Question

16-.	What is thinking on the margin?
	A)	Making decisions that are of noneconomic importance.
	B)	Making choices that are based on historical precedents.
	C)	Making choices that ignore the marginal benefits, but not the marginal costs, of some activity.
	D)	Making choices by comparing the additional benefits and additional costs from doing a little bit more of some activity.

17-.	The average tax on a professor's income of $100,000 is 18 percent, and the marginal tax rate above $100,000 is 45 percent. If the professor teaches during the summer and earns an additional $10,000 (bringing her total earnings for the year to $110,000), how much of the summer income does she keep after paying taxes?
	A)	$4,500
	B)	$1,800
	C)	$6,300
	D)	$5,500

18-.	What causes countries to become wealthier over time?
	A)	government central planning
	B)	economic growth
	C)	price controls on key natural resources
	D)	restrictions on imported goods
19-	eBay creates value by:
	A)	helping sellers trick buyers into purchasing broken items.
	B)	moving goods like broken laser pointers from people who don't want them to people who do.
	C)	helping people with the same preferences find each other.
	D)	moving toys from children who want them to children who don't.

20-	Only a very small portion of people who use microwaves know how they work. This is an example of:
	A)	a production possibility frontier.
	B)	division of knowledge.
	C)	absolute advantage.
	D)	opportunity cost.

Answer 1

16) D) making choices by compairing the additional benefits and additional costs from doing a littile bit more of some activity.

17)D) Professor's income is $100000.

Summer income is $10000.

Total income is $110,000 for a year.

Now professor fives 18% tax on the amount of $100000 and marginal tax rate of 45% on 10000 .

So, 45% of 10000 = $4500.

So he retain $5500 after paying tax.

18) B) Economic growth.

Economic growth is an increase in the capacity of an economy to produce goods and services, compared from one period of time to another.

19) c) helping people with the same preference find each other.

20) b) division of knowledge.