Question 1

An import quota taxes an import but does not set a limit on how much may be imported.

Accepted Answer

A) True 
 B)False

Question 2

A corporation is a legal entity owned by stockholders whose liability is limited to the value of their stock ownership.See 3-2: The Firm

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is true of public goods?

Accepted Answer

A) The market mechanism helps to signal the quantity that is demanded by the public. 
B) Payment for consumption is efficiently provided by market prices. 
C) Consumption by one person does not preclude consumption of the same good by another person. 
D) The public sector is guided to produce the correct quantity by market prices. 
E) Voluntary contributions will be sufficient to finance the production of public goods. 
A) The market mechanism helps to signal the quantity that is demanded by the public. 
B) Payment for consumption is efficiently provided by market prices. 
C) Consumption by one person does not preclude consumption of the same good by another person. 
D) The public sector is guided to produce the correct quantity by market prices. 
E) Voluntary contributions will be sufficient to finance the production of public goods.

Question 4

Roxanne and Eileen live in an apartment building with a laundry room in the basement.Roxanne does her laundry at home,spending $4 and 5 hours per week.Eileen sends her laundry out,spending $20 and 15 minutes per week transporting the laundry.On the basis of the information given,which one of the following must be true?

Accepted Answer

A) Roxanne earns more labor income than Eileen. 
B) Eileen earns more total income than Roxanne. 
C) Eileen enjoys doing laundry;Roxanne does not. 
D) Eileen has less laundry than Roxanne. 
E) Eileen and Roxanne attach different utilities to time spent doing laundry. 
A) Roxanne earns more labor income than Eileen. 
B) Eileen earns more total income than Roxanne. 
C) Eileen enjoys doing laundry;Roxanne does not. 
D) Eileen has less laundry than Roxanne. 
E) Eileen and Roxanne attach different utilities to time spent doing laundry.

Question 5

Which of the following is not a function of government?

Accepted Answer

A) Promotion of competition 
B) Stabilization to achieve the macroeconomic goals 
C) Redistribution of income through taxation and transfer payments 
D) Production of public goods 
E) Providing the economy's private goods 
A) Promotion of competition 
B) Stabilization to achieve the macroeconomic goals 
C) Redistribution of income through taxation and transfer payments 
D) Production of public goods 
E) Providing the economy's private goods

Question 6

Which of the following includes the four basic resources supplied by households?

Accepted Answer

A) Natural resources,labor,intelligence,capital 
B) Money,labor,natural resources,entrepreneurial ability 
C) Intellectual ability,physical ability,money,natural resources 
D) Labor,capital,intelligence,entrepreneurial ability 
E) Labor,natural resources,entrepreneurial ability,capital 
A) Natural resources,labor,intelligence,capital 
B) Money,labor,natural resources,entrepreneurial ability 
C) Intellectual ability,physical ability,money,natural resources 
D) Labor,capital,intelligence,entrepreneurial ability 
E) Labor,natural resources,entrepreneurial ability,capital

Question 7

Household production is more likely to occur when:

Accepted Answer

A) it requires many specialized resources. 
B) technology makes it more costly than market production. 
C) tax avoidance is undesirable. 
D) more control over the final product is desirable. 
E) it has a very high opportunity cost. 
A) it requires many specialized resources. 
B) technology makes it more costly than market production. 
C) tax avoidance is undesirable. 
D) more control over the final product is desirable. 
E) it has a very high opportunity cost.

Question 8

A cottage industry is one that:

Accepted Answer

A) produces rural housing. 
B) takes advantage of the division of labor. 
C) uses highly specialized resources in a complex production process. 
D) produces cottage cheese. 
E) carries out production in workers' homes. 
A) produces rural housing. 
B) takes advantage of the division of labor. 
C) uses highly specialized resources in a complex production process. 
D) produces cottage cheese. 
E) carries out production in workers' homes.

Question 9

It is difficult to exclude individuals from the use of public goods and services.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is true about a sole proprietorship in the United States?

Accepted Answer

A) It is the most common form of business organization. 
B) It is responsible for a large portion of the total production of goods and services. 
C) It offers the owner the least personal liability of any form of business organization. 
D) There is no opportunity cost to operating the business. 
E) Only one individual can work in such a firm. 
A) It is the most common form of business organization. 
B) It is responsible for a large portion of the total production of goods and services. 
C) It offers the owner the least personal liability of any form of business organization. 
D) There is no opportunity cost to operating the business. 
E) Only one individual can work in such a firm.

Question 11

Which of the following is one of the chief reasons for the increased number of married women in the U.S.workforce?

Accepted Answer

A) The marginal cost of working in the labor force has increased. 
B) Jobs provide greater independence and self-worth. 
C) The opportunity cost of household work has increased. 
D) The sunk cost of household appliances has risen to the point where women must work to make payments on them. 
E) Women spend more time shopping as a result of the increasing division of labor in household production. 
A) The marginal cost of working in the labor force has increased. 
B) Jobs provide greater independence and self-worth. 
C) The opportunity cost of household work has increased. 
D) The sunk cost of household appliances has risen to the point where women must work to make payments on them. 
E) Women spend more time shopping as a result of the increasing division of labor in household production.

Question 12

Import restrictions usually benefit domestic producers at the expense of domestic consumers.

Accepted Answer

A) True 
 B)False

Question 13

Despite specialization and comparative advantage,household production still exists because for some households:

Accepted Answer

A) the opportunity cost of production at home is greater than the cost of purchasing the good in the market. 
B) production at home is less costly than purchasing the good in the market. 
C) the value of home production exceeds the sunk cost of home production. 
D) the value of home production is ignored. 
E) the expenditure on food and clothing represents a small portion of their total budget. 
A) the opportunity cost of production at home is greater than the cost of purchasing the good in the market. 
B) production at home is less costly than purchasing the good in the market. 
C) the value of home production exceeds the sunk cost of home production. 
D) the value of home production is ignored. 
E) the expenditure on food and clothing represents a small portion of their total budget.

Question 14

The incidence of a tax refers to:

Accepted Answer

A) who receives the benefits from the revenue generated by the tax. 
B) the changes in the marginal tax rate as income increases. 
C) whether the tax is regressive,proportional,or progressive. 
D) who bears the burden of the tax. 
E) whether the tax is based on the ability-to-pay principle. 
A) who receives the benefits from the revenue generated by the tax. 
B) the changes in the marginal tax rate as income increases. 
C) whether the tax is regressive,proportional,or progressive. 
D) who bears the burden of the tax. 
E) whether the tax is based on the ability-to-pay principle.

Question 15

Household income is spent on all of the following except one.Which is the exception?

Accepted Answer

A) Services 
B) Tax payments 
C) Durable goods 
D) Nondurable goods 
E) Dividends 
A) Services 
B) Tax payments 
C) Durable goods 
D) Nondurable goods 
E) Dividends

Question 16

One disadvantage of a sole proprietorship as a form of business organization is that:

Accepted Answer

A) sole proprietorships cannot lower the transaction costs associated with contracting with resource owners. 
B) sole proprietorships are less efficient than corporations,because they are less specialized in production. 
C) owners of sole proprietorships can lose all their personal assets if the business is sued or fails. 
D) owners of sole proprietorships generally find it difficult to negotiate separation agreements with the other partners in the firm. 
E) owners of sole proprietorships generally have very little control over how they operate their businesses. 
A) sole proprietorships cannot lower the transaction costs associated with contracting with resource owners. 
B) sole proprietorships are less efficient than corporations,because they are less specialized in production. 
C) owners of sole proprietorships can lose all their personal assets if the business is sued or fails. 
D) owners of sole proprietorships generally find it difficult to negotiate separation agreements with the other partners in the firm. 
E) owners of sole proprietorships generally have very little control over how they operate their businesses.

Question 17

International trade occurs because the opportunity cost of producing specific goods differs across:​

Accepted Answer

A) firms. 
B) individuals. 
C) regions of the U.S. 
D) countries. 
E) households. 
A) firms. 
B) individuals. 
C) regions of the U.S. 
D) countries. 
E) households.

Question 18

A realized capital gain is:

Accepted Answer

A) the difference between the price of a share of stock and what the investor paid for it (i.e.,the broker's fee). 
B) the difference between the original value of a piece of equipment and its depreciated value. 
C) an increase in the net worth of a sole proprietorship or partnership. 
D) an increase in the market value of a share of stock held by an individual. 
E) the difference between the selling price and the purchase price of a share of stock. 
A) the difference between the price of a share of stock and what the investor paid for it (i.e.,the broker's fee). 
B) the difference between the original value of a piece of equipment and its depreciated value. 
C) an increase in the net worth of a sole proprietorship or partnership. 
D) an increase in the market value of a share of stock held by an individual. 
E) the difference between the selling price and the purchase price of a share of stock.

Question 19

Which of the following is a defining characteristic of a public good?

Accepted Answer

A) It is produced and distributed by the government. 
B) The decision to produce it is made by the public through a voting process. 
C) It is produced and distributed by private firms according to government regulations. 
D) It is freely available to everyone once it is produced. 
E) It is purchased by one government agency from another government agency. 
A) It is produced and distributed by the government. 
B) The decision to produce it is made by the public through a voting process. 
C) It is produced and distributed by private firms according to government regulations. 
D) It is freely available to everyone once it is produced. 
E) It is purchased by one government agency from another government agency.

Question 20

The Salvation Army is an example of a(n):

Accepted Answer

A) military organization. 
B) not-for-profit organization. 
C) partnership. 
D) S corporation. 
E) U.S.government agency. 
A) military organization. 
B) not-for-profit organization. 
C) partnership. 
D) S corporation. 
E) U.S.government agency.

An import quota taxes an import but does not set a limit on how much may be imported.

A corporation is a legal entity owned by stockholders whose liability is limited to the value of their stock ownership.See 3-2: The Firm

Which of the following is true of public goods?

Which of the following is not a function of government?

Which of the following includes the four basic resources supplied by households?

Household production is more likely to occur when:

A cottage industry is one that:

It is difficult to exclude individuals from the use of public goods and services.

Which of the following is true about a sole proprietorship in the United States?

Which of the following is one of the chief reasons for the increased number of married women in the U.S.workforce?

Import restrictions usually benefit domestic producers at the expense of domestic consumers.

Despite specialization and comparative advantage,household production still exists because for some households:

The incidence of a tax refers to:

Household income is spent on all of the following except one.Which is the exception?

One disadvantage of a sole proprietorship as a form of business organization is that:

International trade occurs because the opportunity cost of producing specific goods differs across:

A realized capital gain is:

Which of the following is a defining characteristic of a public good?

The Salvation Army is an example of 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

An import quota taxes an import but does not set a limit on how much may be imported.

A corporation is a legal entity owned by stockholders whose liability is limited to the value of their stock ownership.See 3-2: The Firm

Which of the following is true of public goods?

Which of the following is not a function of government?

Which of the following includes the four basic resources supplied by households?

Household production is more likely to occur when:

A cottage industry is one that:

It is difficult to exclude individuals from the use of public goods and services.

Which of the following is true about a sole proprietorship in the United States?

Which of the following is one of the chief reasons for the increased number of married women in the U.S.workforce?

Import restrictions usually benefit domestic producers at the expense of domestic consumers.

Despite specialization and comparative advantage,household production still exists because for some households:

The incidence of a tax refers to:

Household income is spent on all of the following except one.Which is the exception?

One disadvantage of a sole proprietorship as a form of business organization is that:

International trade occurs because the opportunity cost of producing specific goods differs across:​

A realized capital gain is:

Which of the following is a defining characteristic of a public good?

The Salvation Army is an example of 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

International trade occurs because the opportunity cost of producing specific goods differs across: