Table: Distribution of Income in Country X in 2010 Before and After Taxes Quintile Before Taxes and Transfers After Taxes and Transfers Lowest 20 percent 1.1 5.1 Second 20 percent 7.9 11.1 Third 20 percent 15.5 16.5 Fourth 20 percent 24.7 23.8 Highest 20 percent 50.7 43.5 The table above shows the distribution of income in Country X in 2010 before and after taxes and transfer payments. Which of the following can be concluded about the effect of the government’s tax and transfer policies on income distribution in Country X?

A perfectly competitive market produces the socially efficient level of output when the marginal social benefit of the last unit of output produced is

National defense is an example of a public good because

Assume the government introduces a lump-sum tax on each firm within a perfectly competitive industry. Which of the following will be true after the introduction of this tax?

Country A has a Gini coefficient of 0.5, and Country B has a Gini coefficient of 0.3. Which of the following statements is definitely true?

The following graph illustrates the market for balloons. This graph illustrates the market for balloons, with price on the vertical axis ranging from $2 to $8 and quantity on the horizontal axis. It includes a downward-sloping demand curve labeled D, and two upward-sloping supply curves: the original supply curve labeled S, and a second curve labeled S plus Tax representing the effect of a tax. Dashed lines indicate an initial equilibrium price of $5 with a quantity of 90 balloons, and a new equilibrium after the tax at a price of $6 with a quantity of 60 balloons. Horizontal and vertical dashed lines connect these points to the axes, showing how the tax shifts the supply curve upward and reduces the equilibrium quantity in the balloon market. Use the graph to answer questions a-f. Calculate the area of consumer surplus before the tax. Show your work. (3 points) What is the value of the tax in the graph below? How do you know? (3 points) What is the after tax price the sellers keep? (2 points) Calculate the total tax revenue. Show your work. (2 points) Calculate consumer surplus after the tax. Show your work. (2 points) Between the prices of $5 and $6, is demand relatively elastic, relatively inelastic, unit elastic, perfectly inelastic, or perfectly elastic? Explain your answer. (3 points)

Assuming a single, profit-maximizing employer in a labor market with many workers, which of the following statements relating to this monopsony is true?

Which of the following is most likely to reduce inequality in a country’s distribution of income?

Which of the following is true for a price-discriminating firm?

The figure presents a graph in the first quadrant of a coordinate plane, with the origin labeled 0. The horizontal axis is labeled Quantity, and the vertical axis is labeled Price. The horizontal axis is about twice as long as the vertical axis is high. There are four curves on the graph, which are labeled M C, A V C, A T C, and M R. The M C curve begins about one fourth of the way up and just to the right of the vertical axis. It steadily moves upward and to the right, and ends about three quarters of the way along the horizontal axis, near the top of the graph. The A V C curve begins about half way up and just to the right of the vertical axis. It moves downward and to the right, and reaches a minimum when it crosses the M C curve. It then begins to moves upward and to the right, and ends on the right side of the graph, well below and to the right of the M C curve. The A T C curve begins near the top and just to the right of the vertical axis. In a similar shape as the A V C curve, the A T C curve falls, reaches a minimum, and then rises. The A T C curve is always above the A V C curve, and the distance between the two curves gradually narrows as they move from left to right along the graph. The A T C curve reaches its minimum point when it crosses the M C curve. The A T C and M C curves cross each other above and to the right of where the A V C and M C curves cross each other. After reaching its minimum point, the A T C curve moves upward and to the right, until it ends on the right side of the graph, to the right of the M C curve and above the A V C curve. The M R curve is a horizontal line that begins about half way up the vertical axis and extends across the length of the graph. The M R line intersects the M C curve above and to the right of the intersection of the M C and A V C curves, and below and to the left of the intersection of the M C and A T C curves. Quantity Q sub 0, on the horizontal axis, is identified by a dashed vertical line that extends from the intersection of the M C and the A V C curves, and extends down to the horizontal axis. Quantity Q sub 1, on the horizontal axis, is identified by a dashed vertical line that extends from the intersection of the M R and M C curves, and extends down to the horizontal axis. Quantity Q sub 2, on the horizontal axis, is identified by a dashed vertical line that extends from the intersection of the M C and A T C curves, and extends down to the horizontal axis. The graph above shows the short-run cost and revenue curves for a perfectly competitive firm. Assume that the market price is P0 and the firm is producing at quantity Q2. To maximize profit, the firm should