Catherine Zulueta
2.1.5 Practice
AP Microeconomics
1. As Thanksgiving approaches, Martha sees many advertisements encouraging her to donate
her time or money to help serve Thanksgiving dinner to the poor families in her community.
● If Martha donates $20, is she acting in her own self-interest? Explain your answer. (5
points)
○ Martha is not acting in her own self interest by donating her time and money on
Thanksgiving. Self-interest is when one seeks their own personal gain, but by
sacrificing her own goods for the sake of others, she is not acting in her own self
interest. However, it could be argued that Martha is indeed acting in her own self
interest, depending on whether or not she gains a feeling of virtue by donating to
the poor.
● True or False: If Martha donates two hours on Thanksgiving day to help serve food at
the local community center, but doesn't donate any money, it doesn't cost her anything to
help the poor families in her community. Explain your answer. (5 points)
○ This statement is false because by helping the poor in her community, she is
sacrificing her time (two hours are a form of currency) that she could have spent
with her own family.
● If Oscar donates $100, and Martha donates only $20, is Oscar behaving rationally?
Explain your answer. (5 points)
○ Oscar is behaving rationally because if he felt that donating $100 would harm
him, then he would not have donated that much. Oscar may be wealthier than
Martha.
2. Income taxes are taxes levied based on the income you earn.In the U.S.income taxes are
progressive, which means that people with higher incomes pay a higher percentage of their
income in taxes. Some lawmakers advocate a flat tax, in which every income earner pays the
same percentage of income in taxes. A flat tax would significantly reduce the paperwork and
rules and regulations associated with the income tax. However, changing the tax rules would
cause much disruption in the economy as people changed their economic behavior in response
to the change in the tax law.
● Make a normative economic statement in favor of a flat income tax. (5 points)
2.1.5 Practice
AP Microeconomics
1. As Thanksgiving approaches, Martha sees many advertisements encouraging her to donate
her time or money to help serve Thanksgiving dinner to the poor families in her community.
● If Martha donates $20, is she acting in her own self-interest? Explain your answer. (5
points)
○ Martha is not acting in her own self interest by donating her time and money on
Thanksgiving. Self-interest is when one seeks their own personal gain, but by
sacrificing her own goods for the sake of others, she is not acting in her own self
interest. However, it could be argued that Martha is indeed acting in her own self
interest, depending on whether or not she gains a feeling of virtue by donating to
the poor.
● True or False: If Martha donates two hours on Thanksgiving day to help serve food at
the local community center, but doesn't donate any money, it doesn't cost her anything to
help the poor families in her community. Explain your answer. (5 points)
○ This statement is false because by helping the poor in her community, she is
sacrificing her time (two hours are a form of currency) that she could have spent
with her own family.
● If Oscar donates $100, and Martha donates only $20, is Oscar behaving rationally?
Explain your answer. (5 points)
○ Oscar is behaving rationally because if he felt that donating $100 would harm
him, then he would not have donated that much. Oscar may be wealthier than
Martha.
2. Income taxes are taxes levied based on the income you earn.In the U.S.income taxes are
progressive, which means that people with higher incomes pay a higher percentage of their
income in taxes. Some lawmakers advocate a flat tax, in which every income earner pays the
same percentage of income in taxes. A flat tax would significantly reduce the paperwork and
rules and regulations associated with the income tax. However, changing the tax rules would
cause much disruption in the economy as people changed their economic behavior in response
to the change in the tax law.
● Make a normative economic statement in favor of a flat income tax. (5 points)
