1-Which of the following statements BEST describes the CITY Income Tax on the wages of individuals in Northeast Ohio?

A.Individuals with higher incomes will pay a LOWER rate (percent) of CITY Income Tax

B.Individuals with higher incomes will pay a HIGHER rate (percent) of CITY Income TaxC.All individuals living and working in the same city will pay the same AMOUNT of CITY Income TaxD.All individuals living and working in the same city will pay the same RATE (percent) of CITY Income Tax

2-Moral hazards are most likely to result from:

A.Systems in which individuals ARE NOT motivated to do their best

B.Systems in which individuals ARE motivated to do their best

C.Low income tax rates

D.Inability to distinguish right from wrong

3-Which statement describes a situation that potentially creates moral hazard?

A.Using sales commissions as compensation

B.Home Depot requiring substantial refundable deposits on rental yard equipment

C.Using grades (i.e., A, B, C, D, and F) to judge classroom performance

D.NOT using grades (i.e., A, B, C, D, and F) to judge classroom performance

4-Which of the following BEST describes the CAFE rules:

A.These rules require the use of certain emission control devices designed to reduce pollution.

B.These rules require the use of driver and passenger safety devices (i.e. seat belts and air bags).

C.These rules establish minimum fuel economy standards for each individualcarmodel manufactured

.D.These rules establish minimum fuel economy standards for an entire manufactured fleet of automobiles.

5-Which of the following is LEGAL in the USA?

A.Restraint of trade

B.CollusionC.Monopoly

D.Price fixing