Eco FINAL practice test

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xryan27x
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188773
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Eco FINAL practice test
Updated:
2012-12-12 20:53:15
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Microeconomics
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  1. The amount of income tax owed by a family is:

    More than the family’s total income

    Equal to the family’s total income

    Not simply proportionate to the family’s total income
    Not simply proportionate to the family’s total income
  2. In 2009, which category represented the largest category of spending for the U.S. federal government

    Medicare
    Social Security
    National Defense
    Net Interest
    Social Security
  3. Which of the following is not correct
    A gas tax can be an example of a tax that uses the benefits principle.
    A progressive tax attempts to achieve vertical equity.
    Progressive tax can be an example of the ability-to-pay principle.
    A regressive tax attempts to achieve vertical equity.
    A regressive tax attempts to achieve vertical equity.
  4. The deadweight loss of an income tax is determined by the
    Marginal tax rate
  5. A lump sum tax

    Is most frequently used to tax real property
    Does not distort incentives
    Distorts incentives more than any other tax
    Is the most fair tax
    Does not distort incentives
  6. With a lump-sum tax, the

    Marginal tax rate falls as income rises
    Marginal tax rate rises as income rises
    Marginal tax rate falls as income falls
    Marginal tax rate rises as income falls
    Marginal tax rate falls as income rises
  7. Under a progressive tax system, the marginal tax rate could be equal to the average tax rate only when a taxpayer
    Has very low income
  8. Fixed cost divided by quantity produced is
    Average fixed cost
  9. Economies of scale occur when

    Short-run average total costs fall at a constant rate
    Short-run average total costs rise at a constant rate
    Long-run average total costs fall at a constant rate
    Long-run average total costs rise at a constant rate
    Long-run average total costs fall at a constant rate
  10. The production function exhibits diminishing marginal product when

    The marginal product of an input declines as the quantity of that input rises
    The marginal product of an input declines as the quantity of that input falls
    The marginal product of an input rises as the quantity of that input rises
    The marginal product of an input rises as the quantity of that input falls
    The marginal product of an input declines as the quantity of that input increases
  11. In a competitive market
    No single seller or buy can affect the price of the product
  12. Which of the following best expresses a firm’s profit-maximizing decision?
    If a marginal revenue is greater than marginal cost, the firm should increase its output
  13. If a firm operating in a competitive industry shuts down in the short run, it can avoid paying
    Variable costs
  14. Suppose that in a competitive market the equilibrium price is $3.  What is marginal revenue for the last unit sold by a typical firm in this market?
    Exactly $3
  15. Which of the following is not a characteristic of a monopoly?

    Barriers to entry
    One seller
    One buyer
    One buyer
  16. Patent and copy right laws are major sources of
    Government created monopolies
  17. The deadweight loss occurs because the monopolist
    Produces an output level less than the socially optimal level

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