FINAL (multiple choice)

What is the opportunity cost of a small business investing $1 million in a new project that will pay back $1.5 million in one year? The firm's goal is to end the year with the most assets possible.
Its other alternatives are:
I. Leave $1 million in a bank account and earn $50,000 in interest.
II. Invest $1 million in new equipment that will have a value of $1 million at the end of the year and have earned an additional $100,000 in profits during the year
What is the opportunity cost of the new project?
A: $1,000,000
B: $1,050,000
C: $1,100,000
D: $1,150,000

If I have to drop out of college, the choice will cost me all of the tuition I have already paid and the income I could have earned during those years while I was in college.
A: True. These were opportunity costs of staying in college.
B: True. These are sunk costs. I cannot change the tuition paid and income lost. So they are not costs of dropping out.
C: False. I did not pay these costs.
D: False. I did pay these costs, but they are sunk and thus not relevant to the decision.

Which points represent a production level that could be economically efficient?
A: A and B
B: B and C
C: C and D
D: D and A

A pizza parlor can make 100 pizzas in an evening. They make 40 pepperoni pizzas and 60 extra cheese pizzas. 100 people order pizza, but 50 people would like a pepperoni pizza and 50 would like an extra cheese pizza. This pizza parlor is what?
A: Technically efficient, but not allocatively efficient nor economically efficient
B: Allocatively efficient, but not technically efficient nor economically efficient
C: Technically efficient, but not allocatively efficient, and therefore, economically efficient
D: Allocatively efficient, but not technically efficient, and therefore, economically efficient

The concept of scarcity is important in economics because:
A:it implies that people will never have enough stuff to be happy.
B: it implies that production is inefficient and producers should try harder.
C: it implies people must have a way to make choices between opportunities.
D: it implies that once people's needs are met they can stop working.

Assume that tastes change so that tennis is no longer as desirable to play as it is now. What would happen to the market for tennis balls?
A: Demand increases, the equilibrium quantity is larger, and the price is higher.
B: Demand decreases, the equilibrium quantity is smaller, and the price is lower.
C: Demand increases, the equilibrium quantity is smaller, and the price is lower.
D: Demand decreases, the equilibrium quantity is larger, and the price is higher.

Which of the following lists the three generalized inputs economists refer to as inputs?
A: Capital, labor and money
B: Capital, labor and land
C: Capital, new idea and money
D: Labor, Land and new idea

Since 1950, the labor force participation rate of women with young children has been increasing dramatically. In accordance with this trend, one would predict that there has been _______________.
A: An increase in the demand for child care services
B: An increase in the quantity demanded of child care services
C: A decrease in the demand for child care services
D: A decrease in the quantity demanded of child care services

All other things being the same, a new technology that lowers the cost of production of fidget spinners will cause the equilibrium price of fidget spinners to ______________ and the equilibrium quantity of fidget spinners to ______________.
A: Increase; increase
B: Increase; decrease
C: Decrease; decrease
D: Decrease; increase

Assume Chrome books are substitutes for laptop computers. An increase in the price of Chrome books will likely cause the equilibrium price of laptop computers to ______________ and the equilibrium quantity of laptop computers purchased to ______________ if all other factors remain constant.
A: Increase; increase
B: Increase; decrease
C: Decrease; decrease
D: Decrease; increase

Table 1 represents the choices faces by Duff Goldman. What is his opportunity cost of producing the 4th birthday cake?
A: 18 chocolate
B:6 chocolate soufflé's
C: 2 birthday cakes
D: 3 chocolate soufflé's

Which story below best describes Figure 1?
A: In the market for rap music, new of 21 Savage's detention by ICE agents sparks increased interest in his music
B: in the market for bananas, a new fungus kills 35% of the South American banana drop
C: In the market for ivory, former NBA star Yao Ming urges Chinese consumers to stop purchasing elephant tusks and rhinoceros horns
D: in the market for natural has, improvements in fracking techniques make natural has easier to extract

The concept of scarcity is important in economics because:
A: it implies more efficient production will solve the problem of scarcity
B: it implies that there is no point in trying to maximize happiness
C: it implies new political polls will solve the problem of scarcity
D: it implies everyone faces choices between the uses of their resources

Currently the firm pictured in Figure 2 is producing 6 cars and 80 scooters. Which of the following is true?
A: the opportunity cost of producing 2 additional cars is 10 scooters
B: the firm cannot increase its car or scooter production unless it changes its technology or gets more resources
C: the firm does not have to sacrifice scooters to make more cars because it is producing inside its production possibilities frontier
D: the opportunity cost of producing 20 additional scooters is 6 cars

Which of the following is not a question every economy must answer?
A: When to produce?
B: What to produce?
C:How to produce?
D: For whom to produce?

Economic reasoning is based on the promise that:
A: only non-economic decisions or actions have a cost associated with them
B: all decisions or actions have a cost associated with them
C: all decisions or actions are costless
D: only economic decisions or actions have a cost associated with them

Which of the following is likely to shift the supply of Lee jeans to the right?
A: the price of wrangler jeans decreases
B: men's health magazine suggests that Lee jeans are the top choice for mean not wanting to look outdated
C: the wage of garment workers decreases
D: the price of denim increases

Saturday the Kai Thai restaurant had its weekly Saturday Sushi special (reduced prices for sushi items). The crowd of people wanting seats overwhelmed the restaurant. Many people got mad and left. On Sunday, the Kai Thai restaurant posted apologies on Facebook. Which of the following best describes the problem in the market for Saturday sushi and suggests an appropriate way to fix it?
A: at the given price quantity supplied exceeded quantity demanded and price should fall
B: at the given price quantity demanded exceeded quantity supplied and price should fall
C: at the given price quantity demanded exceeded quantity supplied and price should rise.
D: at the given price quantity supplied exceeded quantity demanded and price should rise

Your friends offer to treat you to lunch for your birthday. Which of the following best represents your opportunity cost of going with your friends?
A: Not being able to go spend the time preparing for class while at lunch
B: the value of the food you eat while at lunch with your friends
C: the cost of the outfit you bought last spring for just such occasions
D: All of the above

Fish sticks and tartar sauce are complements. If the price of tartar sauce rises, we would expect:
A: the supply of fish sticks to shift left
B: the demand for fish sticks to shift down
C: the supply of fish sticks to shift right
D: the demand for fish sticks to shift up

Assume that as your income increases, your consumption of hot dogs decreases. We can assume that your income elasticity of demand for hot dogs is what?
A: Between 0 and 1
B: Greater than 1
C: Equal to 1
D: Negative

Suppose Gail is willing to pay $89 for a new pair of shoes and Karen is willing to pay $60. What is the gain in their combined consumer surplus if the price of the shoes falls from $70 to $50?
A: $10
B: $19
C: $29
D: $30

Assume you spend all of your income on two goods: peanuts and chips. Also assume that you are consuming the combination of peanuts and chips that maximize your utility. Which of the following statements is true?
A: If the price of peanuts is equal to the price of chips, then the marginal utilities must also be equal.
B: If the price of peanuts is more than the price of chips, then the marginal utility of peanuts is less than the marginal utility of chips.
C: If the price of peanuts is less than the price of chips, then the marginal utility of peanuts is more than the marginal utility of chips.
D: The marginal utilities of the two goods and their prices are not related.

The law of diminishing marginal returns is the cause of ______________ marginal product and ______________ marginal cost.
A: Increasing; increasing
B: Increasing; decreasing
C: Decreasing; decreasing
D: Decreasing; increasing

The production of 75 sofas per week requires 15 workers. The average product of each worker is ______________ sofas per week.
A: 5
B: 15
C: 75
D: 225

Use the table below. At what long-run output levels would it be best to choose firm size K = 2?
A: Any output level less than 500
B: Output levels between 200 and 400
C: Output levels between 300 and 500
D: Output levels between 300 and 400

Assume an additional waiter can increase the number of customers served in a restaurant by 100 customers per day. The waiter will cost the restaurant $50 per day. On the other hand, a new microwave oven will speed the cooking process and allow each customer to be served more quickly. The microwave oven will allow 200 more customers to be served with no additional labor. The microwave oven can be rented for $75 per day. Which of the following actions is the best option for the restaurant owner?
A: Hire another waiter, because the waiter is cheaper.
B: Rent a microwave oven because the expansion in output is greater than the increase resulting from a new waiter.
C: Hire another waiter, because the increase in output per dollar spent is greater than the increase per dollar spent from renting a microwave oven.
D: Rent a microwave oven , because the increase in output per dollar spent is greater than the increase in output per dollar spent from hiring another worker.

If population increases in a city with effective rent controls (and nothing else changes), which of the following describes what will happen in the market for rental housing?
A: An increase in the number of rental housing units available, but no change in rent.
B: An increase in quantity supplied and quantity demanded.
C: An increase in supply, but no change in quantity demanded.
D: An increase in demand, but no change in quantity supplied.

In the table below, what is the marginal product of the third worker?
A: 40 units
B: 50 units
C: 55 units
D: 60 units

A firm has a choice of raising or lowering its price. If the firm wishes to increase its revenues (the price times the quantity sold), what should it do?
A: Raise price when demand is elastic, because the quantity demanded will increase.
B: Lower price when demand is elastic, because the quantity demanded will decrease.
C: Raise price when demand is inelastic, because the revenues gained from the price increase will be larger than the revenues lost from the smaller quantity sold.
D: Lower price when demand is inelastic, because the revenues lost from the lower price will be smaller than the revenues gained from the increase in quantity sold.

Table 1 shows the (short run) marginal product of labor at the Savannah Candy Shop for the product of labor at the Savannah Candy Shop for the production of pralines. The company currently employs five workers. If labor costs $50 a day, what will happen to marginal cost if the Savannah Candy Shop hires a sixth worker?
A: it will rise
B: it will stay the same
C: it will fall
D: you need to know the price of pralines to be bale to tell

The Oregon Legislature recently imposed rent control across the state. If the rent control is effective, which of the following is most likely to happen?
A: the market for apartments will disappear as suppliers and consumers leave the market for other opportunities
B: there will be excess quantity supplied as suppliers will want to supply more apartments at the rent control price than consumers will want to rent
C: there will be a shortage as consumer will want more apartments as the rent-controlled floor price than renters are willing to provide
D: the market for apartments will find an equilibrium where the quantity supplied of apartments will equal the quantity demanded at the rent-controlled price

Marvin comsumes two things with all his budget: video games and math textbooks. Currently, Marvin is maximizing his utility. Which of the following statements is most likely to be true?
A: of the price of math textbooks were to rise, Marvin would likely purchase fewer math textbooks, but it is unclear what would happen to the number of video games he purchases
B: if the price of video games were to rise, Marvin would likely purchase more video games and fewer math textbooks
C: if the price of math is higher than the price of video games, Marvin must be consuming more video games than math textbooks
D: if the marginal utility of math textbooks is higher than the marginal utility of video games, Marvin must be consuming more math textbooks than video games

Table 2 below presents the total and marginal utility that Krista receives when she buys scented candles. The marginal utility of the 4th scented candle is:
A: 135 utils
B: 820 utils
C: 140 utils
D: 80 utils

In the short run, to produce 105 refrigerators in a week you need to hire 7 workers. The weekly average product of labor is:
A: 98 refrigerators
B: 15 refrigerators
C: 105 refrigerators
D: 18 refrigerators

Table 3 below presents four different combinations of labor and capital that a producer of cotton linens could utilize to produce the same amount of cotton linens. If the wage rate is $100 per week and the rental rate of capital is $50 per week, which of the combinations is economically efficient?
A: labor- 40, capital- 90
B: labor- 60, capital- 40
C: labor- 60, capital- 50
D: labor- 80, capital- 15

The price elasticity of demand for spaghetti is l-0.9l. If the price of spaghetti decreases by 10%, the amount of spaghetti purchased (all other things being equal) will likely:
A: decrease by 0.9%
B: increase by 0.09%
C: increase by 9.0%
D: decrease by 9.0%

The cross-price elasticity of demand for sandals when compared to flip flops is 0.85. When the price of sandals rises you would expect the demand for flip flops to ______ because they are ______.
A: increase, complements
B: decrease, complements
C: decrease, substitutes
D: increase, substitutes

The income elasticity of Starbucks Blonde Espressos is 0.87. If income in Hiram, GA decreases by 10% the Starbucks in Hiram would expect sales of its Blonde Espresso to:
A: decrease by more than 10% because blonde espresso are frivolous goods
B: increase by less than 10% because BE are inferior goods
C: decrease by less than 10% because BE are normal goods
D: increase by more than 10% because BE are luxury goods

Table 4 shows the long-run average cost of producing Fire house Work Pants at Duluth Trading Company. At what levels of production does the factory experience increasing returns to scale?
A: from 3,000 pairs of pants to 4,000 pairs of pants
B: at all levels of production
C: at levels above 4,000 pairs of pants
D: at levels of output less than 3,000 pairs of pants

Assume the price of coffee increases. If the market for tea is perfectly competitive and a constant-cost industry, what will happen to the tea market in the long run? Market output will ______________; the market price will ______________; and economic profits will ______________Indicate whether increase, decrease, cannot tell, or no change as before the price shift is correct for each blank space.
A: Increase; not change; return to zero
B: Decrease; increase; increase
C: Increase; not change; decrease
D: Decrease; decrease; return to zero

Assume a constant-cost industry in a competitive market. In the short run, an increase in demand for the good will ______________ the equilibrium market price and ______________ the equilibrium market quantity in the goods' market. In the long run, the equilibrium market price will ______________ and the equilibrium market quantity will ______________ in the goods' market.
A: Increase; increase; return to its original level; rise even higher
B: Increase; decrease; return to its original level; return to its original level
C: Decrease; not change; fall further; increase
D: Increase; increase; fall below its original level; return to its original level

Imagine two profit-maximizing firms with identical cost structures (but different products) and constant returns to scale. One is competing in a perfectly competitive market and the other is a monopoly. The market demands for the two industries look identical. In the long run which of the following is most likely to be true?
A: The monopoly and the perfectly competitive firm will produce the same quantity.
B: The monopoly and the perfectly competitive firm will charge the same price.
C: The monopoly will charge a higher price than the perfectly competitive firm.
D: The monopoly will sell a higher quantity than the perfectly competitive firm.

An increase in fixed costs for a monopoly will do which of the following?
A: Increase the price
B: Decrease the economic profits
C: Lower the level of output
D: Lower marginal revenue

At the Fisherman's Wharf in San Francisco, there are a lot of seafood vendors. While all of the vendors may be unique in their own way, there are no real barriers to entry. Suppose that there are twenty vendors selling steamed crab. If Tommy's Crab Shack sells 100 steamed crabs per day for $5 each, how much economic profit do you expect Tommy to earn (per day) in the long run?
A: $500 per day
B: $100 per day
C: $0 per day
D: Tommy will be losing money each day.

Tony's Gas Station and Roberta's Gas Station are the only two gas stations in the small town of Haddock, GA. If Tony and Roberta collude, which of the following strategies would allow them to earn more profits than if they competed?
A: Each limit the amount of gasoline available and raise prices
B: Each limit the amount of gasoline available and lower prices
C: Each increase the amount of gasoline available and raise prices
D: Each increase the amount of gasoline available and lower prices

In a perfectly competitive industry, the short-run industry supply curve is _________ and the long-run industry supply curve is _________ .
A: Upward sloping, downward sloping
B: Downward sloping, upward sloping
C: Horizontal, upward sloping
D: Upward sloping, horizontal

For the monopolist depicted in the table below, the economic profit at the profit maximizing level of output is:
A: $0.00
B: $10,000
C: $16,000
D: $2,000

Nike Sportwear and Under Armor are engaged in an advertising war. The game depicted below represents the possible outcomes (in millions of dollars) of different advertising strategies. Each company can choose to either engage in an extensive advertising campaign (Advertise) or to not advertise (Don't Advertise). Both companies must choose their strategy simultaneously. Which of the following strategies lead to Nash equilibrium?
A: A: Advertise, B: Advertise
B: A: Don't Advertise, B: Advertise
C: A: Advertise, B: Don't Advertise
D: A: Don't Advertise, B: Don't Advertise

From the perspective of a regulator, predatory pricing is:
A: Easy to distinguish from the behavior of businesses that are competing fiercely to produce at the lowest possible price.
B: A guaranteed way for a business to become more profitable in the long run.
C: Hard to distinguish from the behavior of businesses that are competing fiercely to produce at the lowest possible price.
D: A guaranteed way for consumers to enjoy the lowest possible prices in the long run.

The Debeers Company is a profit-maximizing monopolist that exercises monopoly power in the distribution of diamonds. If the company earned positive economic profits last year, then the market price of diamonds:
A: exceeds the marginal cost of extracting and preparing diamonds but was equal to the average cost of extracting and preparing diamonds
B: was equal to the marginal cost of extracting and preparing diamonds
C: exceeds both the marginal cost and the average cost of extracting and preparing diamonds
D: was equal to the average cost of extracting and preparing diamonds

Refer to Table 1: If the market price is currently $3.75 per unit and the profit maximizing form is in a perfectly competitive market, the manager should produce ____ units of the good and will make a profit of _____.
A: 400, $400
B: 500, $800
C: 600, $1,300
D: 800, $2,600

The firm depicted in Table 1: is currently in the ______ run and should expect firms to ______ and the market price to _______.
A: long, stay where they are, not change
B: long, enter, fall
C: short, enter, fall
D: short, exit, rise

A firm in a monopolistically competitive market:
A: can earn short-run profits and long-runs profits
B: cannot earn short-run profits or long-run profits
C: can earn short-run profits but not long-run profits
D: cannot earn short-run profits but can earn long-run profits

If a monopolist increases daily sales form 100 to 103 by lowering its price from $75 to $72, her marginal revenue for the 103rd unit is:
A: $ -3
B: $ -1
C: $ -84
D: $-28

The playoff matriculates depicted in Figure 1 represents the possible outcomes (in millions of dollars) of difference one-time advertising strategies of Fanta Soda and Jones Cola. Each company can choose to either engage in an extensive advertising campaign or to not advertise. Both companies must choose their strategy simultaneously. What strategies result in a Nash equilibrium?
A: Fanta (A): Not advertise; Jones (B): advertise
B: Fanta (A): not advertise; Jones (B): not advertise
C: Fanta (A): advertise; Jones (B): advertise
D: Fanta (A): advertise; Jones (B): not advertise

Which of the following is the best reason why a perfect monopolies will not willingly price on the inelastic portion of a (linear) market demand curve?
A: regulators will not allow it to price on the inelastic portion of the demand curve
B: marginal revenue will be negative and not maximize profits
C: the price will be too high and will drive away customers
D: its average costs will be too low and might attract competition

Which of the following best describes the tradeoff society faces when deciding how long patent should last?
A: patents ensure competitive markets but also create monopoly power
B: patents create an incentive to innovate but also create monopoly power
C: patents create a variety of products but also strengthen cartels
D: patents guarantee profits but also discourage new products

Which of the following is the most likely example of price discrimination?
A: Restaurants charge different prices for chicken dishes and beef dishes
B: a hotel chain charges lower prices to patrons with an AARP card
C: airlines charge higher prices to passenger who prefer to fly first class
D: supermarkets charge different prices for orange and apples

According to Figure 2, what appears to be the monopoly's profit-maximizing quantity and price?
A: quantity = 50, price = $300
B: quantity = 75, price = $100
C: quantity = 100, price = $200
D: quantity = 75, price = $250

Consider a good produced in a competitive market that has external costs. Left alone, the market will produce too ______________ of the good and the price will be ______________ than the price that would result in allocative efficiency.
A: little; lower
B: little; higher
C: much; lower
D: much; higher

The earth's environment is an example of an open access or common resource because:
A: The actions of any single individual are too inconsequential to meaningfully affect the quality of the environment.
B: It has a cost of use (or abuse) in the form of pollution, but the benefits of using it far outweigh the costs.
C: It is provided for all to use (or abuse) without a cost, and each person can use it without affecting other's use of it.
D: It is provided for all to use without a cost, but one person's use (or abuse) of it affects the ability of others to use it.

Suppose the government chooses to provide a public bridge to its citizens at a zero price per use. During rush hour the bridge gets congested. What could the government do to encourage allocative efficiency in the use of the bridge?
A: Demolish the bridge. Crowding is inefficient and would not occur if there were no bridge.
B: Charge a fee during rush hour that represents the cost of crowding.
C: Build more bridges until there is not more crowding.
D: Close the bridge during rush hour when crowding is a problem.

Which of the following best represents a progressive tax?
A: A tax that increases the percentage of income taxed as income rises.
B: A tax that decreases the percentage of income taxed as income rises.
C: A tax that does not change the percentage of income taxed as income rises, but increase the absolute amount of the tax as income rises.
D: A tax that keeps the percentage of income taxed constant no matter what the level of income is.

The equilibrium price consumers pay for the product without the $1.50 excise tax is ______________. The equilibrium price consumers pay with the $1.50 excise tax is ______________. The change in equilibrium price due to the $1.50 excise tax is ______________.
A: $3.50, $4.50, +$1.00
B: $4.50, $3.50, -$1.00
C: $3.50, $5.00, +$1.50
D: $5.00, $3.50, -$1.50

Economists have estimated the elasticity of demand for the following (fairly) common goods. Assume the elasticity of supply is perfectly elastic for each good:
If the same excise tax were imposed on the sale of each item, which market would experience the smallest dead weight loss per dollar of tax revenue raised?
A: Movies
B: Fresh green peas
C: Fish (cod served at home)
D: Salt

The table below describes the production possibilities of China and Italy. If both countries wanted to take advantage of the opportunities available with trade we might expect:
A: China to produce all of the gun powder and fine art.
B: China to specialize in the production of gun powder and Italy to specialize in the production of fine art.
C: China to specialize in the production of fine art and Italy to specialize in the production of gun powder.
D: Neither country to engage in trade.

The table below presents the demand and supply curves for microcomputers in Japan and the U.S.
If there is no trade between the U.S. and Japan, what is the equilibrium price in the computer market in the U.S.?If there is free trade between the U.S. and Japan, what is the equilibrium price in the computer market in the U.S.?
A: $3; $3
B: $5; $5
C: $4; $2
D: $5; $3

Assume the U.S. imports bananas from abroad at a market price of $0.25 per banana, and a tariff of $0.10 is placed on imported bananas. If the global supply of bananas is upward sloping and the global demand for bananas is downward sloping, the effect of the U.S. tariff on the price of bananas will be:
A: an increase in the price in the U.S. as well as the price received by foreign exporters.
B: an increase in the price in the U.S. but a decrease in price received by foreign exporters.
C: a decrease in the price in the U.S. as well as the price received by foreign exporters.
D: an decrease in the price in the U.S. but an increase in the price received by foreign exporters.

Imagine a community that can produce rainbows. People enjoy rainbows without diminishing other people's enjoyment, and it is impossible to prevent people from enjoying rainbows once they are produced. If the community decided to let private competitive markets produce rainbows it should expect:
A: the number of rainbows produced may be positive but will be less than the allocatively efficient number.
B: the number of rainbows produced may be positive and will be more than the allocatively efficient number.
C: the number of rainbows produced will be positive and equal to the allocatively efficient number.
D: the number of rainbows produced will certainly be zero.

In a market that has a negative external costs associated with it (a cost with no market price of its own), the market price will be ___ than its allocatively efficient and the market quantity will be ___than is allocatively efficient
A: higher; higher
B: higher; lower
C: lower; higher
D: lower; lower

In fig. 1 a $30 per unit excise tax is placed on a good. once the market adjusts to the tax the consumer will pay ___ of the tax and the producer will pay ___ of the tax
A: $15; $15
B: $30; $0
C: $10; $20
D: $20;$10

Given the info from table 1, the opportunity cost of producing cakes:
A: is the same for both bakeries
B: cannot be determined with the information given
C: is higher at pie in the sky bakery
D: is higher at ben in the over bakery

Given the production possibilities in table 1, we can determine that:
A: pie in the sky bakery has a comparative advantage in producing cookies
B: bun in the over bakery has a comparative advantage in producing both goods
C: pie in the sky bakery has a comparative advantage in producing both goods
D: bun in the over bakery has a comparative advantage in producing cookies

Which of the following goods best demonstrates both characteristics of a public good?
A: a tuna in the ocean
B: a football game in a stadium
C: an interstate highway from utah to nebraska.
D: a ham and Swiss cheese sandwich on rye bread

Which of the following is most likely to increase the real wages of pig farmers?
A: an increase in inflation
B: an increase in the productivity of pig farmers
C: a decrease in the demand for pork
D: an increase in the number of pig farmers

Refer to table 2, if the same excise tax were places on each of the items, which item would be the LEAST efficient (in terms of deadweight loss per dollar)
A: a tax on coffee
B: a tax on fresh tomatoes
C: a tax on oysters
D: a tax on toothpicks

If a country places a tariff on an imported good, the tariff is likely to help ___ but hurt ___.
A: domestic producer; domestic consumer
B: domestic producer; foreign consumers
C: foreign producers; domestic consumers
D: foreign producers; foreign consumers

A tax that has a higher marginal rates as income rises is called a:
A: progressive tax
B: regressive tax
C: proportional tax
D: sales tax

Will private markets ever provide goods that have public-good characteristics?
A: No, it is unlikely they will
B: yes, and they will likely produce the allocatively efficient amount
C: yes, but they will like produce to much be allocatively efficient
D: yes, but they will likely produce too little to be allotcatively efficient

If a $1.00 tax unit is placed a good, then the new equilibrium quantity: