Question 1

Welfare capitalism is an economic system in which:

Accepted Answer

A) markets operate without government regulation. 
B) government owns all of the means of production. 
C) markets operate, but government regulates markets significantly. 
D) laissez-faire operates unimpeded. 
A) markets operate without government regulation. 
B) government owns all of the means of production. 
C) markets operate, but government regulates markets significantly. 
D) laissez-faire operates unimpeded.

Question 2

One advantage of a sole proprietorship over a partnership is:

Accepted Answer

A) direct control by the owner. 
B) limited liability. 
C) the ability to share the work and risks of business. 
D) greater ease of obtaining financing. 
A) direct control by the owner. 
B) limited liability. 
C) the ability to share the work and risks of business. 
D) greater ease of obtaining financing.

Question 3

If a market economy is to succeed by relying on private property rights and market forces,there is an essential role for government to play in the economic system.What is it? And explain why it is essential.

Accepted Answer

Government must allocate and defend priv

Question 4

Socialism in theory is based on the principle that individuals should:

Accepted Answer

A) look out for their own interests and let the government look out for the public interest. 
B) rely on the government to meet their needs. 
C) cooperate with one another to meet their needs. 
D) compete with one another to meet their needs. 
A) look out for their own interests and let the government look out for the public interest. 
B) rely on the government to meet their needs. 
C) cooperate with one another to meet their needs. 
D) compete with one another to meet their needs.

Question 5

Which of the following is a characteristic of a market economy?

Accepted Answer

A) Private property 
B) Government ownership of the means of production 
C) Distribution according to need 
D) Tradition determines the what, how, and for whom decisions 
A) Private property 
B) Government ownership of the means of production 
C) Distribution according to need 
D) Tradition determines the what, how, and for whom decisions

Question 6

State and local governments do not receive income directly from which source?

Accepted Answer

A) Property taxes 
B) Sales taxes 
C) Social security taxes 
D) Local income taxes 
A) Property taxes 
B) Sales taxes 
C) Social security taxes 
D) Local income taxes

Question 7

One advantage of a sole proprietorship over a corporation is:

Accepted Answer

A) limited liability. 
B) the ability to share work and risks. 
C) ease of formation. 
D) greater ability to obtain funds. 
A) limited liability. 
B) the ability to share work and risks. 
C) ease of formation. 
D) greater ability to obtain funds.

Question 8

In the goods market:

Accepted Answer

A) households supply factors of production to businesses and are paid by businesses for doing so. 
B) households supply goods to businesses and are paid by businesses for doing so. 
C) businesses produce goods and services and sells them to households and government. 
D) government produces goods and services and supplies them to households and businesses. 
A) households supply factors of production to businesses and are paid by businesses for doing so. 
B) households supply goods to businesses and are paid by businesses for doing so. 
C) businesses produce goods and services and sells them to households and government. 
D) government produces goods and services and supplies them to households and businesses.

Question 9

A public good is a good that:

Accepted Answer

A) is owned by the public. 
B) when consumed by one individual, can still be consumed by others. 
C) when consumed by one individual, cannot be consumed by another. 
D) is available only to those people who help to pay for it. 
A) is owned by the public. 
B) when consumed by one individual, can still be consumed by others. 
C) when consumed by one individual, cannot be consumed by another. 
D) is available only to those people who help to pay for it.

Question 10

When the Sarbanes-Oxley Act that established new accounting rules was passed, analysts suggested that the new rules would not improve protections for the investing public, but it would result in more work for accountants. If the professors are right, these regulations are an example of:

Accepted Answer

A) laissez faire. 
B) demerit goods. 
C) government failure. 
D) comparative advantage. 
A) laissez faire. 
B) demerit goods. 
C) government failure. 
D) comparative advantage.

Question 11

Global corporations in general are:

Accepted Answer

A) more difficult to regulate than domestic corporations. 
B) as difficult to regulate as domestic corporations. 
C) less difficult to regulate than domestic corporations. 
D) beyond the scope of government regulation at any level. 
A) more difficult to regulate than domestic corporations. 
B) as difficult to regulate as domestic corporations. 
C) less difficult to regulate than domestic corporations. 
D) beyond the scope of government regulation at any level.

Question 12

The Marxist critique of capitalism was based on the notion that:

Accepted Answer

A) a capitalist system ignored traditional class roles. 
B) efficient allocation of resources was not a worthwhile goal. 
C) the proletariat class exploited the capitalist class, which created all the value inherent in goods. 
D) the capitalist class exploited the proletariat class, which created all the value inherent in goods. 
A) a capitalist system ignored traditional class roles. 
B) efficient allocation of resources was not a worthwhile goal. 
C) the proletariat class exploited the capitalist class, which created all the value inherent in goods. 
D) the capitalist class exploited the proletariat class, which created all the value inherent in goods.

Question 13

The tax revenues of federal, state, and local governments have different sources, in that the federal government relies primarily on:

Accepted Answer

A) income taxes; state and local governments rely to a greater extent on sales and property taxes. 
B) sales and property taxes; state and local governments rely to a greater extent on income taxes. 
C) excise and property taxes; state and local governments rely on sales taxes. 
D) sales taxes; state and local governments rely on excise and property taxes. 
A) income taxes; state and local governments rely to a greater extent on sales and property taxes. 
B) sales and property taxes; state and local governments rely to a greater extent on income taxes. 
C) excise and property taxes; state and local governments rely on sales taxes. 
D) sales taxes; state and local governments rely on excise and property taxes.

Question 14

Business decisions about what and how much to produce are based on what:

Accepted Answer

A) maximizes market share. 
B) consumers demand. 
C) the government wants. 
D) maximizes profits. 
A) maximizes market share. 
B) consumers demand. 
C) the government wants. 
D) maximizes profits.

Question 15

Businesses produce goods and services and sell them to households and governments. The market where this interaction takes place is called the goods market.

Accepted Answer

A) True 
 B)False

Question 16

What kind of externalities affects the levels of unemployment, inflation, or growth in the economy as a whole?

Accepted Answer

A) Positive 
B) Negative 
C) Macroeconomic 
D) Microeconomic 
A) Positive 
B) Negative 
C) Macroeconomic 
D) Microeconomic

Question 17

Which of the following organizations works with developing countries to secure low-interest loans that foster economic growth?

Accepted Answer

A) World Trade Organization 
B) World Bank 
C) Group of Five 
D) Group of Seven 
A) World Trade Organization 
B) World Bank 
C) Group of Five 
D) Group of Seven

Question 18

In principle, socialism is:

Accepted Answer

A) less concerned about fairness than capitalism. 
B) just as concerned about fairness as capitalism. 
C) more concerned about fairness than capitalism. 
D) not concerned about fairness at all. 
A) less concerned about fairness than capitalism. 
B) just as concerned about fairness as capitalism. 
C) more concerned about fairness than capitalism. 
D) not concerned about fairness at all.

Question 19

When there are market externalities, the market allocation of resources will be optimal.

Accepted Answer

A) True 
 B)False

Question 20

How does theoretical socialism differ from theoretical capitalism? How does it differ from socialism as it was practiced? Why are these terms no longer useful in describing today's economic systems?

Accepted Answer

Socialism,in theory,is an economic syste

Exam 3: Economic Institutions

Welfare capitalism is an economic system in which:

One advantage of a sole proprietorship over a partnership is:

If a market economy is to succeed by relying on private property rights and market forces,there is an essential role for government to play in the economic system.What is it? And explain why it is essential.

Socialism in theory is based on the principle that individuals should:

Which of the following is a characteristic of a market economy?

State and local governments do not receive income directly from which source?

One advantage of a sole proprietorship over a corporation is:

In the goods market:

A public good is a good that:

When the Sarbanes-Oxley Act that established new accounting rules was passed, analysts suggested that the new rules would not improve protections for the investing public, but it would result in more work for accountants. If the professors are right, these regulations are an example of:

Global corporations in general are:

The Marxist critique of capitalism was based on the notion that:

The tax revenues of federal, state, and local governments have different sources, in that the federal government relies primarily on:

Business decisions about what and how much to produce are based on what:

Businesses produce goods and services and sell them to households and governments. The market where this interaction takes place is called the goods market.

What kind of externalities affects the levels of unemployment, inflation, or growth in the economy as a whole?

Which of the following organizations works with developing countries to secure low-interest loans that foster economic growth?

In principle, socialism is:

When there are market externalities, the market allocation of resources will be optimal.

How does theoretical socialism differ from theoretical capitalism? How does it differ from socialism as it was practiced? Why are these terms no longer useful in describing today's economic systems?

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

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