Question 1

Which of the following taxes is based on the ability-to-pay principle?

Accepted Answer

A) tolls on a bridge 
B) income taxes 
C) gasoline excise taxes 
D) property taxes 
E) user fees that collect the same amount from each person 
A) tolls on a bridge 
B) income taxes 
C) gasoline excise taxes 
D) property taxes 
E) user fees that collect the same amount from each person

Question 2

The objective of the household is to

Accepted Answer

A) maximize household wealth 
B) own as much land as possible 
C) save as much money as possible 
D) acquire as many goods as possible 
E) maximize utility 
A) maximize household wealth 
B) own as much land as possible 
C) save as much money as possible 
D) acquire as many goods as possible 
E) maximize utility

Question 3

During recent elections, consumer groups in various states attempted to get the sales tax on all medicines and drugs removed.They argued that such a tax is "severely regressive." What is the economic interpretation of their statement?

Accepted Answer

A) The poor get ill more often than do the rich. 
B) The poor pay higher prices for medicine and drugs than do the rich. 
C) The poor pay a higher percentage of their income for medicine and drugs than do the rich. 
D) All consumers pay too much money for medicine and drugs. 
E) The sales tax discourages the poor from seeking medical treatment. 
A) The poor get ill more often than do the rich. 
B) The poor pay higher prices for medicine and drugs than do the rich. 
C) The poor pay a higher percentage of their income for medicine and drugs than do the rich. 
D) All consumers pay too much money for medicine and drugs. 
E) The sales tax discourages the poor from seeking medical treatment.

Question 4

Which of the following would be the best example of a sole proprietorship?

Accepted Answer

A) The legal office of Alias, Smith and Jones 
B) A local mom and pop restaurant 
C) Microsoft 
D) A local hospital 
E) A State University 
A) The legal office of Alias, Smith and Jones 
B) A local mom and pop restaurant 
C) Microsoft 
D) A local hospital 
E) A State University

Question 5

Trade restrictions result in all of the following except one.Which is the exception?

Accepted Answer

A) higher prices 
B) fewer choices 
C) improved quality 
D) misallocation of resources 
E) reduced competition 
A) higher prices 
B) fewer choices 
C) improved quality 
D) misallocation of resources 
E) reduced competition

Question 6

In recent years defense expenditures has fallen as a share of federal government outlays.

Accepted Answer

A) True 
 B)False

Question 7

Market activity differs from government activity because

Accepted Answer

A) markets generally force prices to below-cost levels 
B) governments never charge for the services they provide 
C) markets do not use voluntary exchange mechanisms 
D) markets provide a direct link between benefits and costs 
E) governments have strong incentives to keep costs under strict control 
A) markets generally force prices to below-cost levels 
B) governments never charge for the services they provide 
C) markets do not use voluntary exchange mechanisms 
D) markets provide a direct link between benefits and costs 
E) governments have strong incentives to keep costs under strict control

Which of the following taxes is based on the ability-to-pay principle?

The objective of the household is to

During recent elections, consumer groups in various states attempted to get the sales tax on all medicines and drugs removed.They argued that such a tax is "severely regressive." What is the economic interpretation of their statement?

Which of the following would be the best example of a sole proprietorship?

Trade restrictions result in all of the following except one.Which is the exception?

In recent years defense expenditures has fallen as a share of federal government outlays.

Market activity differs from government activity because

The Art and Science of Economic Analysis

Appendix--Understanding Graphs

Economic Tools and Economics Systems

Demand, Supply, and Markets

Elasticity of Demand and Supply

Appendix--Price Elasticity and Tax Incidence

Consumer Choice and Demand

Appendix--Indifference Curves and Utility Maximization

Production and Cost in the Firm

A--Perfect Competition

B--Perfect Competition

A--Monopoly

B--Monopoly

Monopolistic Competition and Oligopoly

Resource Markets

Labor Markets and Labor Unions

Capital, Interest, and Corporate Finance

Transaction Costs, Imperfect Information, and Behavioral Economics

Economic Regulation and Antitrust Policy

Public Goods and Public Choice

Externalities and the Environment

Income Distribution and Poverty

International Trade

International Finance

Economic Development

Filters

Exam 3: Economic Decision Makers

Which of the following taxes is based on the ability-to-pay principle?

The objective of the household is to

During recent elections, consumer groups in various states attempted to get the sales tax on all medicines and drugs removed.They argued that such a tax is "severely regressive." What is the economic interpretation of their statement?

Which of the following would be the best example of a sole proprietorship?

Trade restrictions result in all of the following except one.Which is the exception?

In recent years defense expenditures has fallen as a share of federal government outlays.

Market activity differs from government activity because

The Art and Science of Economic Analysis

Appendix--Understanding Graphs

Economic Tools and Economics Systems

Demand, Supply, and Markets

Elasticity of Demand and Supply

Appendix--Price Elasticity and Tax Incidence

Consumer Choice and Demand

Appendix--Indifference Curves and Utility Maximization

Production and Cost in the Firm

A--Perfect Competition

B--Perfect Competition

A--Monopoly

B--Monopoly

Monopolistic Competition and Oligopoly

Resource Markets

Labor Markets and Labor Unions

Capital, Interest, and Corporate Finance

Transaction Costs, Imperfect Information, and Behavioral Economics

Economic Regulation and Antitrust Policy

Public Goods and Public Choice

Externalities and the Environment

Income Distribution and Poverty

International Trade

International Finance

Economic Development

Filters