c.
when air pollution levels are above near-zero levels
d.
when the marginal benefit from air pollution reduction outweighs the marginal cost of achieving the reduction
ANSWER:
d
211. Which statement best represents an economist’s view of criminal behaviour?
a.
Economics can shed very little light on the subject.
b.
Those choosing to commit criminal acts weigh the expected marginal benefits versus the expected marginal costs.
c.
Individuals are irrational and don't respond to incentives.
d.
People engage in criminal activity because they are genetically predisposed to do so.
ANSWER:
b
212. Which statement is most consistent with the rule of rational choice?
a.
Manufacturers of automobiles should seek to make cars safer, no matter the costs involved.
b.
Police forces should be enlarged until virtually all crime is eliminated.
c.
Environment Canada should strive to eliminate virtually all air and water pollution.
d.
When evaluating new prescription drugs, Health Canada should weigh each drug's potential health benefits against the potential health risks posed by known side effects.
ANSWER:
d
213. Katniss and Gilly are deciding on whether to sell their current house to purchase a bigger house. Which of the following should they consider in order to make the correct decision?
a.
only the total benefits that they will enjoy from the bigger house
b.
the additional benefits and the additional costs of the bigger house
c.
the cost of the bigger house with the cost of their current house
d.
the additional benefit from the bigger house to the net cost of the bigger house
ANSWER:
a
214. Several political leaders have proposed that parents be granted a substantially larger reduction in their annual personal income taxes for each child that they parent. According to economic thinking, what would be the result of this type of legislation?
a.
It would exert no impact on either the cost of raising children or the birth rate since parenting children is a noneconomic activity.
b.
It would reduce the after-tax cost of raising children and therefore increase the birth rate.
c.
It would make it more expensive for parents to provide for their children.
d.
It would reduce the value of children to their parents and therefore lead to a reduction in the birth rate.
ANSWER:
b
215. Economists believe that people respond to incentives in predictable ways. Therefore, if the government imposed a tax on each child born, what would an economist expect to happen?
a.
Families would have the same number of children but spaced farther apart.
b.
Families would have the same number of children but wait longer to begin having them.
c.
Fewer children would be born.
d.
More children would be born but spaced farther apart.
ANSWER:
c
216. Which of the following statements about positive incentives is the most accurate?
a.
They create additional taxes on behaviours.
b.
They increase benefits and increase costs
c.
They increase benefits or reduce costs.
d.
They decrease benefits or increase costs.
ANSWER:
c
217. Which statement about negative incentives is the most accurate?
a.
They increase benefits or reduce costs.
b.
They increase benefits and increase costs
c.
They decrease benefits or increase costs.
d.
They include both cash subsidies and taxes.
ANSWER:
c
218. Which of the following is an example of a positive incentive?
a.
You expect to receive a scholarship if your grades remain high.