The marginal income tax rate is equal to
A) the total tax payment divided by total income.
B) the change in the tax payment divided by the change in income.
C) the average tax payment divided by the total tax payment.
D) the percent of total income that goes to taxes.
Answer: B
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The Coase Theorem is the proposition that if the number of involved parties is low, if property rights ________ and transactions costs are ________, then private transactions are efficient
A) are nonexistent; low B) exist; high C) are nonexistent; high D) exist; low
Assume the firms in a perfectly competitive industry are initially in long-run equilibrium and the cost of labor increases. In the short run, this will cause firms in the industry to:
A) reduce output and incur a loss. B) reduce output and earn a positive economic profit. C) increase output and incur a loss. D) increase output and earn a positive economic profit.
Reserves are equal to the sum of
A) required reserves and excess reserves. B) required reserves and vault cash reserves. C) excess reserves and vault cash reserves. D) vault cash reserves and total reserves.
Which of the following could explain a fall over time in the price of the depletable resource bauxite?
A. The productivity of bauxite mines fell. B. New deposits of bauxite were discovered. C. Demand for bauxite increased over time. D. The cost of extraction increased.