Q 1: From the point of view of economics, discrimination Select one: a. results

Question

Q 1: From the point of view of economics, discrimination

Select one:

a. results in an actual GDP that is below potential GDP.

b. results in an actual GDP that is no different from potential GDP provided resources are fully employed.

c. no longer exists in the U.S. economy.

d. provides incentives for minority groups to work harder at their jobs.

e. none of the choices.

Question 2

Price floors are often instituted for which of the following purposes?

Select one:

a. To prevent inflation

b. To make goods and services accessible to all income levels

c. To increase the income of sellers

d. To increase the wages of workers

e. all of the choices

Question 3

Q Suppose the government implements a negative income tax plan to deal with the poverty problem. The negative income tax rate is set at 50%, and the break-even level of income is set at $5,000. If a family earns $2,000 income, their negative income tax subsidy will be

Select one:

a. $0.

b. $1,500.

c. $2,500.

d. $5,000.

e. $7,500.

Q 4: Private goods and services

Select one:

a. do not meet the rivalry condition.

b. are only provided by governments.

c. are freely available to all members of society.

d. do not suffer from the free-rider problem.

e. do not meet the exclusivity condition.

Question 5

If population in a country falls while GDP stays the same, the country's

Select one:

a. per capita GDP falls.

b. real GDP rises.

c. per capita GDP rises.

d. welfare falls.

e. real GDP falls.

Explanation / Answer

Q 1

Right answer is : (D)

Economic discrimination exists in market based economic system. It offers great incentives to minority group to work harder at their jobs.

Question 2

right answer is : (C)

price floor does not allow price to fall below the certain level. In this way, it protects the interest of sellers.

Question 3.

Right answer is : (B)

Shortfall of income is $ 3000 and government will offer 50 % subsidy which would be $ 1500 ( .5*3000)

Q 4

Right answer is : (d)

Private goods are available to individuals who are ready to pay for it. Hence does not suffer from free rider problem.

Question 5

right answer is : (C)

Fall in population raises availability of larger goods and services are people. Thus per capita GDP rises.

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