ECO 365 Final Exam (August 2015) - Assignment.pdf
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demand curve shifting to the right.supply curve shifting to the left.Complete Answers just a click away <strong>ECO</strong> <strong>365</strong> Week 3 Knowledge Check17). Many call centers that provide telephone customer services for U.S.companies have been established in India, but few or none have been establishedin China. Why?China is at a more advanced stage of economic development than India.China lacks the political infrastructure to support call centers.Indian labor costs are equal to Chinese labor costs.Chinese labor lacks the specific language skills needed to make call centersprofitable in China.18). Suppose people freely choose to spend 40 percent of their income on healthcare, but then the government decides to tax 40 percent of that person’s incometo provide the same level of coverage as before. What can be said aboutdeadweight loss in each case?There is no difference because the total spending remains the same and thehealth care purchased remains the same.Taxing income results in less deadweight loss because government knows betterwhat health care coverage is good for society.Taxing income results in deadweight loss, and purchasing health care on one’sown doesn’t result in deadweight loss.There is no difference between goods that are purchased in the market in eithercase.Click here to download Complete Answers of <strong>ECO</strong> <strong>365</strong> Week 4 Knowledge Check19). At one time, sea lions were depleting the stock of steelhead trout. One idea toscare sea lions away from the Washington coast was to launch fake killer whales,which are predators of sea lions. The cost of making the first whale is $16,000($5,000 for materials and $11,000 for the mold). The mold can be reused to makeadditional whales, and so additional whales cost $5,000 each. Based on thesenumbers, the production of fake killer whales exhibits: