1a) Which of the following does not describe a principal-agent relationship?
a. An NGO sponsoring the primary education of orphans
b. payless inc hiring a salesperson
c. dixie hiring a lawyer
d. citizens electing a state senator
e. opal getting her car repaired
1b) Which of the following is an example of tax avoidance?
a. Peter moving to a different state to benefit from its lower tax rates
b. Christina understanding her income from lawn mowing to reduce to her tax bill
c. Joseph claiming inflated deduction to get higher income tax returns
d. Marshall selling commodities in an illegal black market at low prices to reduce his tax bill
e. David taking his family on a European tour financed by his earnings from drug dealing
1c) Competing interest legislation involves:
a. concentrated costs and widespread benefits
b. both widespread costs and widespread benefits
c. both concentrated costs and concentrated benefits
d. widespread costs and concentrated benefits
e. only concentrated costs, benefits are not involved
1d) Which of the following is not an example of an open-access resource?
a. deer in a forest
b. fish in the ocean
c. food in a restaurant
d. wild flowers
e. trees in a forest
1e) The purpose of a political action committee is to:
a. help elect officials sympathetic to its members special interests
b. help elect officials who will enact fair legislation
c. raise money for public interest groups
d. exchange trade secrets
e. combat the political power of special-interest groups
1f) Which of the following is true in the context of the loanable funds market?
a. savers are the suppliers of loanable funds, and borrowers are the demanders of loanable funds
b. the supply of loanable funds curve slopes downward, and the demand for loanable funds curve slopes upward
c. the supply of loanable funds curve reflects the negative relation between the market rate of interest and the quantity of savings
d. households play the role of financial intermediaries
e. banks pay a higher interest rate on consumer savings than that they could earn by lending these funds out
1g) Which of the following is an example of tax evasion?
a. deducting charitable contributions when figuring income tax
c. claiming children's education expenses as tax exemptions
c. understanding ones income
d. converting all gold possessions into cash
e. selling alcohol and cigarettes