Question 1

Private goods are excludable and nonrival in consumption.

Accepted Answer

A) True 
 B)False

Question 2

When you throw trash out your car window you are creating:

Accepted Answer

A) a positive externality. 
B) a negative externality. 
C) a private good. 
D) a public good. 
E) both a private and a public good. 
A) a positive externality. 
B) a negative externality. 
C) a private good. 
D) a public good. 
E) both a private and a public good.

Question 3

Revenue for the state governments in the United States comes primarily from income taxes.

Accepted Answer

A) True 
 B)False

Question 4

The value of a country's imports cannot exceed the value of its exports.

Accepted Answer

A) True 
 B)False

Question 5

Suppose you form a legal partnership with your best friend,and she purchases consulting services calling for a $100,000 fee.Your business is broke,and you never wanted the consultants to work for you-only your partner did.For how much of this debt are you legally liable?

Accepted Answer

A) $25,000 
B) All of the $100,000 
C) The proportion reflected by the proportion of the business owned 
D) Only an amount equal to the assets of the business 
E) $50,000 
A) $25,000 
B) All of the $100,000 
C) The proportion reflected by the proportion of the business owned 
D) Only an amount equal to the assets of the business 
E) $50,000

Question 6

Raghib teaches mathematics at Camford University and receives $40,000 per year.His spouse,Noraini,works as a self-employed computer programmer and charges $40 per hour.Which of the following is true?

Accepted Answer

A) Raghib's income is personal interest;Noraini's is wages. 
B) Raghib's income is a salary;Noraini's is personal interest. 
C) Both Raghib and Noraini receive proprietor's income. 
D) Both Raghib and Noraini receive wage or salary income. 
E) Raghib's income is a salary,and Noraini's income is proprietor's income. 
A) Raghib's income is personal interest;Noraini's is wages. 
B) Raghib's income is a salary;Noraini's is personal interest. 
C) Both Raghib and Noraini receive proprietor's income. 
D) Both Raghib and Noraini receive wage or salary income. 
E) Raghib's income is a salary,and Noraini's income is proprietor's income.

Question 7

If the value of the euro increases relative to the U.S.dollar,then French goods will be less expensive in the U.S.

Accepted Answer

A) True 
 B)False

Question 8

Which component of U.S.household spending has grown the most over the past ten years?

Accepted Answer

A) Taxes 
B) Savings 
C) Spending on services 
D) Spending on nondurable goods 
E) Spending on durable goods 
A) Taxes 
B) Savings 
C) Spending on services 
D) Spending on nondurable goods 
E) Spending on durable goods

Question 9

Externalities can occur as a result of either production or consumption activities.

Accepted Answer

A) True 
 B)False

Question 10

Chris had a before-tax income of $20,000 and paid taxes of $3,000.Pat had a before-tax income of $10,000 and paid taxes of $1,000.Based on this information,which of the following is correct?

Accepted Answer

A) The tax system is regressive. 
B) The tax system is proportional. 
C) The tax system is progressive. 
D) The tax system is based on the benefits received. 
E) There is insufficient information to answer the question. 
A) The tax system is regressive. 
B) The tax system is proportional. 
C) The tax system is progressive. 
D) The tax system is based on the benefits received. 
E) There is insufficient information to answer the question.

Question 11

The movement in U.S.population from the farms to urban areas was caused primarily by:

Accepted Answer

A) each member of a farm family specializing in a particular set of tasks. 
B) a sharp increase in farm productivity. 
C) a decline in the demand for labor in urban areas. 
D) a sharp decline in the demand for agricultural products. 
E) increased education among married women. 
A) each member of a farm family specializing in a particular set of tasks. 
B) a sharp increase in farm productivity. 
C) a decline in the demand for labor in urban areas. 
D) a sharp decline in the demand for agricultural products. 
E) increased education among married women.

Question 12

Trade restrictions can take any of the following forms except one.Which is the exception?

Accepted Answer

A) Tariffs 
B) Free trade agreements 
C) Quotas 
D) Voluntary trade restrictions 
E) Health and safety restrictions 
A) Tariffs 
B) Free trade agreements 
C) Quotas 
D) Voluntary trade restrictions 
E) Health and safety restrictions

Question 13

Consider a system in which a person earning $10,000 pays $1,000 in taxes,a person earning $25,000 pays $1,000 in taxes,and a person earning $60,000 pays $1,000 in taxes.What type of tax is this?

Accepted Answer

A) Regressive 
B) Proportional 
C) Progressive 
D) A tax based on the ability-to-pay principle 
E) A tax impossible to determine with the information provided 
A) Regressive 
B) Proportional 
C) Progressive 
D) A tax based on the ability-to-pay principle 
E) A tax impossible to determine with the information provided

Question 14

A common assumption that economists make about the behavior of elected officials is that they try to:

Accepted Answer

A) maximize the size of their government salaries. 
B) maximize their control over the budget process. 
C) maximize the number of votes they receive in the next election. 
D) minimize the government's expenditures in order to balance the budget. 
E) conform to the wishes of special interest groups so that the government behaves as a single,consistent decision maker. 
A) maximize the size of their government salaries. 
B) maximize their control over the budget process. 
C) maximize the number of votes they receive in the next election. 
D) minimize the government's expenditures in order to balance the budget. 
E) conform to the wishes of special interest groups so that the government behaves as a single,consistent decision maker.

Question 15

To serve the public interest,government sometimes promotes competition by breaking up natural monopolies.

Accepted Answer

A) True 
 B)False

Question 16

During recent elections,consumer groups in various states attempted to get the sales tax on all medicines and drugs removed.They argued that such a tax is severely regressive.What is the economic interpretation of their statement?

Accepted Answer

A) The poor get ill more often than do the rich. 
B) The poor pay higher prices for medicine and drugs than do the rich. 
C) The poor pay a higher percentage of their income in taxes on medicine and drugs than do the rich. 
D) All consumers pay too much money for medicine and drugs. 
E) The sales tax discourages the poor from seeking medical treatment. 
A) The poor get ill more often than do the rich. 
B) The poor pay higher prices for medicine and drugs than do the rich. 
C) The poor pay a higher percentage of their income in taxes on medicine and drugs than do the rich. 
D) All consumers pay too much money for medicine and drugs. 
E) The sales tax discourages the poor from seeking medical treatment.

Question 17

Messitt and McNulty spend $50,000 each to form a law partnership.On the first day,someone trips over a potted plant in their lobby and sues them for $400,000.Which of the following is true?

Accepted Answer

A) If a $400,000 judgment is against the partnership,then each partner will have to pay $200,000. 
B) If a $400,000 judgment is against the partnership and if McNulty cannot afford to pay any of it,then Messitt is liable for $400,000. 
C) Messitt's liability is limited to $300,000 because she owns three-quarters of the firm. 
D) Each individual partner cannot be sued for more than $200,000. 
E) Only McNulty is personally responsible for the damages because he was the one who put the potted plant in the office. 
A) If a $400,000 judgment is against the partnership,then each partner will have to pay $200,000. 
B) If a $400,000 judgment is against the partnership and if McNulty cannot afford to pay any of it,then Messitt is liable for $400,000. 
C) Messitt's liability is limited to $300,000 because she owns three-quarters of the firm. 
D) Each individual partner cannot be sued for more than $200,000. 
E) Only McNulty is personally responsible for the damages because he was the one who put the potted plant in the office.

Question 18

If one US dollar costs 0.8 Euros,then 1 Euro must cost _____ US dollars.

Accepted Answer

A) 0.5 
B) 0.8 
C) 1.0 
D) 1.25 
E) 1.5 
A) 0.5 
B) 0.8 
C) 1.0 
D) 1.25 
E) 1.5

Question 19

A large number of businesses are organized as sole proprietorships because it is easy for them to acquire large amounts of financing.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is true about government activity in the United States?

Accepted Answer

A) Macroeconomic policy is handled mainly at the state level. 
B) Higher education is handled mainly at the national level. 
C) Primary and secondary education is handled mainly at the local level. 
D) Primary and secondary education is handled mainly at the national level. 
E) Police and fire protection are handled mainly at the state level. 
A) Macroeconomic policy is handled mainly at the state level. 
B) Higher education is handled mainly at the national level. 
C) Primary and secondary education is handled mainly at the local level. 
D) Primary and secondary education is handled mainly at the national level. 
E) Police and fire protection are handled mainly at the state level.

Private goods are excludable and nonrival in consumption.

When you throw trash out your car window you are creating:

Revenue for the state governments in the United States comes primarily from income taxes.

The value of a country's imports cannot exceed the value of its exports.

Suppose you form a legal partnership with your best friend,and she purchases consulting services calling for a $100,000 fee.Your business is broke,and you never wanted the consultants to work for you-only your partner did.For how much of this debt are you legally liable?

Raghib teaches mathematics at Camford University and receives $40,000 per year.His spouse,Noraini,works as a self-employed computer programmer and charges $40 per hour.Which of the following is true?

If the value of the euro increases relative to the U.S.dollar,then French goods will be less expensive in the U.S.

Which component of U.S.household spending has grown the most over the past ten years?

Externalities can occur as a result of either production or consumption activities.

Chris had a before-tax income of $20,000 and paid taxes of $3,000.Pat had a before-tax income of $10,000 and paid taxes of $1,000.Based on this information,which of the following is correct?

The movement in U.S.population from the farms to urban areas was caused primarily by:

Trade restrictions can take any of the following forms except one.Which is the exception?

Consider a system in which a person earning $10,000 pays $1,000 in taxes,a person earning $25,000 pays $1,000 in taxes,and a person earning $60,000 pays $1,000 in taxes.What type of tax is this?

A common assumption that economists make about the behavior of elected officials is that they try to:

To serve the public interest,government sometimes promotes competition by breaking up natural monopolies.

During recent elections,consumer groups in various states attempted to get the sales tax on all medicines and drugs removed.They argued that such a tax is severely regressive.What is the economic interpretation of their statement?

Messitt and McNulty spend $50,000 each to form a law partnership.On the first day,someone trips over a potted plant in their lobby and sues them for $400,000.Which of the following is true?

If one US dollar costs 0.8 Euros,then 1 Euro must cost _____ US dollars.

A large number of businesses are organized as sole proprietorships because it is easy for them to acquire large amounts of financing.

Which of the following is true about government activity in the United States?

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

Private goods are excludable and nonrival in consumption.

When you throw trash out your car window you are creating:

Revenue for the state governments in the United States comes primarily from income taxes.

The value of a country's imports cannot exceed the value of its exports.

Suppose you form a legal partnership with your best friend,and she purchases consulting services calling for a $100,000 fee.Your business is broke,and you never wanted the consultants to work for you-only your partner did.For how much of this debt are you legally liable?

Raghib teaches mathematics at Camford University and receives $40,000 per year.His spouse,Noraini,works as a self-employed computer programmer and charges $40 per hour.Which of the following is true?

If the value of the euro increases relative to the U.S.dollar,then French goods will be less expensive in the U.S.

Which component of U.S.household spending has grown the most over the past ten years?

Externalities can occur as a result of either production or consumption activities.

Chris had a before-tax income of $20,000 and paid taxes of $3,000.Pat had a before-tax income of $10,000 and paid taxes of $1,000.Based on this information,which of the following is correct?

The movement in U.S.population from the farms to urban areas was caused primarily by:

Trade restrictions can take any of the following forms except one.Which is the exception?

Consider a system in which a person earning $10,000 pays $1,000 in taxes,a person earning $25,000 pays $1,000 in taxes,and a person earning $60,000 pays $1,000 in taxes.What type of tax is this?

A common assumption that economists make about the behavior of elected officials is that they try to:

To serve the public interest,government sometimes promotes competition by breaking up natural monopolies.

During recent elections,consumer groups in various states attempted to get the sales tax on all medicines and drugs removed.They argued that such a tax is severely regressive.What is the economic interpretation of their statement?

Messitt and McNulty spend $50,000 each to form a law partnership.On the first day,someone trips over a potted plant in their lobby and sues them for $400,000.Which of the following is true?

If one US dollar costs 0.8 Euros,then 1 Euro must cost _____ US dollars.

A large number of businesses are organized as sole proprietorships because it is easy for them to acquire large amounts of financing.

Which of the following is true about government activity in the United States?

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