5 Steps To A 5 500 AP Microeconomics Questions To Know By Test Day 3rd Edition Anaxos Inc, Brian Reddington - Solutions

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In comparison to the demand curve for all consumers, the slope of the demand curve for an individual consumer of a public good will be(A) more steep(B) more flat(C) the same(D) horizontal(E) vertical
The equilibrium price of this public good will be(A) MB1 = MC(B) MB2 = MC(C) MB3 = MC(D) MB SUM = MC(E) none of the above
The graph shows demand curves for a(n)(A) private good(B) inferior good(C) luxury good(D) public good(E) capital good
The demand curve for a public good is(A) the horizontal sum of each consumer’s demand curve(B) the vertical sum of each consumer’s demand curve(C) not measurable(D) always horizontal(E) always vertical
Phantom demand refers to(A) goods and services that consumers purchased in the past(B) unaffordable goods and services(C) market failure(D) demand for public goods that consumers cannot purchase directly(E) demand that would exist if the economy expanded
The government provides elementary school education to all students, and once the students graduate they begin work at local businesses. Productivity increases at these businesses. This is an example of(A) spillover costs(B) spillover benefits(C) negative externalities(D) the Gini ratio(E) market
When a government grants a property tax exemptions to universities but many students still cannot afford to attend universities,(A) it is creating a consumer subsidy(B) it is creating a producer subsidy(C) university education is a public good(D) university education is a private good(E) both B and
When a government subsidizes student grants to attend university for all students,(A) it is creating a consumer subsidy(B) it is creating a producer subsidy(C) university education is a public good(D) university education is a common resource(E) both A and D
If firms underproduce a good or service and charge a price that is too high, it is likely(A) a negative externality exists(B) a positive externality exists(C) spillover costs are high(D) the economy is expanding(E) there is a government subsidy
The Coase theorem would not apply to a factory that was polluting a river near a city because(A) the pollution affects many people(B) the factory’s liabilities are very clear(C) negotiating costs are low(D) the negotiation process is efficient(E) there are no negative externalities
According to the Coase theorem, consumers can reach an agreement when(A) negotiating costs are low(B) marginal cost does not equal marginal benefit(C) the government intervenes(D) positive externalities are present(E) negative externalities are not present
A freeway is open to all citizens and does not charge a toll.At rush hour, the freeway does not have enough room for all drivers.During rush hour, the freeway is(A) a public good(B) a private good(C) a quasi-public good(D) a common resource(E) none of the above
A city charges drivers a toll to cross a bridge. The bridge has enough capacity to handle normal traffic. The bridge is a(A) common resource(B) public good(C) quasi-public good(D) private good(E) none of the above
The government allows all citizens to hunt birds on federal land. The birds are an example of a(A) public good(B) common resource(C) quasi-public good(D) private good(E) none of the above
Cities B and C have the same Gini ratio. City B implements a flat tax and city C implements a regressive tax. As a result,(A) city B will have a higher Gini ratio than city C(B) city C will have a higher Gini ratio than city B(C) city C will still have the same Gini Ratio as city B(D) both cities
Countries D and E have the same Gini ratio. Country D implements a proportional tax and country E implements a progressive tax. As a result,(A) country E will have a higher Gini ratio than country D(B) country D will have a higher Gini ratio than country E(C) country D will still have the same Gini
Country A has a Gini ratio of 0.20. Country B has a Gini ratio of 0.25. Country C has a Gini ratio of 0.30. This indicates that(A) country C has a more equal income distribution than country B(B) country B has a more equal income distribution than country A(C) country C has a more equal income
Country Y had a Gini ratio of 0.25 last year. This year, its Gini ratio was 0.30. This indicates that(A) the income distribution in country Y has become more equal(B) the income distribution in country Y has become less equal(C) country Y is experiencing a recession(D) country Y is experiencing an
Country X had a Gini ratio of 0.40 last year. This year, country X reported that its Gini ratio decreased to 0.35. We can conclude that(A) the income distribution in country X has become more equal(B) the income distribution in country X has become less equal(C) country X is experiencing a
Which item is a public good?(A) transport provided by a personal automobile(B) law enforcement provided by a police car(C) delivery provided by a pizza delivery car(D) transport provided by a rental car(E) transport provided by a personal truck
The government encourages consumers to buy efficient refrigerators by paying a rebate to consumers. As a result of the rebate,(A) demand for efficient refrigerators will shift to the right(B) supply for efficient refrigerators will shift to the right(C) demand for efficient refrigerators will shift
The government decides to encourage bus travel by paying a subsidy to bus companies for each mile traveled. As a result of the subsidy,(A) bus supply will shift to the right(B) bus demand will shift to the right(C) bus supply will shift to the left(D) bus demand will shift to the left(E) none of
Five gas stations sell 100,000 barrels of fuel. Economists calculate that burning this fuel results in air pollution that costs society$1,000,000. If regulators want the marginal social cost of fuel to equal the marginal social benefit of fuel, they should(A) pay a $10 per barrel subsidy to gas
A shopkeeper earns $100,000 and pays $15,000 in pension taxes. The next year, the shopkeeper earns $150,000 and pays $15,000 in pension taxes. The pension tax is(A) progressive(B) based on ability to pay(C) proportional(D) regressive(E) none of the above
Which of the following is NOT an example of an efficiencyenhancing tax?(A) a tax on an oil company for emitting too much carbon dioxide(B) a tax on an alcohol producer due to an increase in alcoholics(C) a tax on tobacco to try and minimize the number of smokers(D) a tax on foreign products that
A company in Portland has developed a new open-source software for companies to use in database management. This software can also be used by health care companies to storage data about patients and work on analysis. What is this an example of ?(A) the Nash equilibrium(B) a positive externality(C)
The U.S. government has decided to provide an efficiencyenhancing subsidy for companies that want to use solar panels instead of nonrenewable sources of energy. What is the goal of this subsidy?(A) to ensure that more companies continue to use nonrenewable energy sources(B) to decrease the supply
Why are efficiency-enhancing taxes used?(A) to correct for a negative market outcome or inefficiency(B) to subsidize industries that are trying to enter foreign markets(C) to subsidize companies that are producing oil and similar products(D) to tax companies that do not pay federal taxes(E) to
The government helps with the redistribution of income(A) only in a command economy(B) only in a mixed economy(C) through taxes(D) through proportional taxes only(E) only in a market economy
NASA, an organization run by the federal government, sends a satellite into space. The satellite broadcasts information about the solar system to people around the world at no charge. The satellite represents(A) a private good(B) a government subsidy(C) a positive externality(D) a public good(E)
A ride in a taxicab is a form of(A) a public good(B) a private good(C) a government subsidy(D) a positive externality(E) the free-rider problem
As income increases, the marginal tax rate increases. This is known as a(A) progressive tax(B) regressive tax(C) flat tax(D) proportional tax(E) tax bracket
If income increases and the marginal tax rate falls, this is also known as a(A) regressive tax(B) proportional tax(C) flat tax(D) progressive tax(E) tax bracket
Why are published official government statistics an example of a public good?(A) because only a select few can have access to them(B) because they are easily excludable(C) because they are developed by private entities(D) because no individual can be excluded from seeing them(E) because they are
Suppose Anna earns $50,000 a year and pays $10,000 in taxes. Her friend Sarah earns $100,000 a year and pays only $12,000 a year in taxes. This is an example of(A) a progressive tax(B) a proportional tax(C) a negative externality(D) being in a higher tax bracket(E) a regressive tax
The arrow in the graph is pointing to the area between a perfect distribution of income and the actual distribution of income. If the Gini ratio is 0.9, it is said that this graph represents(A) a highly unequal distribution of income(B) a very equal distribution of income(C) most families having
The graph represents(A) the percentage of income tax families pay in the United States(B) the percentage of families paying a regressive tax on their incomes(C) the percentage of families paying a flat tax on their incomes(D) the percentage of families paying a progressive tax in the United
Nation A has a higher Gini ratio than nation B. You can conclude that nation A(A) has a highly unequal distribution of income compared with nation B(B) has a more equal distribution of income compared with nation B(C) has an equal distribution of income compared with nation B(D) is allocating its
Fire protection provided by a fire department is an example of a(n)(A) private good(B) inferior good(C) normal good(D) public good(E) complementary good
Last year Anna earned $50,000 in gross income and paid$10,000 in taxes. She recently received a promotion. So next year she will earn $75,000 in gross income and pay $15,000 in taxes. This increase in taxes is a result of(A) a regressive tax(B) a progressive tax(C) a proportional tax(D) an ability
The information about earnings for Bill and Caroline is provided in the following table. They do not live in the same country.Which BEST describes the tax structure of these countries?(A) Bill lives in a country that has a flat tax of 10 percent, while Caroline lives in a country that has a
A “flat tax” is also known as(A) ability to pay tax(B) benefits received tax(C) proportional tax(D) income tax(E) property tax
Of the following, which is a public good?(A) a limousine(B) tickets to a baseball game(C) a subscription to the New York Times(D) a fighter jet(E) a bowl of ice cream
The fact that a firefighter’s job is more dangerous than a college professor’s job is an example of(A) compensating differential(B) a negative externality(C) the free-rider problem(D) the ability to pay principle(E) the benefits received principle
The reason a general sales tax is regressive is because(A) low-income families pay a higher portion of their income than high-income families do(B) the tax is paid for by the seller, not the buyer(C) the tax is paid for by the buyer, not the seller(D) low-income families pay less of the tax than
The information about the Gini coefficient for several countries is provided in the following table. Which has the FEWEST issues concerning inequality?(A) the United Kingdom, as its value is closest to 0.5(B) India, as it has the lowest value of the Gini coefficient(C) Belgium, as its value is in
A private business will NOT produce a good like a public radio station because(A) MC is greater than MB(B) there is zero profit for this good(C) the government owns a monopoly for this type of service(D) the free-rider problem exists(E) all of the above
If the supply curve is shifted to S2, which of the following is TRUE?(A) Marginal social costs are not reflected in the supply curve.(B) Marginal social costs are reflected in the supply curve.(C) Output has reached the socially optimum level.(D) The demand curve will also shift to the left.(E)
Tim’s earnings are shown in the following table. How much taxes would he have to pay in case he earned $135,000 in case the country he lives in has a flat tax?(A) $5,000(B) $12,000(C) $13,500(D) $15,000(E) $16,500
Tera International has discovered a permanent vaccine for the common flu. The company filed a patent which grants it a natural monopoly for this product. What can the government do to ensure that Tera produces at the allocatively efficient quantity?(A) The government should regulate a minimum
Samantha’s earnings are shown in the following table. Based on her earnings and the amount of taxes paid, which kind of taxing system is shown?(A) flat(B) progressive(C) regressive(D) incentivized(E) supplemental
A coal company has had a record-breaking quarter while operating in Indiana. Which of the following would be an example of a negative externality of production?(A) the company deciding to hire additional employees(B) the company’s factories causing environmental harm(C) the company paying higher
If firms overproduce a good or service and charge a price that is too low, it is likely that(A) a negative externality exists(B) a positive externality exists(C) spillover costs are subsidized by the government(D) the firm is at the shutdown point(E) A, C, and D
A positive externality will exist when(A) all consumers receive an equal share of economic resources(B) spillover costs are given to others not directly involved in the consumption or production of a good or service(C) the production of a good or service creates a spillover benefit(D) members of a
The private sector will NOT provide for a public good or service because of(A) the income effect(B) the interest rates effect(C) the free-rider problem(D) spillover costs(E) all of the above
A negative externality will exist when(A) all consumers receive an equal share of economic resources(B) spillover costs are given to others not directly involved in the consumption or production of a good or service(C) the production of a good or service creates a spillover benefit(D) members of a
If the U.S. government increases a tax to help redistribute income from the wealthy to the poor, it is following a(A) proportional tax system(B) tariff system(C) progressive tax system(D) regressive tax system(E) neutral tax system
If a positive externality emerges in regard to the demand curve,(A) MEB is not represented(B) MEC is represented(C) MSC is represented(D) marginal private benefits are not represented(E) none of the above
A good that is excludable to other consumers and rivals is known as a(A) public good(B) quasi-public good(C) positive externality(D) common resource(E) private good
Why are antitrust laws used by governments?(A) to prevent inequality between the rich and the poor(B) to prevent a company from using dangerous and potentially untested products(C) to prevent rapid inflation and the Federal Reserve from making independent decisions(D) to prevent corruption and
A company which produces computers emits carbon dioxide, which causes $15,000 in social costs for the community. The company earns $1,000,000 annually and considers itself to be a corporate socially responsible entity. What would be the BEST way to make the social benefit of the company operating
A cupcake manufacturer uses frosting to make cupcakes. If demand for cupcakes increases,(A) frosting demand will shift to the right(B) frosting demand will shift to the left(C) frosting demand will not change(D) frosting price will decrease(E) frosting quantity will decrease
A bicycle manufacturer purchases aluminum to make bicycles. Demand for aluminum is a(A) negative externality(B) fixed cost(C) derived demand(D) negative externality(E) factor of production
If a labor market is an oligopsony, in comparison with perfect competition it will have(A) lower wages(B) lower unemployment(C) higher output(D) less market power(E) more firms in the market
A sandwich shop uses roast beef to make sandwiches. The price of roast beef decreases. As a result,(A) MFC decreases(B) profit decreases(C) MP decreases(D) labor demand decreases(E) fixed cost decreases
A soft drink factory can buy 10 tons of sugar for $200 per ton. If it buys 11 tons of sugar, it must pay $250 per ton. MFC for the eleventh ton of sugar is(A) $200(B) $250(C) $500(D) $550(E) $750
An auto-body shop has six employees, who each earn$30,000. If it hired a seventh employee, it would have to pay all of its employees $40,000 each. MFC for the seventh employee is(A) $10,000(B) $30,000(C) $40,000(D) $100,000(E) $280,000
A skateboard manufacturer is the only employer in a small town. It has 10 workers who each earn $40,000. It can hire another worker at a wage of $50,000 and produce skateboards worth $60,000.This would make its current workers demand a wage of $50,000 as well. If the firm hired another worker,(A)
MRP for a shaved ice stand’s first, second, and third workers is $95, $90, and $85 per day, respectively. The shaved ice stand hires workers until MRP = MFC. The government increases the minimum daily wage from $85 to $90. The shaved ice stand should(A) hire one more worker(B) lay off one
MRP for a hot dog stand’s fifth, sixth, and seventh workers is $140, $120, and $100, respectively. If the wage for a hot dog stand worker is $120, the hot dog stand should(A) employ four workers(B) employ five workers(C) employ six workers(D) employ seven workers(E) employ eight workers
Which example illustrates derived demand?(A) Consumers increase their purchases of corn tortillas, so the price of corn rises.(B) Technology makes wheat production more efficient, so the output of wheat flour increases.(C) Workers move from country A to country B in search of economic
Which of the following would NOT result in higher demand for car factory workers?(A) The cost of steel used in car manufacturing decreases.(B) Consumers purchase more cars.(C) Consumers begin taking the train to work instead of driving their cars.(D) Firms construct more car manufacturing
Marginal resource cost is equal to(A) marginal revenue multiplied by the cost of a unit of output(B) total cost for producing every unit of output(C) the cost of producing the next unit of output(D) the average cost of producing a unit of output(E) total revenue divided by the market price of a
A surfboard manufacturer adds a seventh worker. Total revenue increases from $900 to $1,000. Production increases from 18 to 20 surfboards. Marginal revenue for a surfboard is(A) $100(B) $50(C) $45(D) $55(E) $20
A taco truck sells tacos for $3 each. With four employees, its revenue is $450. If it hires a fifth employee, revenue will be $600.Marginal product for the fifth employee is(A) 200(B) 150(C) 100(D) 50(E) 30
A golf club manufacturer uses graphite to produce golf clubs. Consumers start demanding more golf clubs. Because of derived demand,(A) the price of graphite will increase(B) the price of graphite will decrease(C) the supply of graphite will increase(D) the supply of graphite will decrease(E) none
A hot dog stand has four workers. It pays wages of $400 per day and makes 100 hot dogs, which it sells for $5 each. With five workers, it would pay an additional $120 in wages and make 20 more hot dogs. The hot dog stand should not hire the fifth worker because(A) marginal product would be
A fishing boat has six crew members, who can catch 40 fish.The fish can be sold at the market for $4 each. If the boat hires a seventh crew member, the total catch will be 35 fish. Marginal revenue product for the seventh crew member is(A) $160(B) $140(C) $20(D) –$20(E) $0
An ice cream stand has eight employees. They can produce 20 ice cream cones, which sell for $2 each. If it hires a ninth employee, it can produce 24 ice cream cones. If it hires a tenth employee, it can produce 27 ice cream cones. Marginal revenue product for the tenth employee is(A) $40(B) $48(C)
An auto parts manufacturer has five workers who can produce 10 auto parts. These parts sell for $3 each. If it hires a sixth worker, it can produce 15 auto parts. Marginal revenue product for the sixth worker is(A) $45(B) $30(C) $5(D) $15(E) $50
Diners wish to eat food at a restaurant. Because of derived demand, the restaurant will(A) spend money on television ads(B) buy cooking ingredients(C) reduce prices because of a decline in rent costs(D) petition regulators to reduce its taxes(E) create a differentiated menu
All else equal, as the MFC of labor increases,(A) unemployment decreases(B) employment decreases(C) the supply of labor remains the same(D) demand remains the same(E) none of the above
The least-cost hiring rule refers to(A) firms that are wage setters(B) a business hiring workers to the point where MRP = MFC(C) the combination of labor and capital helping minimize total costs(D) measuring the cost a business must pay for using one more unit of a factor of production(E) the value
What will happen to labor demand if the price of a complementary resource rises?(A) Labor demand will decrease.(B) Labor demand will remain the same.(C) Labor demand will increase.(D) Labor demand will force the price of the product lower.(E) Labor demand will have no effect on price.
If the price of raw materials increases, what will happen to labor demand?(A) Labor demand will increase.(B) Labor demand will remain the same.(C) Labor demand will decrease.(D) Labor demand will drive prices lower.(E) Labor demand will have no effect on price.
Immigration has which of the following effects?(A) It will move the labor supply curve from their country of origin to the right. In the country to which they moved, the curve will shift to the left.(B) It will move the labor supply curve from their country of origin to the right. In the country to
If the wage of the last worker hired by a firm is greater than MRP of labor, the firm should(A) hire more workers(B) increase supply(C) decrease supply(D) lay off workers(E) do nothing
The marginal revenue product of labor refers to which of the following?(A) It measures the cost a business must pay for using one more unit of a factor of production.(B) It is the value that the next unit of labor brings to the firm.(C) The combination of labor and capital helps minimize total
An increase in MRP for labor will result in(A) a decrease in labor demand(B) an increase in labor demand(C) a shift of the labor supply curve to the left(D) no change in labor demand(E) none of the above
If the output effect is greater than the substitution effect, what will happen to the demand for labor?(A) It increases.(B) It decreases.(C) It increases and then gradually decreases.(D) It decreases and then gradually increases.(E) It remains the same.
All of the following will increase the demand for doctors EXCEPT(A) the government requires firms to pay for health care for their employees(B) all citizens are enrolled in a national health care program(C) a cure is found for the common cold(D) flu sweeps across the nation and sickens thousands(E)
Which of the following is an example of derived demand?(A) People desire food to eat, so farms invest in tractors and hire workers.(B) The wages of farmhands increase, so supply decreases and demand increases.(C) The wages of farmhands decrease, so supply increases and demand decreases.(D) People
New York offers free university education for state residents, while Nebraska increases tuition for state universities. As a result,(A) the MRP for labor will rise in New York and Nebraska(B) the MRP for labor will rise in New York and fall in Nebraska(C) the MRP for labor will fall in New York and
Wages fall in Arizona and rise in Nevada. As a result,(A) manufacturers will hire workers in Arizona and Nevada(B) manufacturers will lay off workers in Arizona and Nevada(C) manufacturers will hire workers in Arizona and lay off workers in Nevada(D) manufacturers will lay off workers in Arizona
Derived demand refers to which of the following?(A) Labor demand for a business is the MRP curve.(B) Demand for labor comes from the demand for the product produced.(C) The combination of labor and capital helps minimize total costs.(D) A business hires workers to the point where MRP = MFC.(E)
Seth finally realized his dream to open a 24-hour bagel café, which sells wheat bagels. Which of the following scenarios would increase Seth’s demand for labor?(A) The price of wheat increases.(B) Wheat farmers go on strike.(C) The price of wheat decreases.(D) A blight destroys thousands of
A truck manufacturer can produce one more truck if it hires another employee for $40,000. It can also produce one more truck if it buys $50,000 worth of machinery. A truck sells on the market for$60,000. The truck manufacturer should(A) hire employees until the cost of the next employee equals the
A smoothie shop uses bananas to make smoothies. The price of bananas increases. As a result,(A) MFC increases(B) profit increases(C) MP increases(D) labor demand increases(E) fixed cost increases
A cabinet manufacturer has seven employees. Each employee earns a wage of $25,000. To attract an eighth employee, it would have to offer a wage of $30,000 to the new employee and current employees would receive a raise to $30,000 as well. MFC for the eighth employee is(A) $175,000(B) $65,000(C)
MRP for a hot dog truck’s second, third, and fourth workers is $150, $140, and $130, respectively. The city requires the hot dog truck to pay for health benefits for its workers, increasing MFC for a worker from $130 to $150. The hot dog truck should(A) hire one more worker(B) lay off one

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5 Steps To A 5 500 AP Microeconomics Questions To Know By Test Day 3rd Edition Anaxos Inc, Brian Reddington - Solutions

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