03 Jun Question 1.In the United States and in most European coun
Question
1.In the United States and in most European countries, aging populations and declining
birthrates threaten public finances. As the population ages, there are fewer workers
paying taxes relative to the number of retired people receiving government benefits.
Which of the following government policies would NOT help reduce the pressure on
public finances?(Points:1)
offer financial incentives to increase the birthrate
reduce taxes paid by current workers so that they an save for their future
reduce retiree benefit payments
raise the retirement age
2.In
the first six months of 2003, branches of Commerce Bank in New York City were
robbed 14 times. The New York City Police recommended steps the bank could take to
deter robberies, including the installation of plastic barriers called "bandit barriers." The
police were surprised the bank did not take their advice. According to a deputy
commissioner of police, "Commerce does very little of what we recommend. They’ve
told our detectives they have no interest in ever putting in the barriers."
It would seem that Commerce bank would have a strong incentive to install "bandit
barriers" to deter robberies. Why wouldn’t they do it? (Points:1)
The banks would rather delay installation of any theft deterring equipment in anticipation
of new lower cost innovations in the security devices market.
The banks must have weighed the cost of installing bandit barriers against the benefits
and decided that they have "no interest in ever putting in the barriers".
The banks are concerned that "bandit barriers" would send the wrong message to
customers — that the bank is unsafe.
The banks probably resent any interference from the police department.
3.Cassie’s
Quilts alters, reconstructs and restores heirloom quilts. Cassie has just spent
$800
purchasing, cleaning and reconstructing an antique quilt which she expects to sell for
$1,500 once she is finished. After having spent $800, Cassie discovers that she would
need some special period fabric that would cost her $200 in material and time in order
to complete the task. Alternatively, she can sell the quilt "as is" now for $900. What is
the marginal cost of completing the task?(Points:1)
$200
$500
$1,000
$1,000 plus the value of her time
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