According to the Incentive Principle, people will be less likely to smoke if the government:
A. invests more money in cancer research.
B. increases taxes on smoking-cessation devices such as nicotine patches.
C. increases taxes on cigarettes, effectively raising the price.
D. subsidizes hospitals treating lung disease.
Answer: C
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Consider two countries: A and B. Assume that both countries are exactly similar until the year 2000. At the beginning of year 2000, both countries decide to change their strategy for economic growth
Country A plans to encourage immigration and increase human capital in the economy to achieve sustained growth, while Country B decides to make large investments in research and development to achieve sustained growth. Which of the two countries is more likely to experience sustained growth and why?
If a taxpayer itemizes deductions, then an exemption is worth the same as a deduction
a. True b. False
What is one of the traditional political uses of tariffs?
a. protection of borders b. protection of vested economic interests c. protection of military secrets d. protection of exchange rates
Prospect theory in behavioral economics predicts that as the price of flour increases, bakeries will try to avoid turning off their buyers by:
A. Increasing the unit prices of their products B. Reducing the unit sizes of their products C. Producing more units of their products D. Passively accepting lower profits