Question 1

A World View article titled "Secondhand Smoke Kills 600,000 People a Year: Study" claims what percentage of all deaths worldwide are caused by secondhand smoke?

Accepted Answer

A) 1 percent. 
B) 2 percent. 
C) 5 percent. 
D) None of the choices are correct. 
A) 1 percent. 
B) 2 percent. 
C) 5 percent. 
D) None of the choices are correct.

Question 2

The theory of public choice examines

Accepted Answer

A) How to apply cost-benefit analysis. 
B) The optimal government intervention to correct market failures. 
C) How a policy of laissez faire works to allocate resources. 
D) The role of self-interest in public decisions. 
A) How to apply cost-benefit analysis. 
B) The optimal government intervention to correct market failures. 
C) How a policy of laissez faire works to allocate resources. 
D) The role of self-interest in public decisions.

Question 3

The largest single source of revenue for the federal government is

Accepted Answer

A) Excise taxes. 
B) Corporate income taxes. 
C) Social Security payroll taxes. 
D) Personal income taxes. 
A) Excise taxes. 
B) Corporate income taxes. 
C) Social Security payroll taxes. 
D) Personal income taxes.

Question 4

Which of the following is the best example of a government effort to address market failure in relation to the FOR WHOM to produce question?

Accepted Answer

A) Antitrust policy. 
B) Regulations reducing pollution. 
C) Transfer payments. 
D) The production of goods that allow free riders. 
A) Antitrust policy. 
B) Regulations reducing pollution. 
C) Transfer payments. 
D) The production of goods that allow free riders.

Question 5

Any imperfection in the market mechanism that prevents optimal outcomes is known as

Accepted Answer

A) Market failure. 
B) Government failure. 
C) External cost. 
D) Public cost. 
A) Market failure. 
B) Government failure. 
C) External cost. 
D) Public cost.

Question 6

An In the News article titled "Perceptions of Government Failure" implies that people lack confidence in the government.If this is true,it may be due to persistent examples of

Accepted Answer

A) Market failure. 
B) Government failure. 
C) Efficiency. 
D) Merit goods. 
A) Market failure. 
B) Government failure. 
C) Efficiency. 
D) Merit goods.

Question 7

An externality affecting demand can be measured graphically as the

Accepted Answer

A) Horizontal distance between the market demand curve and the social demand curve. 
B) Vertical distance between the market demand curve and the social demand curve. 
C) Height of the social demand curve at all points. 
D) Height of the market demand curve at all points. 
A) Horizontal distance between the market demand curve and the social demand curve. 
B) Vertical distance between the market demand curve and the social demand curve. 
C) Height of the social demand curve at all points. 
D) Height of the market demand curve at all points.

Question 8

The market will overproduce goods that have external costs because

Accepted Answer

A) Producers experience lower costs than society. 
B) Producers experience higher costs than society. 
C) The government is not able to produce these goods. 
D) Producers cannot keep these goods from consumers who do not pay,so they have to produce greater amounts. 
A) Producers experience lower costs than society. 
B) Producers experience higher costs than society. 
C) The government is not able to produce these goods. 
D) Producers cannot keep these goods from consumers who do not pay,so they have to produce greater amounts.

Question 9

Market failure implies that the market mechanism

Accepted Answer

A) Leads the economy to a point outside the production possibilities curve. 
B) Leads the economy to the wrong mix of output. 
C) Causes shortages or surpluses in the market. 
D) Causes government failure. 
A) Leads the economy to a point outside the production possibilities curve. 
B) Leads the economy to the wrong mix of output. 
C) Causes shortages or surpluses in the market. 
D) Causes government failure.

Question 10

Government waste implies that the public sector is not producing as many services as it could with the resources at its disposal.

Accepted Answer

A) True 
 B)False

Question 11

When the economy experiences abnormally high unemployment,

Accepted Answer

A) There is government failure. 
B) There is macro instability. 
C) The economy is producing on the production possibilities curve. 
D) No market failure occurs. 
A) There is government failure. 
B) There is macro instability. 
C) The economy is producing on the production possibilities curve. 
D) No market failure occurs.

Question 12

What is public choice theory,and how can it affect government intervention?

Accepted Answer

Public choice theory assumes that public

Question 13

State governments receive half of their tax revenue from property taxes.

Accepted Answer

A) True 
 B)False

Exam 4: The Role of Government

A World View article titled "Secondhand Smoke Kills 600,000 People a Year: Study" claims what percentage of all deaths worldwide are caused by secondhand smoke?

The theory of public choice examines

The largest single source of revenue for the federal government is

Which of the following is the best example of a government effort to address market failure in relation to the FOR WHOM to produce question?

Any imperfection in the market mechanism that prevents optimal outcomes is known as

An In the News article titled "Perceptions of Government Failure" implies that people lack confidence in the government.If this is true,it may be due to persistent examples of

An externality affecting demand can be measured graphically as the

The market will overproduce goods that have external costs because

Market failure implies that the market mechanism

Government waste implies that the public sector is not producing as many services as it could with the resources at its disposal.

When the economy experiences abnormally high unemployment,

What is public choice theory,and how can it affect government intervention?

State governments receive half of their tax revenue from property taxes.

Economics: the Core Issues

The Useconomy: a Global View

Supply and Demand

National Income Accounting

Unemployment

Inflation

The Business Cycle

Aggregate Demand

Self-Adjustment or Instability

Fiscal Policy

Deficits and Debt

Money and Banks

The Federal Reserve System

Monetary Policy

Supply-Side Policy: Short-Run Options

Growth and Productivity: Long-Run Possibilities

Theory Versus Reality

Consumer Choice

Elasticity

The Costs of Production

The Competitive Firm

Competitive Markets

Monopoly

Oligopoly

Monopolistic Competition

Natural Monopolies: Deregulation

Environmental Protection

The Farm Problem

The Labor Market

Labor Unions

Financial Markets

Taxes: Equity Versus Efficiency

Transfer Payments: Welfare and Social Security

International Trade

International Finance

Global Poverty

Filters