Taxes cause:
a. Market distortions
b. Reduce incentives to work
c. Decrease wealth creating transactions
d. All of the above
d
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Which of the following is not an example of an efficiency-equity trade-off faced by economic agents?
A) Some U.S. colleges cut back on merit scholarships since these programs siphon money from need-based programs, thus harming lower-income students with greater financial need. B) According to an article by in the American Journal of Public Health by Edward Kaplan and Michael Merson of Yale University School of Medicine, the federal government's current method of allocating HIV-prevention resources is not cost-effective. Instead of allocating resources to states in proportion to reported AIDS cases, resources should flow first to those activities that prevent more infections per dollar and then to less and less effective combinations of programs and populations until funds are exhausted, even if it means that some populations would be left without any prevention services. C) Concerned about the falling birth rate, the French government has pledged more money for families with three children, in an effort to encourage working women to have more babies. D) The growing demand for corn by ethanol producers has led to a surge in the price of tortillas, a staple in the Mexican diet. To quell public outcry over rising tortilla prices, the Mexican government released government corn stocks at prices well below the market, and pressured states to impose price ceilings on tortillas.
Economists and others use economic theory
a. only to analyze situations in which money changes hands. b. as a partial basis for public policy recommendations. c. to confuse their enemies. d. to replace value judgments about important policy issues.
Which of the following government activities is motivated by a concern about efficiency? Check all that apply.
A. Breaking up Standard Oil (which once owned 90% of all oil refineries) into several smaller companies B. Imposing higher personal income tax rates on people with higher incomes C. Providing some poor people with vouchers that can be used to buy food D. Regulating cable TV prices E. Prohibiting smoking in public places F. Instituting laws against driving while intoxicated
Which of the following is true of a beneficial supply shock?
What will be an ideal response?