Question 1

In practice, distribution under socialism is primarily determined by:

Accepted Answer

A) individual altruism and cooperation. 
B) the ability of each individual to produce. 
C) central planners within the government. 
D) market forces of supply and demand. 
A) individual altruism and cooperation. 
B) the ability of each individual to produce. 
C) central planners within the government. 
D) market forces of supply and demand.

Question 2

Through most of the 20th century in the former USSR:

Accepted Answer

A) people contributed what they could and took what they needed without a market. 
B) the country was free of economic forces. 
C) a type of socialism that departed from theory was implemented. 
D) goods were distributed according to their need. 
A) people contributed what they could and took what they needed without a market. 
B) the country was free of economic forces. 
C) a type of socialism that departed from theory was implemented. 
D) goods were distributed according to their need.

Question 3

Assuming government's goal is to benefit society as much as possible:

Accepted Answer

A) actions with negative and positive externalities should be encouraged. 
B) actions with negative and positive externalities should be restricted. 
C) actions with negative externalities should be encouraged and actions with positive externalities should be restricted. 
D) actions with negative externalities should be restricted and actions with positive externalities should be encouraged. 
A) actions with negative and positive externalities should be encouraged. 
B) actions with negative and positive externalities should be restricted. 
C) actions with negative externalities should be encouraged and actions with positive externalities should be restricted. 
D) actions with negative externalities should be restricted and actions with positive externalities should be encouraged.

Question 4

Membership in the Group of Seven consists of both developed and developing countries.

Accepted Answer

A) True 
 B)False

Question 5

Since the late 1980s:

Accepted Answer

A) the Soviet socialist economic and political structure has spread to other nations. 
B) the Soviet socialist economic and political structure has fallen apart. 
C) the Soviet Union installed Soviet-dominated governments in a number of Eastern European countries. 
D) socialism has gained popularity among the governments of Eastern Europe. 
A) the Soviet socialist economic and political structure has spread to other nations. 
B) the Soviet socialist economic and political structure has fallen apart. 
C) the Soviet Union installed Soviet-dominated governments in a number of Eastern European countries. 
D) socialism has gained popularity among the governments of Eastern Europe.

Question 6

A firm's profits equal $100 if

Accepted Answer

A) its total revenue is $100. 
B) the sum of its total revenue and its total cost is $100. 
C) the difference between its total revenue and its total cost is $100. 
D) its total cost is $100. 
A) its total revenue is $100. 
B) the sum of its total revenue and its total cost is $100. 
C) the difference between its total revenue and its total cost is $100. 
D) its total cost is $100.

Question 7

Define a market economy.

Accepted Answer

A market economy is an economi

Question 8

Households are on the:

Accepted Answer

A) supply side of factor markets and the demand side of goods markets. 
B) demand side of factor markets and the supply side of goods markets. 
C) supply side of both factor markets and goods markets. 
D) demand side of both factor markets and goods markets. 
A) supply side of factor markets and the demand side of goods markets. 
B) demand side of factor markets and the supply side of goods markets. 
C) supply side of both factor markets and goods markets. 
D) demand side of both factor markets and goods markets.

Question 9

Certificates of ownership of a company are called:

Accepted Answer

A) financial liabilities. 
B) limited liabilities. 
C) profits. 
D) stocks. 
A) financial liabilities. 
B) limited liabilities. 
C) profits. 
D) stocks.

Question 10

Which of the following was one of Marx's predictions?

Accepted Answer

A) Capitalism would evolve into feudalism. 
B) Competition among capitalists would benefit workers. 
C) Firms would become larger and larger. 
D) Capitalism in its pure form was benevolent. 
A) Capitalism would evolve into feudalism. 
B) Competition among capitalists would benefit workers. 
C) Firms would become larger and larger. 
D) Capitalism in its pure form was benevolent.

Question 11

Flu vaccinations of school children have the unintended effect of protecting the vulnerable elderly from contracting the virus. This is an example of a:

Accepted Answer

A) free rider problem. 
B) social force. 
C) goods distribution. 
D) positive externality. 
A) free rider problem. 
B) social force. 
C) goods distribution. 
D) positive externality.

Question 12

Which of the following is an international financial institution concerned primarily with monetary issues and international financial arrangements?

Accepted Answer

A) International Monetary Fund 
B) European Union 
C) Group of Five 
D) Group of Seven 
A) International Monetary Fund 
B) European Union 
C) Group of Five 
D) Group of Seven

Question 13

If a firm's total revenue is $10,000 and its total costs are $9,000, then its profits are:

Accepted Answer

A) −$1,000. 
B) $1,000. 
C) $10,000. 
D) $19,000. 
A) −$1,000. 
B) $1,000. 
C) $10,000. 
D) $19,000.

Question 14

When Coca Cola introduced a new, low-calorie version of Coca Cola called C2, despite a major marketing effort, sales of C2 were weak and many doubted that the product would last. Coke's experience with C2 illustrates the economic concept of:

Accepted Answer

A) producer sovereignty. 
B) consumer sovereignty. 
C) limited liability. 
D) market failure. 
A) producer sovereignty. 
B) consumer sovereignty. 
C) limited liability. 
D) market failure.

Question 15

Capitalism:

Accepted Answer

A) is based on private property and the market. 
B) does not have a rationing mechanism. 
C) gives private property rights to government. 
D) relies on market forces to establish initial property rights. 
A) is based on private property and the market. 
B) does not have a rationing mechanism. 
C) gives private property rights to government. 
D) relies on market forces to establish initial property rights.

Question 16

The Industrial Revolution was important to the history of economic systems because it:

Accepted Answer

A) changed the way people exchanged goods-from barter to using money as a medium of exchange. 
B) concentrated wealth in the hands of a few noblemen who then controlled the land in their region, creating a feudal system. 
C) increased the wealth of merchants and artisans and eventually led to a change in economic systems to mercantilism. 
D) increased the power of capitalists and eventually led to a revolution instituting capitalism as the dominant economic system. 
A) changed the way people exchanged goods-from barter to using money as a medium of exchange. 
B) concentrated wealth in the hands of a few noblemen who then controlled the land in their region, creating a feudal system. 
C) increased the wealth of merchants and artisans and eventually led to a change in economic systems to mercantilism. 
D) increased the power of capitalists and eventually led to a revolution instituting capitalism as the dominant economic system.

Question 17

Which of the following is not a characteristic of pure capitalism?

Accepted Answer

A) Government ownership of means of production 
B) Private ownership of land 
C) Freedom of enterprise 
D) Worker freedom 
A) Government ownership of means of production 
B) Private ownership of land 
C) Freedom of enterprise 
D) Worker freedom

Question 18

Which group has ultimate control over the U.S. economy?

Accepted Answer

A) Business 
B) Households 
C) Multinationals 
D) Government 
A) Business 
B) Households 
C) Multinationals 
D) Government

Question 19

Government is on the:

Accepted Answer

A) supply side of factor markets and the demand side of goods markets. 
B) demand side of factor markets and the supply side of goods markets. 
C) supply side of both factor markets and goods markets. 
D) demand side of both factor markets and goods markets. 
A) supply side of factor markets and the demand side of goods markets. 
B) demand side of factor markets and the supply side of goods markets. 
C) supply side of both factor markets and goods markets. 
D) demand side of both factor markets and goods markets.

Question 20

Adam Smith advocated laissez-faire because he believed it was in the interest of:

Accepted Answer

A) capitalists, whom he regarded as the most dynamic and progressive element in society. 
B) the proletariat, who would receive higher wages. 
C) the government, which would profit from higher taxes. 
D) society as a whole. 
A) capitalists, whom he regarded as the most dynamic and progressive element in society. 
B) the proletariat, who would receive higher wages. 
C) the government, which would profit from higher taxes. 
D) society as a whole.

Exam 3: Economic Institutions

In practice, distribution under socialism is primarily determined by:

Through most of the 20th century in the former USSR:

Assuming government's goal is to benefit society as much as possible:

Membership in the Group of Seven consists of both developed and developing countries.

Since the late 1980s:

A firm's profits equal $100 if

Define a market economy.

Households are on the:

Certificates of ownership of a company are called:

Which of the following was one of Marx's predictions?

Flu vaccinations of school children have the unintended effect of protecting the vulnerable elderly from contracting the virus. This is an example of a:

Which of the following is an international financial institution concerned primarily with monetary issues and international financial arrangements?

If a firm's total revenue is $10,000 and its total costs are $9,000, then its profits are:

When Coca Cola introduced a new, low-calorie version of Coca Cola called C2, despite a major marketing effort, sales of C2 were weak and many doubted that the product would last. Coke's experience with C2 illustrates the economic concept of:

Capitalism:

The Industrial Revolution was important to the history of economic systems because it:

Which of the following is not a characteristic of pure capitalism?

Which group has ultimate control over the U.S. economy?

Government is on the:

Adam Smith advocated laissez-faire because he believed it was in the interest of:

Economics and Economic Reasoning

The Production Possibility Model, Trade, and Globalization

Supply and Demand

Using Supply and Demand

Describing Supply and Demand: Elasticities

Taxation and Government Intervention

Market Failure Versus Government Failure

Comparative Advantage, Exchange Rates, and Globalization

International Trade Policy

Production and Cost Analysis I

Production and Cost Analysis II

Perfect Competition

Monopoly and Monopolistic Competition

Oligopoly and Antitrust Policy

Real-World Competition and Technology

Work and the Labor Market

Who Gets What the Distribution of Income

The Logic of Individual Choice: the Foundation of Supply and Demand

Game Theory, Strategic Decision Making, and Behavioral Economics

Thinking Like a Modern Economist

Behavioral Economics and Modern Economic Policy

Microeconomic Policy, Economic Reasoning, and Beyond

Economic Growth, Business Cycles, and Unemployment

Measuring and Describing the Aggregate Economy

The Keynesian Short-Run Policy Model: Demand-Side Policies

The Classical Long-Run Policy Model: Growth and Supply-Side Policies

The Financial Sector and the Economy

Monetary Policy

Financial Crises, Panics, and Unconventional Monetary Policy

Deficits and Debt: the Austerity Debate

The Fiscal Policy Dilemma

Jobs and Unemployment

Inflation, Deflation, and Macro Policy

International Financial Policy

Macro Policy in a Global Setting

Structural Stagnation and Globalization

Macro Policy in Developing Countries

Filters

Through most of the 20^th century in the former USSR: