A professor's students are not getting good grades because of lack of studying. A behavioral economist would say that one reason the students are not studying is that:
A. the professor is not forcing the students to study for the tests.
B. they prefer to hang out with friends and watch television and therefore are making an optimal choice.
C. we live in a society in which grades in college are not important.
D. the cost of studying (not being with friends) would have to be paid now, whereas the benefit (better grades) comes later.
Answer: D
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In the actual economy, goods and services are purchased by
a. households, but not firms or the government. b. households and firms, but not the government. c. households and the government, but not firms. d. households, firms, and the government.
The table above shows the distribution of income in Swacko. The government of Swacko imposes a 20 percent tax on the people with the highest 40 percent of income
The government then distributes 50 percent of the tax collected to the lowest 20 percent and 25 percent to the second 20 percent and the middle 20 percent. Suppose that the before-tax group incomes remain as above. Before and after the distribution, what percentage of national income belongs to the lowest 20 percent? A) 2 percent; 10 percent B) 20 percent; 20 percent C) 5 percent; 25 percent D) 2 percent; 2 percent
If the government increases the income tax rate:
A. disposable income decreases. B. disposable income increases. C. disposable income remains unaffected. D. total income increases.
Which of the following is the best measure of size of government as a share of the economy?
A) total government expenditures as a percentage of GDP B) the supply of money as a percentage of GDP C) public consumption plus private investment as a percentage of GDP D) private consumption as a percentage of Gross Domestic Product