ECON MC

1.A tradeoff exists between a clean environment and a higher level of income in that

a.studies show that individuals with higher levels of income actually pollute less than low-income individuals.

b.efforts to reduce pollution typically are not completely successful.

c.laws that reduce pollution raise costs of production and reduce incomes.

d.by employing individuals to clean up pollution, employment and income both rise.

2.When government policies are enacted,

a.equity can usually be enhanced without an efficiency loss, but efficiency can never be enhanced without an equity loss.

b.efficiency can usually be enhanced without an equity loss, but equity can never be enhanced without an efficiency loss.

c.it is always the case that either efficiency and fairness are both enhanced, or efficiency and equity are both diminished.

d.None of the above are correct

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3.In a circular-flow diagram,

a.taxes flow from households to firms, and transfer payments flow from firms to households.

b.income payments flow from firms to households, and sales revenue flows from households to firms.

c.resources flow from firms to households, and goods and services flow from households to firms.

d.inputs and outputs flow in the same direction as the flow of dollars, from firms to households.

4.Which of the following transactions does not take place in a market for a factor of production?

a.Karl provides plumbing services for a plumbing company and receives an hourly wage from the company for his services.

b.Juanita works as a marriage counselor and her clients pay her on a per-hour basis for her services.

c.Trish owns several shopping malls and receives rent payments from the companies that operate those malls.

d.Ben sells advertising for a newspaper and receives a commission from the newspaper company for each advertisement that he sells.