If the government wishes to raise revenue by taxing cigarettes, it
A. is best to tax the producer since they will not cut production just because of the tax.
B. makes no difference whether the consumer or the producer actually transfers the money to the government since the market effects are the same.
C. is best to have the consumers pay the tax since they view cigarettes as necessities.
D. is foolish since a sales tax increase leads to less tax revenue in an industry like tobacco.
Answer: B
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In the United States, of the following decades economic growth was most rapid during the ________
A) 1960s B) 1990s C) 1970s D) 2000s
Refer to Table 4-7. Suppose that the quantity of labor supplied decreases by 80,000 at each wage level. What are the new free market equilibrium hourly wage and the new equilibrium quantity of labor?
A) W = $8.50; Q = 550,000 B) W = $11.50; Q = 610,000 C) W = $12.50; Q = 550,000 D) W = $8.50; Q = 630,000
Conflicts of interest is a type of ________ problem that occurs when a person or institution has multiple objectives that are in conflict with each other
A) moral hazard B) adverse selection C) risk sharing D) spinning
The "Public Choice" school of economists argue that:
a. the invisible hand of the market is inefficient in allocating resources to their best uses. b. the government often does not take correct economic decisions as it is run by self-interested politicians. c. the government takes correct decisions as it is run by conscious and educated individuals. d. the market fails to maximize social efficiency. e. the government is a non-profit making organization which works to maximize social efficiency.