Refer to the information provided in Table 19.4 below to answer the question(s) that follow.Table 19.4Total IncomeTotal Taxes$10,000 $1,000 20,000 2,400 30,000 4,500 40,000 8,000Related to the Economics in Practice on page 393: Refer to Table 19.4. If income increases from $30,000 to $40,000, the marginal tax rate is
A. 5%.
B. 20%.
C. 35%.
D. indeterminate from this information.
Answer: C
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Government purchases of goods and services are
A. exhaustive because they directly absorb or employ resources and account for production. B. neither exhaustive or nonexhaustive because of the tax revenues that finance these purchases. C. nonexhaustive because they do not directly absorb resources and account for production. D. both exhaustive and nonexhaustive because in some cases they do directly absorb resources or account for production and in other cases they do not.
Does the proprietor of a grocery store who owns the building in which his business is located have lower costs than a grocery store proprietor who must pay rent for the building in which his store is located?
A) No, because no two businesses will be exactly the same. B) No, because the owner-proprietor loses the rent he could otherwise have been paid. C) Yes, because he can afford to set lower percentage markups. D) Yes, if the cost saving is not offset by higher expenses in other areas.
A market demand curve measures
A) how much a consumer is willing to pay for an additional unit of the good. B) the marginal social benefit of an additional unit of the good. C) the marginal social cost of an additional unit of the good. D) Both answers A and B are correct.
Monopolistically competitive firms prevent the efficient use of resources because in long-run equilibrium,
A. price is greater than marginal cost. B. price equals marginal cost. C. price is less than marginal cost. D. marginal cost is greater than average total cost.