1] Economists suggest that for every $1 income tax raised to fund government projects, the social cost of this $1 tax is _______ than $1. This is due to the change in social surplus arising from _______. If you wish to observe a low value for MCPF, for a given labour demand, you would like the labour supply to be wage _______.

a.Higher; fewer hours of work; inelastic

b.Higher; fewer hours of work; elastic

c.Lower; fewer hours of work; elastic

d.Lower; more hours of work; inelastic

2] Suppose the cost of a vile of flu vaccine is $20 and it cuts the risk of death from flu-related complications from 2 in 100,000 to 1 in 100,000. If people are willing to pay this price, it may imply that they value their lives at __________.

a.$2,000,000

b.$200,000

c.$800,000

d.$1,000,000

3]The demand for a good is P = 10 - 0.05Q and you observe the quantity demanded is currently 100 units. However, the good creates air pollution at the cost of $1 per unit consumed. The total negative externality that this market creates is equal to __________.

a.$90

b.$100

c.$80

d.$70