A) they believe that Wichita does not need a new convention center.
B) there are other projects that could be undertaken with the tax funds.
C) the convention center may not pass a marginal cost-benefit test.
D) the hotel tax may lead to a decline in visits to Wichita.
E) the hotel tax may reduce commercial property values in the area.
Answer: B
Topic: Integrative
Skill: Level 5: Critical thinking
Section: Integrative
Status: Old
AACSB: Reflective thinking
14) Suppose that your public library charges a fixed monthly membership fee of $12. Members are allowed to check out as many books as they want under this plan. The average member checks out 4 books per month. Suppose that your public library changes its policy. Now each book costs $3 to check out but there is no longer a monthly membership fee. What effect do you think the new policy will have on the total number of books checked out from your library each month? The new policy is likely to ________ the number of booked checked out because ________.
A) leave unchanged; members have already shown that they are willing to pay $12 to check out 4 books per month
B) leave unchanged; the average cost of the library service is the same under both plans
C) reduce; the marginal benefit of checking out books is now lower under the new policy
D) reduce; the marginal cost of checking out books is now higher under the new policy
E) increase; the average benefit of checking out more than 4 books is now higher under the new policy
Answer: A
Topic: Integrative
Skill: Level 5: Critical thinking
Section: Integrative
Status: Old
AACSB: Application of knowledge
15) In New York City, when he was the mayor Michael Bloomberg recommend that the city, with the help of private donors, make cash payments to poor and underprivileged parents who can certify that their children are attending school on a regular basis. The payments would start after third grade and go through high school, rising each year as dropout rates get higher and a child's forgone earning potential is higher. What economic concept does this policy represent?
A) public goods
B) technological progress
C) externalities
D) the "invisible hand"
E) incentives
Answer: E
Topic: Integrative
Skill: Level 5: Critical thinking
Section: Integrative
Status: Old
AACSB: Reflective thinking
16) Nathan drinks three cups of coffee per day. The marginal benefit that he enjoys from drinking the third cup is
A) less than the marginal benefit that he receives from drinking the second cup.
B) the same as the total benefit from drinking all three cups minus the total benefit of drinking the first two cups.
C) both A and B.
D) greater than the marginal benefit that he receives from drinking the second cup.
E) none of the above.
Answer: C
Topic: Integrative
Skill: Level 5: Critical thinking
Section: Integrative
Status: Old
AACSB: Reflective thinking
1.5 Chapter Figures
1) The relationship between distance traveled in 5 hours and speed shown in the figure above is
A) direct, linear.
B) inverse, linear.
C) direct, non-linear.
D) inverse, positive.
E) direct, negative.
Answer: A
Topic: Positive relationship
Skill: Level 2: Using definitions
Section: Chapter 1 Appendix - Checkpoint 3
Status: Old
AACSB: Analytic skills
2) The relationship between distance traveled in five hours and speed shown in the figure above is
A) positive.
B) negative.
C) inverse.
D) cross-sectional.
E) multilateral.
Answer: A
Topic: Positive relationship
Skill: Level 2: Using definitions
Section: Chapter 1 Appendix - Checkpoint 3
Status: Old
AACSB: Analytic skills
3) The figure above shows the relationship between distance sprinted and recovery time. The curve becomes steeper because as the distance sprinted increases,
A) the extra recovery time needed from sprinting another 100 yards increases.