A tax on the purchase of a particular good, such as liquor, cigarettes, or electricity, or a broad class of goods, such as food, is called
Question 1A tax on the purchase of a particular good, such as liquor, cigarettes, or electricity, or a broad class of goods, such as food, is called __________.
an excise tax
a luxury tax
a property tax
an income tax
Question 2Using Table 4.1, the demand curve schedule for a straight-line demand curve, what is the percentage change in quantity demanded from 10 units to 25 units?
Table 4.1: Demand curve schedule for straight-line demand curve in Figure 4.5
Price Quantity demanded
$0.50 25
1.00 20
1.20 18
1.40 16
1.60 14
1.80 12
2.00 10
2.20 8
2.40 6
2.60 4
2.80 2
3.00 0
250%
25%
15%
150%
Question 3Any movement along a demand curve occurs in response to a change in price and is referred to as a change in __________.
quantity demanded
quantity needed
supply demanded
supply needed
Question 4Westhill is a town where people typically buy more ground beef than steak. One month, Westhill’s EatWell grocery store raised its price on ground beef. Consequently, the substitution effect dictates that more consumers will switch __________.
from steak to ground beef
to a ground beef substitute
to another grocery store
from ground beef to steak
Question 5If the government were to provide free health care, people would most likely consume this service until the marginal utility of the last unit was __________.
= 1
d. > 1
= 0
a. < 1
Question 6When the fourth cup of coffee is expected to provide less additional pleasure than the third cup of coffee, this is called the principle of __________.
diminishing returns
diminishing marginal utility
total utility
long-acting utility
Question 7What are the two characteristics of public goods?
nonexclusivity and nonrivalry
exclusivity and nonrivalry
productivity and rivalry
exclusivity and rivalry
Question 8Free riding is a market concern because free riders __________.
do not pay federal taxes
make it difficult for the market to measure actual demand
might consume all of a public good
make it difficult for others to enjoy a public good
Question 9What is the most frequently cited example of an externality?
service charges
public protest
sales taxes
pollution
Question 10What happened when—regardless of the market demand—the United Kingdom made laws to ban smoking in enclosed workplaces?
Respiratory illness declined sharply among workers.
Restaurant and pub owners sued the UK’s Parliament.
Restaurant and pub owners generally disregarded the law.
Respiratory illness was monitored for the first time.
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