Question 1

Household production is more likely to occur when:

Accepted Answer

A) it requires few specialized resources. 
B) technology makes it more costly than market production. 
C) tax avoidance is undesirable. 
D) less control over the final product is desirable. 
E) the opportunity cost of household production is high. 
A) it requires few specialized resources. 
B) technology makes it more costly than market production. 
C) tax avoidance is undesirable. 
D) less control over the final product is desirable. 
E) the opportunity cost of household production is high.

Question 2

The funds to pay for police protection are usually raised through taxation because:

Accepted Answer

A) police protection would be hard to provide exclusively to those who voluntarily pay for it. 
B) people would not voluntarily pay salaries to officials who might arrest them. 
C) police protection is a basic necessity. 
D) goods financed through taxation can be guaranteed to all who pay for it. 
E) the government believes that those who receive the benefits from the service should pay for it. 
A) police protection would be hard to provide exclusively to those who voluntarily pay for it. 
B) people would not voluntarily pay salaries to officials who might arrest them. 
C) police protection is a basic necessity. 
D) goods financed through taxation can be guaranteed to all who pay for it. 
E) the government believes that those who receive the benefits from the service should pay for it.

Question 3

One explanation for the increased participation of married women in the U.S.labor force is that:

Accepted Answer

A) fewer women are being trained for household work by the public school system. 
B) the rapid growth in the service sector has increased job opportunities for women. 
C) the cost of professional day care has increased. 
D) couples are having more children. 
E) husbands earn more today than they did previously. 
A) fewer women are being trained for household work by the public school system. 
B) the rapid growth in the service sector has increased job opportunities for women. 
C) the cost of professional day care has increased. 
D) couples are having more children. 
E) husbands earn more today than they did previously.

Question 4

The movement of households from rural to urban settings reduced the degree of specialization in household production.

Accepted Answer

A) True 
 B)False

Question 5

Trade restrictions result in all of the following except one.Which is the exception?

Accepted Answer

A) Higher prices 
B) Fewer choices 
C) Improved quality 
D) Misallocation of resources 
E) Reduced competition 
A) Higher prices 
B) Fewer choices 
C) Improved quality 
D) Misallocation of resources 
E) Reduced competition

Question 6

If one euro exchanges for $1.12,then buying a German car selling for 100,000 euros will cost:

Accepted Answer

A) $95,000 
B) $100,000 
C) $112,000 
D) $125,000 
E) $142,000 
A) $95,000 
B) $100,000 
C) $112,000 
D) $125,000 
E) $142,000

Question 7

When externalities are present,market prices do not reflect all the social costs or benefits of the activity.

Accepted Answer

A) True 
 B)False

Question 8

A tariff is:

Accepted Answer

A) a tax on imports. 
B) a legal limit on quantities of goods that can be imported. 
C) a voluntary limit on quantities of goods that can be imported. 
D) a quality restriction on imports. 
E) a subsidy for exports. 
A) a tax on imports. 
B) a legal limit on quantities of goods that can be imported. 
C) a voluntary limit on quantities of goods that can be imported. 
D) a quality restriction on imports. 
E) a subsidy for exports.

Question 9

An example of a positive externality is:

Accepted Answer

A) pollution because it affects people not directly involved with producing it. 
B) a homeowner's maintenance of a beautiful lawn because this creates a benefit for neighbors. 
C) monopoly creation. 
D) driving a car that emits pollution. 
E) cigarette smoking because this imposes an indirect cost on people around the smoker. 
A) pollution because it affects people not directly involved with producing it. 
B) a homeowner's maintenance of a beautiful lawn because this creates a benefit for neighbors. 
C) monopoly creation. 
D) driving a car that emits pollution. 
E) cigarette smoking because this imposes an indirect cost on people around the smoker.

Question 10

Brian is the sole proprietor of Long Voyage Software,which generates maps for wilderness trips.He started the business with an initial investment of $80,000.A faulty map caused one customer to get hopelessly lost.After her rescue and recuperation,she sued Long Voyage for $5,000,000.Which of the following is true?

Accepted Answer

A) The customer can be awarded only $80,000-what the firm has available to pay. 
B) The customer can be awarded $5,000,000 but can get only $80,000. 
C) The customer can be awarded $5,000,000,but Brian personally won't have to pay more than $80,000. 
D) If $5,000,000 is awarded,Brian will have to pay none of it. 
E) If $5,000,000 is awarded,Brian is personally responsible for paying all of it. 
A) The customer can be awarded only $80,000-what the firm has available to pay. 
B) The customer can be awarded $5,000,000 but can get only $80,000. 
C) The customer can be awarded $5,000,000,but Brian personally won't have to pay more than $80,000. 
D) If $5,000,000 is awarded,Brian will have to pay none of it. 
E) If $5,000,000 is awarded,Brian is personally responsible for paying all of it.

Question 11

Which of the following would not describe two-thirds of the for-profit businesses in the United States as measured by the sheer number of firms?

Accepted Answer

A) Small retail businesses 
B) Small service operations 
C) Part-time home-based businesses 
D) Small farms 
E) Multinational corporations 
A) Small retail businesses 
B) Small service operations 
C) Part-time home-based businesses 
D) Small farms 
E) Multinational corporations

Question 12

Which of the following is a reason why government is a participant in a market-oriented economy?

Accepted Answer

A) To enforce contracts and protect private property 
B) To promote collusion 
C) To promote the growth of natural monopolies 
D) To provide more inequality in the distribution of income 
E) To promote externalities 
A) To enforce contracts and protect private property 
B) To promote collusion 
C) To promote the growth of natural monopolies 
D) To provide more inequality in the distribution of income 
E) To promote externalities

Question 13

Which of the following is an example of a durable good?

Accepted Answer

A) Food cooked at home 
B) Food eaten at a restaurant 
C) High fashion clothing 
D) Binoculars 
E) Motor oil 
A) Food cooked at home 
B) Food eaten at a restaurant 
C) High fashion clothing 
D) Binoculars 
E) Motor oil

Question 14

The difference between fiscal policy and monetary policy is that:

Accepted Answer

A) fiscal policy is a macroeconomic policy but monetary policy is a microeconomic policy. 
B) monetary policy is a macroeconomic policy but fiscal policy is a microeconomic policy. 
C) fiscal policy involves regulation of natural monopolies but monetary policy involves the provision of public goods. 
D) monetary policy involves regulation of the money supply but fiscal policy involves government spending and taxing. 
E) fiscal policy involves the promotion of competition but monetary policy involves collecting money to pay for taxes. 
A) fiscal policy is a macroeconomic policy but monetary policy is a microeconomic policy. 
B) monetary policy is a macroeconomic policy but fiscal policy is a microeconomic policy. 
C) fiscal policy involves regulation of natural monopolies but monetary policy involves the provision of public goods. 
D) monetary policy involves regulation of the money supply but fiscal policy involves government spending and taxing. 
E) fiscal policy involves the promotion of competition but monetary policy involves collecting money to pay for taxes.

Question 15

A positive externality is one in which there is an external benefit bestowed on a third party.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is the category to which the largest portion of households' personal income is allocated?

Accepted Answer

A) Taxes collected by government 
B) Savings 
C) Purchases of services 
D) Purchases of durable goods 
E) Purchases of nondurable goods 
A) Taxes collected by government 
B) Savings 
C) Purchases of services 
D) Purchases of durable goods 
E) Purchases of nondurable goods

Question 17

As the real wage increases,the opportunity cost of working in the home increases.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is a result of increased real wages in the United States?

Accepted Answer

A) A decrease in the quantity of services demanded by households 
B) An increase in the opportunity cost of remaining employed in the home 
C) A decrease in the opportunity cost of working outside the home 
D) A decline in the number of households providing labor outside the home 
E) Reduced use of labor-saving devices in households 
A) A decrease in the quantity of services demanded by households 
B) An increase in the opportunity cost of remaining employed in the home 
C) A decrease in the opportunity cost of working outside the home 
D) A decline in the number of households providing labor outside the home 
E) Reduced use of labor-saving devices in households

Question 19

Which of the following have their profits taxed twice?

Accepted Answer

A) Sole proprietorship 
B) Partnership 
C) Corporation 
D) Nonprofit institutions 
E) S corporations 
A) Sole proprietorship 
B) Partnership 
C) Corporation 
D) Nonprofit institutions 
E) S corporations

Question 20

The primary source of revenue for local governments is the property tax.

Accepted Answer

A) True 
 B)False

Household production is more likely to occur when:

The funds to pay for police protection are usually raised through taxation because:

One explanation for the increased participation of married women in the U.S.labor force is that:

The movement of households from rural to urban settings reduced the degree of specialization in household production.

Trade restrictions result in all of the following except one.Which is the exception?

If one euro exchanges for $1.12,then buying a German car selling for 100,000 euros will cost:

When externalities are present,market prices do not reflect all the social costs or benefits of the activity.

A tariff is:

An example of a positive externality is:

Which of the following would not describe two-thirds of the for-profit businesses in the United States as measured by the sheer number of firms?

Which of the following is a reason why government is a participant in a market-oriented economy?

Which of the following is an example of a durable good?

The difference between fiscal policy and monetary policy is that:

A positive externality is one in which there is an external benefit bestowed on a third party.

Which of the following is the category to which the largest portion of households' personal income is allocated?

As the real wage increases,the opportunity cost of working in the home increases.

Which of the following is a result of increased real wages in the United States?

Which of the following have their profits taxed twice?

The primary source of revenue for local governments is the property tax.

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

Household production is more likely to occur when:

The funds to pay for police protection are usually raised through taxation because:

One explanation for the increased participation of married women in the U.S.labor force is that:

The movement of households from rural to urban settings reduced the degree of specialization in household production.

Trade restrictions result in all of the following except one.Which is the exception?

If one euro exchanges for $1.12,then buying a German car selling for 100,000 euros will cost:

When externalities are present,market prices do not reflect all the social costs or benefits of the activity.

A tariff is:

An example of a positive externality is:

Which of the following would not describe two-thirds of the for-profit businesses in the United States as measured by the sheer number of firms?

Which of the following is a reason why government is a participant in a market-oriented economy?

Which of the following is an example of a durable good?

The difference between fiscal policy and monetary policy is that:

A positive externality is one in which there is an external benefit bestowed on a third party.

Which of the following is the category to which the largest portion of households' personal income is allocated?

As the real wage increases,the opportunity cost of working in the home increases.

Which of the following is a result of increased real wages in the United States?

Which of the following have their profits taxed twice?

The primary source of revenue for local governments is the property tax.

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