fire high achievers to avoid paying higher wages or bonuses. C) it is difficult to determine who are the good and who are the bad workers. D) employees have to work for the firm for a long time.
The problem with allocating income according to productivity is that some people have difficulty earning income
a. True b. False
Suppose most economists agree that the target rate of unemployment is between 4 and 7 percent. If the actual unemployment rate is 11 percent, then most economists would agree that:
A. contractionary monetary and fiscal policies are appropriate. B. both expansionary and contractionary policies are appropriate. C. expansionary monetary and fiscal policies are appropriate. D. neither expansionary nor contractionary policies are appropriate.