【正文】 C: Interpretive 16. The adage, There is no such thing as a free lunch, meansa. even people on welfare have to pay for food.b. the cost of living is always increasing.c. to get something we like, we usually have to give up another thing we like.d. all costs are included in the price of a product.ANS: C DIF: 1 REF: 11TOP: Tradeoffs MSC: Definitional 17. Economists use the phrase There is no such thing as a free lunch, to illustrate the principle thata. inflation almost always results in higher prices over time.b. nothing is free in a market economy.c. making decisions requires trading off one goal against another.d. if something looks too good to be true, it probably is not worth pursuing.ANS: C DIF: 2 REF: 11TOP: Tradeoffs MSC: Interpretive 18. Which of the following statements best represents the principle represented by the adage, There is no such thing as a free lunch?a. Melissa can attend the concert only if she takes her sister with her.b. Greg is hungry and homeless.c. Brian must repair the tire on his bike before he can ride it to class.d. Kendra must decide between going to Colorado or Cancun for spring break.ANS: D DIF: 3 REF: 11TOP: Tradeoffs MSC: Applicative 19. The principle that people face tradeoffs applies toa. individuals.b. families.c. societies.d. All of the above are correct.ANS: D DIF: 1 REF: 11TOP: Tradeoffs MSC: Applicative 20. A typical society strives to get the most it can from its scarce resources. At the same time, the society attempts to distribute the benefits of those resources to the members of the society in a fair manner. In other words, the society faces a tradeoff betweena. guns and butter.b. efficiency and equity.c. inflation and unemployment.d. work and leisure.ANS: B DIF: 1 REF: 11TOP: Efficiency, Equity MSC: Interpretive 21. Guns and butter are used to represent the classic societal tradeoff between spending ona. durable and nondurable goods.b. imports and exports.c. national defense and consumer goods.d. law enforcement and agriculture.ANS: C DIF: 1 REF: 11TOP: Tradeoffs MSC: Interpretive 22. When society requires that firms reduce pollution, there isa. a tradeoff because of reduced ines to the firms39。s members.c. society39。s members.ANS: D DIF: 2 REF: 11TOP: Equity MSC: Interpretive 28. Senator Smith wants to increase taxes on people with high ines and use the money to help the poor. Senator Jones argues that such a tax will discourage successful people from working and will therefore make society worse off. An economist would say thata. we should agree with Senator Smith.b. we should agree with Senator Jones.c. a good decision requires that we recognize both viewpoints.d. there are no tradeoffs between equity and efficiency.ANS: C DIF: 2 REF: 11TOP: Efficiency, Equity MSC: Applicative 29. Which of the following words and phrases best captures the notion of equity?a. minimum wasteb. maximum benefitc. samenessd. fairnessANS: D DIF: 1 REF: 11TOP: Equity MSC: Definitional 30. When government policies are enacted,a. equity can usually be enhanced without an efficiency loss, but efficiency can never be enhanced without an equity loss.b. efficiency can usually be enhanced without an equity loss, but equity can never be enhanced without an efficiency loss.c. it is always the case that either efficiency and fairness are both enhanced, or efficiency and equity are both diminished.d. None of the above are correct.ANS: D DIF: 2 REF: 11TOP: Government, Efficiency, Equity MSC: Applicative 31. A likely effect of government policies that redistribute ine and wealth from the wealthy to the poor is that those policiesa. enhance equity.b. reduce efficiency.c. reduce the reward for working hard.d. All of the above are correct.ANS: D DIF: 2 REF: 11 TOP: Government, Efficiency, Equity MSC: Interpretive 32. When the government implements programs such as progressive ine tax rates, which of the following is likely to occur?a. Equity is increased and efficiency is increased.b. Equity is increased and efficiency is decreased.c. Equity is decreased and efficiency is increased.d. Equity is decreased and efficiency is decreased.ANS: B DIF: 2 REF: 11 TOP: Government, Efficiency, Equity MSC: Interpretive 33. As a result of a successful attempt by government to cut the economic pie into more equal slices,a. it is easier to cut the pie, and therefore the economy can produce a larger pie.b. the government can more easily allocate the pie to those most in need.c. the pie gets smaller, and there will be less pie overall.d. government will spend too much time cutting and it causes the economy to lose the ability to produce enough pie for everyone.ANS: C DIF: 3 REF: 11 TOP: Government, Efficiency, Equity MSC: Analytical 34. When the government attempts to improve equity in an economy the result is oftena. an increase in overall output in the economy.b. additional government revenue since overall ine will increase.c. a reduction in equity.d. a reduction in efficiency.ANS: D DIF: 2 REF: 11 TOP: Government, Efficiency, Equity MSC: Interpretive 35. When the government redistributes ine from the wealthy to the poor,a. efficiency is improved, but equity is not.b. both wealthy people and poor people benefit directly.c. people work less and produce fewer goods and services.d. wealthy people consume fewer goods, but poor people consume more goods, resulting in no real change.ANS: C DIF: 2 REF: 11 TOP: Government, Efficiency, Equity MSC: Interpretive 36. In economics, the cost of something isa. the dollar amount of obtaining it.b. always measured in units of time given up to get it.c. what you give up to get it.d. often impossible to quantify, even in principle.ANS: C DIF: 1 REF: 11TOP: Opportunity cost MSC: Definitional 37. What you give up to obtain an item is