Microecon Midterm 3 Practice

What is a public good?

• excludable and rival

• excludable and non-rival

• non-excludable and non-rival

• non-excludable and rival

What is a common resource?

• excludable and rival

• excludable and non-rival

• non-excludable and non-rival

• non-excludable and rival

What is a club good?

• excludable and rival

• excludable and non-rival

• non-excludable and non-rival

• non-excludable and rival

What is a private good?

• excludable and rival

• excludable and non-rival

• non-excludable and non-rival

• non-excludable and rival

What is a marginal tax rate?

• total taxes paid divided by income

• the tax rate applied to the first dollar earned

• the average of all tax brackets

• the rate applied to the last dollar of income earned

Which of the following is an example of diminishing marginal product?

• total output decreases with each new worker

• each additional worker contributes more than the last

• each additional worker contributes less than the last

• output remains constant as more workers are added

What does it mean for a firm to be a price taker?

• it sets prices to maximize profits

• it negotiates prices with suppliers

• it must accept the market price for its product

• it can influence market price due to its size

A regressive tax system means:

• Everyone pays the same amount in dollars

• Higher-income earners pay a higher % of income

• Lower-income earners pay a higher % of income

• Taxes are based on spending instead of income

In a progressive tax system, which is true?

• Everyone pays the same flat rate

• The marginal tax rate decreases as income increases

• High-income earners pay a larger % of their income

• Low-income earners are exempt from all taxes

Which type of tax is sales tax considered?

• progressive

• proportional

• regressive

• variable