Question 1

Which of the following is a disadvantage of a corporation compared to a sole proprietorship?

Accepted Answer

A) Limited liability 
B) Difficulty raising start-up money 
C) Lack of profitability 
D) Double taxation of corporate income 
E) Vulnerability in the case of the death of an owner 
A) Limited liability 
B) Difficulty raising start-up money 
C) Lack of profitability 
D) Double taxation of corporate income 
E) Vulnerability in the case of the death of an owner

Question 2

Which form of business organization is the most common in the United States?

Accepted Answer

A) Sole proprietorship 
B) Partnership 
C) Corporation 
D) Nonprofit organization 
E) S corporation 
A) Sole proprietorship 
B) Partnership 
C) Corporation 
D) Nonprofit organization 
E) S corporation

Question 3

Which of the following is true of import tariffs and quotas?

Accepted Answer

A) They benefit domestic producers. 
B) Domestic consumers gain because they purchase the output of domestic firms. 
C) Specialization and comparative advantage are advanced by tariffs and quotas. 
D) They tend to expand the volume of world trade. 
E) Because they increase the output levels of domestic firms,they tend to lower domestic prices. 
A) They benefit domestic producers. 
B) Domestic consumers gain because they purchase the output of domestic firms. 
C) Specialization and comparative advantage are advanced by tariffs and quotas. 
D) They tend to expand the volume of world trade. 
E) Because they increase the output levels of domestic firms,they tend to lower domestic prices.

Question 4

If one dollar is initially equal in value to one euro and demand for euros increases,then each dollar will be worth:

Accepted Answer

A) more than one euro and European imports will be cheaper in the United States. 
B) less than one euro and European imports will be more expensive in the United States. 
C) more than one euro and European imports will be more expensive in the United States. 
D) less than one euro and European imports will be cheaper in the United States. 
E) the same as the euro and there will be no change in the values of imports or exports. 
A) more than one euro and European imports will be cheaper in the United States. 
B) less than one euro and European imports will be more expensive in the United States. 
C) more than one euro and European imports will be more expensive in the United States. 
D) less than one euro and European imports will be cheaper in the United States. 
E) the same as the euro and there will be no change in the values of imports or exports.

Question 5

The corporate form of business organization:

Accepted Answer

A) is chosen by more firms than any other form of organization in the United States. 
B) gives firm owners limited liability. 
C) generates less than half of the output in the U.S.economy. 
D) combines the limited liability of the partnership with the personal control of the sole proprietorship. 
E) is the least complex form of business organization. 
A) is chosen by more firms than any other form of organization in the United States. 
B) gives firm owners limited liability. 
C) generates less than half of the output in the U.S.economy. 
D) combines the limited liability of the partnership with the personal control of the sole proprietorship. 
E) is the least complex form of business organization.

Question 6

The excise tax on gasoline is based on the ability-to-pay principle of taxation.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is the best example of a public good?

Accepted Answer

A) Food stamps 
B) Police services 
C) Trash removal 
D) A restaurant meal 
E) An iPad 
A) Food stamps 
B) Police services 
C) Trash removal 
D) A restaurant meal 
E) An iPad

Question 8

Katie had a before-tax income of $40,000 and paid taxes of $6,000.Rinji had a before-tax income of $35,000 and paid taxes of $5,250.Based on this information,the tax system is:

Accepted Answer

A) regressive for all income levels. 
B) proportional. 
C) progressive. 
D) based on the ability-to-pay principle. 
E) regressive for income levels between $35,000 and $40,000. 
A) regressive for all income levels. 
B) proportional. 
C) progressive. 
D) based on the ability-to-pay principle. 
E) regressive for income levels between $35,000 and $40,000.

Question 9

Which resource generates the largest share of household income in the United States?

Accepted Answer

A) Labor 
B) Land 
C) Capital 
D) Entrepreneurial ability 
E) Money 
A) Labor 
B) Land 
C) Capital 
D) Entrepreneurial ability 
E) Money

Question 10

A public good is available to all regardless of who pays for it and who does not.

Accepted Answer

A) True 
 B)False

Question 11

Which form of business organization accounts for the largest proportion of business sales in the United States?

Accepted Answer

A) Sole proprietorship 
B) Partnership 
C) Corporation 
D) Nonprofit organization 
E) Conglomerate 
A) Sole proprietorship 
B) Partnership 
C) Corporation 
D) Nonprofit organization 
E) Conglomerate

Question 12

Which of the following lists the three types of firms in the United States from smallest to largest in terms of volume of sales?

Accepted Answer

A) Partnerships,sole proprietorships,corporations 
B) Sole proprietorships,partnerships,corporations 
C) Sole proprietorships,corporations,partnerships 
D) Corporations,partnerships,sole proprietorships 
E) Partnerships,corporations,sole proprietorships 
A) Partnerships,sole proprietorships,corporations 
B) Sole proprietorships,partnerships,corporations 
C) Sole proprietorships,corporations,partnerships 
D) Corporations,partnerships,sole proprietorships 
E) Partnerships,corporations,sole proprietorships

Question 13

An external benefit is a benefit from an activity that falls on a third party which is not involved in the activity.

Accepted Answer

A) True 
 B)False

Question 14

Consider a system in which a person earning $10,000 pays $1,000 in taxes,a person earning $25,000 pays $2,000,and someone earning $60,000 pays $4,000.This is an example of:

Accepted Answer

A) progressive taxation. 
B) proportional taxation. 
C) regressive taxation. 
D) a property tax. 
E) a tax based on the benefits-principle of taxation. 
A) progressive taxation. 
B) proportional taxation. 
C) regressive taxation. 
D) a property tax. 
E) a tax based on the benefits-principle of taxation.

Question 15

The table below shows taxes paid for various incomes.According to the information in the table below,the tax system is:
?
Table3.3
?
?
$$\begin{array} { | l | r | r | r | r | } 
\hline \text { Taxable income } & \$ 1,000 & \$ 3,000 & \$ 9,000 & \$ 27,000 \
\hline \text { Taxes } & \$ 100 & \$ 200 & \$ 400 & \$ 800 \
\hline
\end{array}$$

Accepted Answer

A) progressive through all levels of income. 
B) proportional throughout all levels of income. 
C) regressive throughout all levels of income. 
D) based on the benefits-received principle. 
E) proportional only between income levels $1,000 and $3,000. 
A) progressive through all levels of income. 
B) proportional throughout all levels of income. 
C) regressive throughout all levels of income. 
D) based on the benefits-received principle. 
E) proportional only between income levels $1,000 and $3,000.

Question 16

A public good is one that is supplied to:

Accepted Answer

A) only people who pay for it. 
B) only people who do not pay for it. 
C) all people,regardless of whether they pay for it or not. 
D) the government by private firms. 
E) foreign governments by our federal government. 
A) only people who pay for it. 
B) only people who do not pay for it. 
C) all people,regardless of whether they pay for it or not. 
D) the government by private firms. 
E) foreign governments by our federal government.

Question 17

Sole proprietorships produce more goods and services than does any other form of business organization.

Accepted Answer

A) True 
 B)False

Question 18

In recent years,redistribution has been the fastest growing category of federal government outlays.

Accepted Answer

A) True 
 B)False

Question 19

Stockholders share in the profits of a corporation:

Accepted Answer

A) in proportion to their years of stock ownership. 
B) in proportion to their ownership of stock. 
C) equally regardless of number of shares owned. 
D) only if they participate in management decisions. 
E) only if they attend stockholders' meetings. 
A) in proportion to their years of stock ownership. 
B) in proportion to their ownership of stock. 
C) equally regardless of number of shares owned. 
D) only if they participate in management decisions. 
E) only if they attend stockholders' meetings.

Question 20

Natural monopolies occur when:

Accepted Answer

A) government antitrust laws are too weak or not enforced. 
B) negative externalities are present. 
C) firms collude to set prices and divide the market among themselves. 
D) one firm can service the market more cheaply than two or more firms can. 
E) a public good is produced by a private firm. 
A) government antitrust laws are too weak or not enforced. 
B) negative externalities are present. 
C) firms collude to set prices and divide the market among themselves. 
D) one firm can service the market more cheaply than two or more firms can. 
E) a public good is produced by a private firm.

Which of the following is a disadvantage of a corporation compared to a sole proprietorship?

Which form of business organization is the most common in the United States?

Which of the following is true of import tariffs and quotas?

If one dollar is initially equal in value to one euro and demand for euros increases,then each dollar will be worth:

The corporate form of business organization:

The excise tax on gasoline is based on the ability-to-pay principle of taxation.

Which of the following is the best example of a public good?

Katie had a before-tax income of $40,000 and paid taxes of $6,000.Rinji had a before-tax income of $35,000 and paid taxes of $5,250.Based on this information,the tax system is:

Which resource generates the largest share of household income in the United States?

A public good is available to all regardless of who pays for it and who does not.

Which form of business organization accounts for the largest proportion of business sales in the United States?

Which of the following lists the three types of firms in the United States from smallest to largest in terms of volume of sales?

An external benefit is a benefit from an activity that falls on a third party which is not involved in the activity.

Consider a system in which a person earning $10,000 pays $1,000 in taxes,a person earning $25,000 pays $2,000,and someone earning $60,000 pays $4,000.This is an example of:

The table below shows taxes paid for various incomes.According to the information in the table below,the tax system is: ? Table3.3 ? ? Taxable income \ 1,000 \ 3,000 \ 9,000 \ 27,000 Taxes \ 100 \ 200 \ 400 \ 800

A public good is one that is supplied to:

Sole proprietorships produce more goods and services than does any other form of business organization.

In recent years,redistribution has been the fastest growing category of federal government outlays.

Stockholders share in the profits of a corporation:

Natural monopolies occur when:

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the U S Economy

Unemployment and Inflation

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

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Exam 3: Economic Decision Makers

Which of the following is a disadvantage of a corporation compared to a sole proprietorship?

Which form of business organization is the most common in the United States?

Which of the following is true of import tariffs and quotas?

If one dollar is initially equal in value to one euro and demand for euros increases,then each dollar will be worth:

The corporate form of business organization:

The excise tax on gasoline is based on the ability-to-pay principle of taxation.

Which of the following is the best example of a public good?

Katie had a before-tax income of $40,000 and paid taxes of $6,000.Rinji had a before-tax income of $35,000 and paid taxes of $5,250.Based on this information,the tax system is:

Which resource generates the largest share of household income in the United States?

A public good is available to all regardless of who pays for it and who does not.

Which form of business organization accounts for the largest proportion of business sales in the United States?

Which of the following lists the three types of firms in the United States from smallest to largest in terms of volume of sales?

An external benefit is a benefit from an activity that falls on a third party which is not involved in the activity.

Consider a system in which a person earning $10,000 pays $1,000 in taxes,a person earning $25,000 pays $2,000,and someone earning $60,000 pays $4,000.This is an example of:

The table below shows taxes paid for various incomes.According to the information in the table below,the tax system is: ? Table3.3 ? ? Taxable income \ 1,000 \ 3,000 \ 9,000 \ 27,000 Taxes \ 100 \ 200 \ 400 \ 800

A public good is one that is supplied to:

Sole proprietorships produce more goods and services than does any other form of business organization.

In recent years,redistribution has been the fastest growing category of federal government outlays.

Stockholders share in the profits of a corporation:

Natural monopolies occur when:

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the U S Economy

Unemployment and Inflation

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters