Question 1

The most common form of business organization in the United States is the partnership.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is not a government transfer program?

Accepted Answer

A) Unemployment compensation 
B) Social Security 
C) Food stamps 
D) Medicare 
E) Income taxes 
A) Unemployment compensation 
B) Social Security 
C) Food stamps 
D) Medicare 
E) Income taxes

Question 3

Which of the following would not be considered a role of government?

Accepted Answer

A) Promoting competition 
B) Providing public goods 
C) Providing externalities 
D) Regulating natural monopolies 
E) Safeguarding private property and enforcing contracts 
A) Promoting competition 
B) Providing public goods 
C) Providing externalities 
D) Regulating natural monopolies 
E) Safeguarding private property and enforcing contracts

Question 4

Which category includes the largest number of firms?

Accepted Answer

A) Sole proprietorship 
B) Partnership 
C) Corporation 
D) S corporation 
E) Limited partnerships 
A) Sole proprietorship 
B) Partnership 
C) Corporation 
D) S corporation 
E) Limited partnerships

Question 5

If left to market forces,activities that produce external benefits will be overproduced.

Accepted Answer

A) True 
 B)False

Question 6

Personal income in the United States is primarily determined by selling labor services.

Accepted Answer

A) True 
 B)False

Question 7

The partnership is the least common form of business organization in the United States.

Accepted Answer

A) True 
 B)False

Question 8

Public goods are both rival and nonexclusive.

Accepted Answer

A) True 
 B)False

Question 9

Luigi owns and operates a small restaurant.The income he receives from the restaurant is classified as:

Accepted Answer

A) saving. 
B) proprietor's income. 
C) wages and salaries. 
D) rental income. 
E) dividends. 
A) saving. 
B) proprietor's income. 
C) wages and salaries. 
D) rental income. 
E) dividends.

Question 10

Which form of business organization is the least common 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 11

What is the rationale for government provision of education?

Accepted Answer

A) Not all incomes are equal,but everyone has the right to education regardless of wealth. 
B) Potential students consider only their personal benefits gained from education,but the rest of society benefits,too. 
C) No education would be provided in the absence of government provision because everyone would consume it without paying. 
D) The cost of providing education for the entire public is too large. 
E) The government can provide education at a much lower cost than the private sector. 
A) Not all incomes are equal,but everyone has the right to education regardless of wealth. 
B) Potential students consider only their personal benefits gained from education,but the rest of society benefits,too. 
C) No education would be provided in the absence of government provision because everyone would consume it without paying. 
D) The cost of providing education for the entire public is too large. 
E) The government can provide education at a much lower cost than the private sector.

Question 12

Which of the following is not primarily a function of the federal government?

Accepted Answer

A) National security 
B) Higher education 
C) Economic stability 
D) Market competition 
E) Dealing with externalities 
A) National security 
B) Higher education 
C) Economic stability 
D) Market competition 
E) Dealing with externalities

Question 13

The table below shows tax payments made for various incomes.According to the information in the table below,the tax system is:
?
Table 3.2
?
?
$$\begin{array} { | l | r | r | r | } 
\hline \text { Taxable income } & \$ 5,000 & \$ 10,000 & \$ 20,000 \
\hline \text { Tax payments } & \$ 500 & \$ 900 & \$ 1,600 \
\hline
\end{array}$$

Accepted Answer

A) progressive at all levels of income. 
B) proportional. 
C) regressive. 
D) based on the benefits received. 
E) proportional between $5,000 and $10,000. 
A) progressive at all levels of income. 
B) proportional. 
C) regressive. 
D) based on the benefits received. 
E) proportional between $5,000 and $10,000.

Question 14

Some people have argued that government should provide only those goods that we would truly define as public goods.If so,which of the following should government provide?

Accepted Answer

A) National defense 
B) Daycare centers for children of working mothers 
C) Mail delivery 
D) Unemployment benefits 
E) Subsidies for agricultural products 
A) National defense 
B) Daycare centers for children of working mothers 
C) Mail delivery 
D) Unemployment benefits 
E) Subsidies for agricultural products

Question 15

Caleb teaches economics at Happy State University and is paid $50,000 per year.He also provides economic forecasts for local businesses for which he charges $100 per hour.Which of the following is true?

Accepted Answer

A) All of Caleb's income is salary. 
B) Some of Caleb's income is salary and some is personal interest 
C) All of Caleb's income is proprietor's income. 
D) Some of Caleb's income is salary and some is proprietor's income. 
E) All of Caleb's income is personal interest. 
A) All of Caleb's income is salary. 
B) Some of Caleb's income is salary and some is personal interest 
C) All of Caleb's income is proprietor's income. 
D) Some of Caleb's income is salary and some is proprietor's income. 
E) All of Caleb's income is personal interest.

Question 16

Which of the following is not a goal of government programs?

Accepted Answer

A) To enforce private property rights 
B) To prohibit natural monopolies 
C) To reduce pollution 
D) To transfer money from higher-income households to the poorest households 
E) To maintain price stability 
A) To enforce private property rights 
B) To prohibit natural monopolies 
C) To reduce pollution 
D) To transfer money from higher-income households to the poorest households 
E) To maintain price stability

Question 17

You are more likely to hire your teenage child than a landscaping firm to mow your lawn:

Accepted Answer

A) since the teenager is paid more than the landscaping firm. 
B) if the teenager has a lower opportunity cost of mowing the lawn than the landscaping firm does. 
C) because the teenager is less likely to have the specialized tools necessary to complete the job quickly. 
D) due to the bounded rationality of the diversified landscaping firm. 
E) when it does not take a substantial amount of time and effort to find a reputed landscaping firm to do the job. 
A) since the teenager is paid more than the landscaping firm. 
B) if the teenager has a lower opportunity cost of mowing the lawn than the landscaping firm does. 
C) because the teenager is less likely to have the specialized tools necessary to complete the job quickly. 
D) due to the bounded rationality of the diversified landscaping firm. 
E) when it does not take a substantial amount of time and effort to find a reputed landscaping firm to do the job.

Question 18

Two important roles of government in the economy are to safeguard private property and enforce contracts.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following taxes is based on the ability-to-pay principle?

Accepted Answer

A) Toll on a bridge 
B) Income taxes 
C) Gasoline excise taxes 
D) Property taxes 
E) User fees that collect the same amount from each person 
A) Toll on a bridge 
B) Income taxes 
C) Gasoline excise taxes 
D) Property taxes 
E) User fees that collect the same amount from each person

Question 20

A group of farmers in southwestern Pennsylvania bought a pesticide-free pasture.They sold their locally raised organic beef in the butcher shop they owned together.This group of farmers would be identified as a(n):

Accepted Answer

A) not-for-profit organization. 
B) S corporation. 
C) producer cooperative. 
D) sole proprietorship. 
E) cottage industry. 
A) not-for-profit organization. 
B) S corporation. 
C) producer cooperative. 
D) sole proprietorship. 
E) cottage industry.

The most common form of business organization in the United States is the partnership.

Which of the following is not a government transfer program?

Which of the following would not be considered a role of government?

Which category includes the largest number of firms?

If left to market forces,activities that produce external benefits will be overproduced.

Personal income in the United States is primarily determined by selling labor services.

The partnership is the least common form of business organization in the United States.

Public goods are both rival and nonexclusive.

Luigi owns and operates a small restaurant.The income he receives from the restaurant is classified as:

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

What is the rationale for government provision of education?

Which of the following is not primarily a function of the federal government?

The table below shows tax payments made for various incomes.According to the information in the table below,the tax system is: ? Table 3.2 ? ? Taxable income \ 5,000 \ 10,000 \ 20,000 Tax payments \ 500 \ 900 \ 1,600

Some people have argued that government should provide only those goods that we would truly define as public goods.If so,which of the following should government provide?

Caleb teaches economics at Happy State University and is paid $50,000 per year.He also provides economic forecasts for local businesses for which he charges $100 per hour.Which of the following is true?

Which of the following is not a goal of government programs?

You are more likely to hire your teenage child than a landscaping firm to mow your lawn:

Two important roles of government in the economy are to safeguard private property and enforce contracts.

Which of the following taxes is based on the ability-to-pay principle?

A group of farmers in southwestern Pennsylvania bought a pesticide-free pasture.They sold their locally raised organic beef in the butcher shop they owned together.This group of farmers would be identified as a(n):

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

Exam 3: Economic Decision Makers

The most common form of business organization in the United States is the partnership.

Which of the following is not a government transfer program?

Which of the following would not be considered a role of government?

Which category includes the largest number of firms?

If left to market forces,activities that produce external benefits will be overproduced.

Personal income in the United States is primarily determined by selling labor services.

The partnership is the least common form of business organization in the United States.

Public goods are both rival and nonexclusive.

Luigi owns and operates a small restaurant.The income he receives from the restaurant is classified as:

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

What is the rationale for government provision of education?

Which of the following is not primarily a function of the federal government?

The table below shows tax payments made for various incomes.According to the information in the table below,the tax system is: ? Table 3.2 ? ? Taxable income \ 5,000 \ 10,000 \ 20,000 Tax payments \ 500 \ 900 \ 1,600

Some people have argued that government should provide only those goods that we would truly define as public goods.If so,which of the following should government provide?

Caleb teaches economics at Happy State University and is paid $50,000 per year.He also provides economic forecasts for local businesses for which he charges $100 per hour.Which of the following is true?

Which of the following is not a goal of government programs?

You are more likely to hire your teenage child than a landscaping firm to mow your lawn:

Two important roles of government in the economy are to safeguard private property and enforce contracts.

Which of the following taxes is based on the ability-to-pay principle?

A group of farmers in southwestern Pennsylvania bought a pesticide-free pasture.They sold their locally raised organic beef in the butcher shop they owned together.This group of farmers would be identified as a(n):

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