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Figure 18-2 ____ 31. Figure 18-2 shows the widget market before and after an exc

ID: 1213678 • Letter: F

Question

Figure 18-2

____   31.   Figure 18-2 shows the widget market before and after an excise tax is imposed. The tax per widget equals ____.

a.

$5

b.

$20

c.

$25

d.

$30

____   32.   Figure 18-2 shows the widget market before and after an excise tax is imposed. After the tax is imposed, the amount that a firm keeps for itself from the sale of each widget is ____.

a.

$95

b.

$100

c.

$120

d.

$125

____   33.   Figure 18-2 shows the widget market before and after an excise tax is imposed. The revenue collected by the tax is ____.

a.

$8,000

b.

$50,000

c.

$100,000

d.

$150,000

____   34.   Figure 18-2 shows the widget market before and after an excise tax is imposed. What percentage of the tax per widget is borne by consumers, considering the true economic incidence of the tax?

a.

0 percent

b.

20 percent

c.

50 percent

d.

80 percent

____   35.   Which factor of production receives the greatest share of the U.S. national income?

a.

land

b.

labor

c.

capital

d.

entrepreneurship

____   36.   The marginal productivity principle says that a profit-maximizing firm should

a.

hire capital until its marginal product is zero.

b.

hire labor until another worker costs more to hire than he can earn for the firm.

c.

hire the quantities of capital and of labor at which their marginal products are equal.

d.

hire capital until its marginal product is negative.

____   37.   Mr. Calhoun owned a worn-out piece of farmland for growing cotton, which he had been unable to rent for years. Suddenly he was getting offers from cotton farmers to lease his land. What is the most likely explanation of this?

a.

The price of cotton went down.

b.

The physical productivity of the land went up.

c.

Taxes on land went up.

d.

The price of cotton went up.

____   38.   Capital is the

a.

flow of new equipment that a firm acquires over the course of a year.

b.

amount of increase in a firm's equipment over a year.

c.

amount of money that a firm has on hand at a given time.

d.

stock of plant, equipment, and other productive resources held by a firm.

____   39.   The interest rate is determined by

a.

the supply and demand of loanable funds.

b.

the supply and demand of land.

c.

the supply and demand of marginal land.

d.

None of the above is correct.

____   40.   A $1,000 to be received at a future date

a.

is worth less than a $1,000 received today.

b.

is worth more than a $1,000 received today.

c.

has the same value as $1,000 received today.

d.

is worth less than $1,000 received yesterday.

a.

$5

b.

$20

c.

$25

d.

$30

Explanation / Answer

35)Labor
36)b.
hire labor until another worker costs more to hire than he can earn for the firm.
37)The price of cotton went up
38)stock of plant, equipment, and other productive resources held by a firm.
39)the demand and supply of loanable funds
40)is worth less than $1000 today

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