Assume that DeShawn is a single parent who is in poverty. He receives food stamps and Medicaid. For every $100 that he earns, DeShawn loses $35 of his food stamp benefits and $20 in his Medicaid benefits. Also, DeShawn's income is taxed at a rate of 10 percent. Then, Peter's effective marginal tax rate is
a. 45 percent.
b. 55 percent.
c. 65 percent.
d. 70 percent.
C
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Suppose the equilibrium price of a gallon of milk is $4. If the government imposes a price floor of $5 per gallon of milk,
A) the quantity supplied of milk exceeds the quantity demanded. B) the quantity supplied of milk falls short of the quantity demanded. C) the supply increases. D) the market will not be affected. E) there will be a shortage of milk.
When Norway unilaterally fixes its exchange rate against the euro and leaves the krone
A) free to float against the non-euro currencies, it is able to keep at least some monetary independence. B) free to float against the non-euro currencies, it is unable to keep at least some monetary independence. C) free to float against the non-euro currencies, it is able to keep its monetary independence. D) run by crawling peg against the non-euro currencies, it is able to keep at least some monetary independence. E) fixed against the non-euro currencies, it is unable to keep its monetary independence.
Bank regulation exists because public authorities are convinced that
a. the balance between public interest and safety does not affect profitability, and should be removed from the hands of managers. b. the balance between bank profitability and public interest cannot be handled with legislation, but can be handled with regulation. c. the balance between bank profitability and safety cannot be left to profit-maximizing managers. d. the balance between bank safety and public interest can best be obtained by reliance on the market.
Forcing a natural monopolist to produce where price, or marginal benefits, equals cost results in an ________ ________ to the monopolist
a. opportunity cost b. economic loss c. economic profit d. normal profit