Question 1

Feudalism and mercantilism relied on markets to solve the three main coordination problems.

Accepted Answer

A) True 
 B)False

Question 2

Entrepreneurship is defined as the ability to:

Accepted Answer

A) organize and get something done. 
B) raise investment capital. 
C) earn above-average profits. 
D) minimize production costs. 
A) organize and get something done. 
B) raise investment capital. 
C) earn above-average profits. 
D) minimize production costs.

Question 3

Briefly explain how the U.S.economic system has evolved from the early 1900s to today.

Accepted Answer

Evolving social customs,political forces

Question 4

The two economic groups competing for power during the transition from mercantilism to capitalism were:

Accepted Answer

A) craft guilds and industrialists. 
B) serfs and craft guilds. 
C) craft guilds and the lords of the manor. 
D) merchants and the lords of the manor. 
A) craft guilds and industrialists. 
B) serfs and craft guilds. 
C) craft guilds and the lords of the manor. 
D) merchants and the lords of the manor.

Question 5

Households supply factors of production to businesses and are paid by businesses for doing so. The market where this interaction takes place is called the factor market.

Accepted Answer

A) True 
 B)False

Question 6

Global corporations:

Accepted Answer

A) can provide many benefits to the countries in which they operate. 
B) are falling in importance in today's economy. 
C) have little interest in decreasing international tensions. 
D) suffer tax disadvantages that domestic corporations do not. 
A) can provide many benefits to the countries in which they operate. 
B) are falling in importance in today's economy. 
C) have little interest in decreasing international tensions. 
D) suffer tax disadvantages that domestic corporations do not.

Question 7

What are the six major roles that the government plays in the economy? Give an example of each.

Accepted Answer

The six major roles the government plays

Question 8

In 11th century Europe, the central economic decisions were made by:

Accepted Answer

A) the nation-state. 
B) tradition and the lord of the manor. 
C) the church. 
D) central governments. 
A) the nation-state. 
B) tradition and the lord of the manor. 
C) the church. 
D) central governments.

Question 9

Which of the following would most likely generate a positive externality?

Accepted Answer

A) Roller coaster rides 
B) Pollution 
C) Alcoholic beverages 
D) Education 
A) Roller coaster rides 
B) Pollution 
C) Alcoholic beverages 
D) Education

Question 10

The market where businesses sell goods and services to households and the government is called the:

Accepted Answer

A) goods market. 
B) factor market. 
C) capital market. 
D) money market. 
A) goods market. 
B) factor market. 
C) capital market. 
D) money market.

Question 11

Profit is:

Accepted Answer

A) the same as cost. 
B) the same as revenue. 
C) what is left over from total revenue after all of the appropriate costs have been subtracted. 
D) what is left over from total cost after all of the appropriate revenues have been subtracted. 
A) the same as cost. 
B) the same as revenue. 
C) what is left over from total revenue after all of the appropriate costs have been subtracted. 
D) what is left over from total cost after all of the appropriate revenues have been subtracted.

Question 12

The three primary forms of business are sole proprietorships,partnerships,and corporations.You are contemplating starting a business.For each of the following proposals,explain which of the three types of businesses would be most appropriate.In each case describe the advantages and disadvantages of your choice.
(a)You love drones and want to start a business creating drone pictures of people's houses and property.
(b)After a late night cram session,you and your roommate are in need of some pizza,but no restaurants are open.You decide to open an all night pizza parlor.
(c)You have an idea that will make you a billionaire before you graduate from college: a pizza delivery service - from any restaurant to any dorm.In order to make your revenue goal a reality,a local venture capital firm has informed you that you will need to nationally franchise your operation.

Accepted Answer

(a)Initially it makes sense to start as

Question 13

Briefly explain the difference between socialism and capitalism.

Accepted Answer

In theory,socialism is an economic syste

Question 14

In the United States, the government regulates business in its role as a "referee." Which of the following is not among the laws regulating the interaction between households and businesses?

Accepted Answer

A) Businesses must follow certain rules about workplace safety, minimum wages, and overtime rules. 
B) Businesses cannot meet with other businesses to agree on prices they will charge. 
C) In some businesses, in some states, employees must join a union in order to work at certain jobs. 
D) Businesses are required to produce certain goods, called public goods, for the government. 
A) Businesses must follow certain rules about workplace safety, minimum wages, and overtime rules. 
B) Businesses cannot meet with other businesses to agree on prices they will charge. 
C) In some businesses, in some states, employees must join a union in order to work at certain jobs. 
D) Businesses are required to produce certain goods, called public goods, for the government.

Question 15

Government regulation of working conditions is an example of government as:

Accepted Answer

A) a referee. 
B) an owner. 
C) an actor. 
D) a dictator. 
A) a referee. 
B) an owner. 
C) an actor. 
D) a dictator.

Question 16

The most important difference between domestic governments and international organizations is that:

Accepted Answer

A) international organizations are more effective since membership is voluntary. 
B) domestic governments are more effective since national self-interest is not constrained by international obligations. 
C) international organizations are less effective since they have no means of forcing members to comply. 
D) domestic governments are less effective because they are more concerned about international public opinion. 
A) international organizations are more effective since membership is voluntary. 
B) domestic governments are more effective since national self-interest is not constrained by international obligations. 
C) international organizations are less effective since they have no means of forcing members to comply. 
D) domestic governments are less effective because they are more concerned about international public opinion.

Question 17

New developments in computer monitors have made flat panel LCDs cheaper and better than the older CRT models. Given that monitors can contain as much as 8 pounds of lead, disposing of the old monitors creates a:

Accepted Answer

A) negative externality. 
B) positive externality. 
C) neutral externality. 
D) limited liability. 
A) negative externality. 
B) positive externality. 
C) neutral externality. 
D) limited liability.

Question 18

A business is likely a sole proprietorship if:

Accepted Answer

A) it has two or more owners, with each owner liable for every other owner's actions. 
B) it has only one owner who has unlimited liability. 
C) it is legally treated as a person and owned by stockholders who are liable for the actions of the corporate "person." 
D) multiple owners are liable only to the extent of their own investment. 
A) it has two or more owners, with each owner liable for every other owner's actions. 
B) it has only one owner who has unlimited liability. 
C) it is legally treated as a person and owned by stockholders who are liable for the actions of the corporate "person." 
D) multiple owners are liable only to the extent of their own investment.

Question 19

Socialists saw state socialism as:

Accepted Answer

A) the final stage of socialism. 
B) a preliminary state leading to capitalism. 
C) a transition stage to pure socialism. 
D) a state following pure socialism. 
A) the final stage of socialism. 
B) a preliminary state leading to capitalism. 
C) a transition stage to pure socialism. 
D) a state following pure socialism.

Question 20

McDonald's Corporation lost a battle to keep a Singapore firm, Future Enterprises, from selling goods under the labels MacNoodles, MacTea, and MacChocolate. In this case, the court system in Singapore was defining:

Accepted Answer

A) globalization. 
B) limited liability. 
C) consumer sovereignty. 
D) property rights. 
A) globalization. 
B) limited liability. 
C) consumer sovereignty. 
D) property rights.

Exam 3: Economic Institutions

Feudalism and mercantilism relied on markets to solve the three main coordination problems.

Entrepreneurship is defined as the ability to:

Briefly explain how the U.S.economic system has evolved from the early 1900s to today.

The two economic groups competing for power during the transition from mercantilism to capitalism were:

Households supply factors of production to businesses and are paid by businesses for doing so. The market where this interaction takes place is called the factor market.

Global corporations:

What are the six major roles that the government plays in the economy? Give an example of each.

In 11th century Europe, the central economic decisions were made by:

Which of the following would most likely generate a positive externality?

The market where businesses sell goods and services to households and the government is called the:

Profit is:

Briefly explain the difference between socialism and capitalism.

In the United States, the government regulates business in its role as a "referee." Which of the following is not among the laws regulating the interaction between households and businesses?

Government regulation of working conditions is an example of government as:

The most important difference between domestic governments and international organizations is that:

New developments in computer monitors have made flat panel LCDs cheaper and better than the older CRT models. Given that monitors can contain as much as 8 pounds of lead, disposing of the old monitors creates a:

A business is likely a sole proprietorship if:

Socialists saw state socialism as:

McDonald's Corporation lost a battle to keep a Singapore firm, Future Enterprises, from selling goods under the labels MacNoodles, MacTea, and MacChocolate. In this case, the court system in Singapore was defining:

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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