1. According to the textbook, which of the following statements is (are) correct? (x) Efficiency means that society is getting the most it can from its scarce resources. (y) Equality means that the benefits of society's resources are distributed uniformly among society's members. (z) Suppose that Senator Jefferson argues that replacing the income tax with a national sales tax would increase the level of output and Senator Thomas objects that this policy would benefit the rich at the expense of the poor. Consequently, Senator Jefferson’s argument is primarily about equality, while Senator Thomas’s argument is primarily about efficiency. A. (x), (y) and (z) B. (x) and (y) only C. (x) and (z) only D. (y) and (z) only E. (y) only
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1. According to the textbook, which of the following statements is (are) correct?
(x) Efficiency means that society is getting the most it can from its scarce resources.
(y) Equality means that the benefits of society's resources are distributed uniformly among society's members.
(z) Suppose that Senator Jefferson argues that replacing the income tax with a national sales tax would increase the level of output and Senator Thomas objects that this policy would benefit the rich at the expense of the poor. Consequently, Senator Jefferson’s argument is primarily about equality, while Senator Thomas’s argument is primarily about efficiency.
A. (x), (y) and (z)
B. (x) and (y) only
C. (x) and (z) only
D. (y) and (z) only
E. (y) only
3. Which of the following statements is (are) correct?
(x) College students often choose to attend college even though it reduces the present level of income because they believe that future income and job satisfaction will be greater if they successfully earn a higher degree of education.
(y) In general, the
(z) If wages for high school graduates rise, but college tuition does not change, then the opportunity cost of attending college decreases.
A. (x), (y) and (z)
B. (x) and (y) only
C. (x) and (z) only
D. (y) and (z) only
E. (x) only
5. A rational decision maker takes an action only if
A. the average cost is greater than the marginal cost.
B. the marginal benefit is less than the marginal cost.
C. the marginal benefit is greater than the marginal cost.
D. the marginal benefit is greater than both the average cost and the marginal cost.
E. the average benefit is greater than the average cost.
6.Henryhasspent$6,450purchasingandrepairinganoldcarthatheexpectstosellfor$8,900oncethe repairs are complete. Assume that his prediction is very accurate and he will be able to sell it for that price, no higher and no lower than $8,900. However, he discovers that he needs additional parts, which will cost $2,850, including labor, in order to complete the additional repairs. As a consequence, he can sell the car as it is now for only $5,800. What should Henry do?
A. Henry should complete the repairs and sell the car for $8,900.
B. Henry should cut his losses and take the $5,800.
C. Henry should do neither. He will make a loss either way.
D. It doesn't matter which action Henry takes, they are equivalent.
E. This question is ridiculous because Henry should have never purchased the old car since he should know that repairing cars will always cause a loss.
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