Question 1

Goods and services produced by the government are sold at prices that are set to recover production costs.

Accepted Answer

A) True 
 B)False

Question 2

The main source of revenue for the U.S.federal government is:

Accepted Answer

A) personal income taxes. 
B) corporate income taxes. 
C) sales taxes. 
D) borrowing in financial markets. 
E) revenue from the sale of government goods and services. 
A) personal income taxes. 
B) corporate income taxes. 
C) sales taxes. 
D) borrowing in financial markets. 
E) revenue from the sale of government goods and services.

Question 3

One thing that is not true about cooperatives is that they:

Accepted Answer

A) put out raw materials,like wool and cotton,to rural households that turn it into finished products. 
B) pool resources to buy and sell more efficiently. 
C) try to minimize costs. 
D) operate with limited liability of members. 
E) enjoy tax-exempt status. 
A) put out raw materials,like wool and cotton,to rural households that turn it into finished products. 
B) pool resources to buy and sell more efficiently. 
C) try to minimize costs. 
D) operate with limited liability of members. 
E) enjoy tax-exempt status.

Question 4

Of the three levels of government in the United States:

Accepted Answer

A) only the federal government provides public goods. 
B) only the federal government has the power to tax. 
C) local governments are primarily responsible for primary and secondary education. 
D) the federal government is primarily responsible for higher education. 
E) state governments are primarily responsible for economic stability. 
A) only the federal government provides public goods. 
B) only the federal government has the power to tax. 
C) local governments are primarily responsible for primary and secondary education. 
D) the federal government is primarily responsible for higher education. 
E) state governments are primarily responsible for economic stability.

Question 5

Which of the following is not an example of a business operated by a consumer cooperative?

Accepted Answer

A) A grocery store 
B) An apartment building 
C) Sunkist,a farm cooperative owned and operated by citrus growers 
D) A health plan 
E) An electric power facility 
A) A grocery store 
B) An apartment building 
C) Sunkist,a farm cooperative owned and operated by citrus growers 
D) A health plan 
E) An electric power facility

Question 6

Which of the following taxes is most clearly based on the benefits-received principle of taxation?

Accepted Answer

A) Corporate income tax 
B) Gasoline tax 
C) Personal income tax 
D) Payroll tax 
E) Value added tax 
A) Corporate income tax 
B) Gasoline tax 
C) Personal income tax 
D) Payroll tax 
E) Value added tax

Question 7

Which of the following is a major advantage of a sole proprietorship?

Accepted Answer

A) Separation of ownership and control 
B) Limited liability for business debt 
C) Transferability of ownership and firm continuity over time 
D) Ease of start-up 
E) Ease of obtaining financing 
A) Separation of ownership and control 
B) Limited liability for business debt 
C) Transferability of ownership and firm continuity over time 
D) Ease of start-up 
E) Ease of obtaining financing

Question 8

In recent decades,international trade has been:

Accepted Answer

A) a constant percentage of U.S.GDP. 
B) a declining fraction of U.S.GDP. 
C) an increasing fraction of U.S.GDP. 
D) declining as measured by total dollars spent. 
E) constant as measured by total dollars spent. 
A) a constant percentage of U.S.GDP. 
B) a declining fraction of U.S.GDP. 
C) an increasing fraction of U.S.GDP. 
D) declining as measured by total dollars spent. 
E) constant as measured by total dollars spent.

Question 9

The fastest-growing component of U.S.personal consumption is services.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following would indicate that a tax is regressive?

Accepted Answer

A) High-income people pay $5,000 in taxes;low-income people pay $2,000. 
B) Both high-income and low-income people pay $200 each. 
C) High-income people pay 20 percent of their income in taxes;low-income people pay 10 percent. 
D) Both high-income and low-income people pay 10 percent of their income in taxes. 
E) Low-income people are exempt from the tax. 
A) High-income people pay $5,000 in taxes;low-income people pay $2,000. 
B) Both high-income and low-income people pay $200 each. 
C) High-income people pay 20 percent of their income in taxes;low-income people pay 10 percent. 
D) Both high-income and low-income people pay 10 percent of their income in taxes. 
E) Low-income people are exempt from the tax.

Question 11

All of the following are advantages of partnerships except one.Which is the exception?

Accepted Answer

A) They are relatively easy to start. 
B) Their profits are taxed once as personal income. 
C) Their liability is limited by each partner's share of the business. 
D) They offer a greater opportunity for specialization by the owners. 
E) They enable continuation of the firm if one partner dies. 
A) They are relatively easy to start. 
B) Their profits are taxed once as personal income. 
C) Their liability is limited by each partner's share of the business. 
D) They offer a greater opportunity for specialization by the owners. 
E) They enable continuation of the firm if one partner dies.

Question 12

Market activity differs from government activity because:

Accepted Answer

A) markets generally force prices to below-cost levels. 
B) governments never charge for the services they provide. 
C) markets do not use voluntary exchange mechanisms. 
D) markets provide a direct link between benefits and costs. 
E) governments have strong incentives to keep costs under strict control. 
A) markets generally force prices to below-cost levels. 
B) governments never charge for the services they provide. 
C) markets do not use voluntary exchange mechanisms. 
D) markets provide a direct link between benefits and costs. 
E) governments have strong incentives to keep costs under strict control.

Question 13

Since 1930,U.S.government spending as a percent of GDP has:

Accepted Answer

A) increased. 
B) decreased. 
C) stayed the same. 
D) showed no particular trend. 
E) increased by the same percent each year. 
A) increased. 
B) decreased. 
C) stayed the same. 
D) showed no particular trend. 
E) increased by the same percent each year.

Question 14

Households act as suppliers when they provide:

Accepted Answer

A) goods and services to firms and governments. 
B) resources to firms and governments. 
C) tax payments to governments. 
D) the demand for only what firms supply or make available. 
E) money to firms in exchange for goods and services. 
A) goods and services to firms and governments. 
B) resources to firms and governments. 
C) tax payments to governments. 
D) the demand for only what firms supply or make available. 
E) money to firms in exchange for goods and services.

Question 15

Gross Domestic Product is the market value of:

Accepted Answer

A) all exchanges made during the course of a year. 
B) all final goods produced during the course of a year. 
C) all monetary transactions during the course of a year. 
D) all the goods produced during the course of a year over and above what is required to maintain the population and the stock of capital. 
E) all final goods sold during the course of a year. 
A) all exchanges made during the course of a year. 
B) all final goods produced during the course of a year. 
C) all monetary transactions during the course of a year. 
D) all the goods produced during the course of a year over and above what is required to maintain the population and the stock of capital. 
E) all final goods sold during the course of a year.

Question 16

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

Accepted Answer

A) A strawberry muffin 
B) A cherry pie 
C) A newspaper 
D) A handheld calculator 
E) A pencil 
A) A strawberry muffin 
B) A cherry pie 
C) A newspaper 
D) A handheld calculator 
E) A pencil

Question 17

Import quotas on sugar entering the United States result in lower sugar prices in the United States.

Accepted Answer

A) True 
 B)False

Question 18

A disadvantage of the corporate form of business organization is that corporate income is taxed twice.

Accepted Answer

A) True 
 B)False

Question 19

Government antitrust laws were designed to:

Accepted Answer

A) encourage the production of public goods. 
B) prevent natural monopolies. 
C) prevent collusion among firms. 
D) regulate natural monopolies. 
E) correct the outcomes of positive and negative externalities in private markets. 
A) encourage the production of public goods. 
B) prevent natural monopolies. 
C) prevent collusion among firms. 
D) regulate natural monopolies. 
E) correct the outcomes of positive and negative externalities in private markets.

Question 20

You are more likely to repair a leaky drainpipe yourself than hire a plumber:

Accepted Answer

A) as the tax rate on your earned income dramatically decreases. 
B) if the opportunity cost of your time decreases. 
C) the less knowledge and experience in plumbing repair work you possess. 
D) if you need to purchase the specialized tools required to complete the repair work. 
E) as the transaction cost of the do-it-yourself repair increases. 
A) as the tax rate on your earned income dramatically decreases. 
B) if the opportunity cost of your time decreases. 
C) the less knowledge and experience in plumbing repair work you possess. 
D) if you need to purchase the specialized tools required to complete the repair work. 
E) as the transaction cost of the do-it-yourself repair increases.

Goods and services produced by the government are sold at prices that are set to recover production costs.

The main source of revenue for the U.S.federal government is:

One thing that is not true about cooperatives is that they:

Of the three levels of government in the United States:

Which of the following is not an example of a business operated by a consumer cooperative?

Which of the following taxes is most clearly based on the benefits-received principle of taxation?

Which of the following is a major advantage of a sole proprietorship?

In recent decades,international trade has been:

The fastest-growing component of U.S.personal consumption is services.

Which of the following would indicate that a tax is regressive?

All of the following are advantages of partnerships except one.Which is the exception?

Market activity differs from government activity because:

Since 1930,U.S.government spending as a percent of GDP has:

Households act as suppliers when they provide:

Gross Domestic Product is the market value of:

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

Import quotas on sugar entering the United States result in lower sugar prices in the United States.

A disadvantage of the corporate form of business organization is that corporate income is taxed twice.

Government antitrust laws were designed to:

You are more likely to repair a leaky drainpipe yourself than hire a plumber:

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

Goods and services produced by the government are sold at prices that are set to recover production costs.

The main source of revenue for the U.S.federal government is:

One thing that is not true about cooperatives is that they:

Of the three levels of government in the United States:

Which of the following is not an example of a business operated by a consumer cooperative?

Which of the following taxes is most clearly based on the benefits-received principle of taxation?

Which of the following is a major advantage of a sole proprietorship?

In recent decades,international trade has been:

The fastest-growing component of U.S.personal consumption is services.

Which of the following would indicate that a tax is regressive?

All of the following are advantages of partnerships except one.Which is the exception?

Market activity differs from government activity because:

Since 1930,U.S.government spending as a percent of GDP has:

Households act as suppliers when they provide:

Gross Domestic Product is the market value of:

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

Import quotas on sugar entering the United States result in lower sugar prices in the United States.

A disadvantage of the corporate form of business organization is that corporate income is taxed twice.

Government antitrust laws were designed to:

You are more likely to repair a leaky drainpipe yourself than hire a plumber:

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