Question 1

Private goods are excludable and nonrival in consumption.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is true of 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 education is handled mainly at the local level. 
D)  Primary and secondary education are 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 education is handled mainly at the local level. 
D)  Primary and secondary education are handled mainly at the national level. 
E)  Police and fire protection are handled mainly at the state level.

Question 3

Economists generally assume that _____

Accepted Answer

A)  firms act to maximize the dividends paid to stockholders. 
B)  households act to maximize their wealth. 
C)  households act to maximize utility. 
D)  firms act to maximize social welfare. 
E)  both households and firms act to minimize opportunity cost. 
A)  firms act to maximize the dividends paid to stockholders. 
B)  households act to maximize their wealth. 
C)  households act to maximize utility. 
D)  firms act to maximize social welfare. 
E)  both households and firms act to minimize opportunity cost.

Question 4

Identify a correct statement about household production.

Accepted Answer

A)  Household production is more likely to occur when it requires many specialized resources. 
B)  Household production is more likely to occur when technology makes it more costly than market production. 
C)  Household production is more likely to occur when tax avoidance is undesirable. 
D)  Household production is more likely to occur when less control over the final product is desirable. 
E)  Household production is more likely to occur when the opportunity cost of household work is relatively small. 
A)  Household production is more likely to occur when it requires many specialized resources. 
B)  Household production is more likely to occur when technology makes it more costly than market production. 
C)  Household production is more likely to occur when tax avoidance is undesirable. 
D)  Household production is more likely to occur when less control over the final product is desirable. 
E)  Household production is more likely to occur when the opportunity cost of household work is relatively small.

Question 5

Contracts are enforced by:

Accepted Answer

A)  the firms that make the contracts through buy-out clauses. 
B)  law firms that specialize in contract enforcement. 
C)  corporations specializing in contract writing and enforcement. 
D)  the government through the judicial system. 
E)  both households and firms through customer relations departments. 
A)  the firms that make the contracts through buy-out clauses. 
B)  law firms that specialize in contract enforcement. 
C)  corporations specializing in contract writing and enforcement. 
D)  the government through the judicial system. 
E)  both households and firms through customer relations departments.

Question 6

If one dollar is initially equal in value to one euro and the demand for euros increases, then each dollar will be worth _____

Accepted Answer

A)  more than one euro, and European imports will be cheaper in the United States. 
B)  less than one euro, and European imports will be more expensive in the United States. 
C)  more than one euro, and European imports will be more expensive in the United States. 
D)  less than one euro, and European imports will be cheaper in the United States. 
E)  the same as the euro, and there will be no change in the values of imports or exports. 
A)  more than one euro, and European imports will be cheaper in the United States. 
B)  less than one euro, and European imports will be more expensive in the United States. 
C)  more than one euro, and European imports will be more expensive in the United States. 
D)  less than one euro, and European imports will be cheaper in the United States. 
E)  the same as the euro, and there will be no change in the values of imports or exports.

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Externalities are defined as _____

Accepted Answer

A)  any transaction external to a firm. 
B)  costs or benefits that fall on third parties. 
C)  policies that firms adopt to sell products outside a country. 
D)  managers' dealings with stockholders outside a firm. 
E)  costs of maintaining plant and equipment to avoid the scrutiny of external auditors. 
A)  any transaction external to a firm. 
B)  costs or benefits that fall on third parties. 
C)  policies that firms adopt to sell products outside a country. 
D)  managers' dealings with stockholders outside a firm. 
E)  costs of maintaining plant and equipment to avoid the scrutiny of external auditors.

Question 9

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 10

Owners of corporations are referred to most frequently as ______

Accepted Answer

A)  entrepreneurs. 
B)  lienholders. 
C)  limited partners. 
D)  managers. 
E)  stockholders. 
A)  entrepreneurs. 
B)  lienholders. 
C)  limited partners. 
D)  managers. 
E)  stockholders.

Question 11

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 intermediate 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 intermediate goods sold during the course of a year.

Question 12

Which of the following categories includes the largest number of firms in the United States?

Accepted Answer

A)  sole proprietorship 
B)  partnership 
C)  corporation 
D)  producer cooperatives 
E)  consumer cooperatives 
A)  sole proprietorship 
B)  partnership 
C)  corporation 
D)  producer cooperatives 
E)  consumer cooperatives

Question 13

The largest portion of personal income is spent on _____

Accepted Answer

A)  taxes. 
B)  durable goods. 
C)  nondurable goods. 
D)  services. 
E)  savings. 
A)  taxes. 
B)  durable goods. 
C)  nondurable goods. 
D)  services. 
E)  savings.

Question 14

Rationality in the household decision-making process means that _____

Accepted Answer

A)  all households make the same decisions. 
B)  everyone in the household agrees on all decisions. 
C)  households act to maximize their level of satisfaction. 
D)  households want to earn as much income as possible. 
E)  all households have the same information on product quality and prices. 
A)  all households make the same decisions. 
B)  everyone in the household agrees on all decisions. 
C)  households act to maximize their level of satisfaction. 
D)  households want to earn as much income as possible. 
E)  all households have the same information on product quality and prices.

Question 15

Which of the following forms of business organizations was the least common in the United States in 2012?

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 16

Which of the following is one of the chief reasons for the change in the participation rate of married women in the U.S. workforce?

Accepted Answer

A)  An increase in the marginal cost of working in the labor force 
B)  An increase in financial independence provided by jobs 
C)  An increase in the opportunity cost of household work 
D)  An increase in household appliances. 
E)  An increase in the time that women spend shopping. 
A)  An increase in the marginal cost of working in the labor force 
B)  An increase in financial independence provided by jobs 
C)  An increase in the opportunity cost of household work 
D)  An increase in household appliances. 
E)  An increase in the time that women spend shopping.

Question 17

Government programs aim to_____

Accepted Answer

A)  fix the prices of essential goods in an economy. 
B)  encourage the creation of natural monopolies. 
C)  reduce pollution. 
D)  increase the supply of luxury goods in an economy. 
E)  encourage firms to charge different prices to different groups of customers for the same good. 
A)  fix the prices of essential goods in an economy. 
B)  encourage the creation of natural monopolies. 
C)  reduce pollution. 
D)  increase the supply of luxury goods in an economy. 
E)  encourage firms to charge different prices to different groups of customers for the same good.

Question 18

The movement of households from rural to urban settings increased the degree of specialization in factory production.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following statements is correct?

Accepted Answer

A)  Utility is the same as usefulness. 
B)  Utility maximization depends on each household's earnings. 
C)  Utility maximization depends on each household's subjective goals. 
D)  Households' maximum utility is from acquiring material wealth. 
E)  Households do not benefit from utility maximization. 
A)  Utility is the same as usefulness. 
B)  Utility maximization depends on each household's earnings. 
C)  Utility maximization depends on each household's subjective goals. 
D)  Households' maximum utility is from acquiring material wealth. 
E)  Households do not benefit from utility maximization.

Question 20

Cash or in-kind benefits given to individuals by the government are known as _______

Accepted Answer

A)  interest. 
B)  dividends. 
C)  wages. 
D)  transfer payments. 
E)  charitable contributions. 
A)  interest. 
B)  dividends. 
C)  wages. 
D)  transfer payments. 
E)  charitable contributions.

Private goods are excludable and nonrival in consumption.

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

Economists generally assume that _____

Identify a correct statement about household production.

Contracts are enforced by:

If one dollar is initially equal in value to one euro and the demand for euros increases, then each dollar will be worth _____

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

Externalities are defined as _____

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

Owners of corporations are referred to most frequently as ______

Gross domestic product is the market value of _____

Which of the following categories includes the largest number of firms in the United States?

The largest portion of personal income is spent on _____

Rationality in the household decision-making process means that _____

Which of the following forms of business organizations was the least common in the United States in 2012?

Which of the following is one of the chief reasons for the change in the participation rate of married women in the U.S. workforce?

Government programs aim to_____

The movement of households from rural to urban settings increased the degree of specialization in factory production.

Which of the following statements is correct?

Cash or in-kind benefits given to individuals by the government are known as _______

The Art and Science of Economic Analysis.

Economic Tools and Economic Systems.

Demand, Supply, and Markets.

Introduction to Macroeconomics.

Tracking the U. S. Economy.

Unemployment and Inflation.

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.

Macro 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.

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

Economists generally assume that _____

Identify a correct statement about household production.

Contracts are enforced by:

If one dollar is initially equal in value to one euro and the demand for euros increases, then each dollar will be worth _____

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

Externalities are defined as _____

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

Owners of corporations are referred to most frequently as ______

Gross domestic product is the market value of _____

Which of the following categories includes the largest number of firms in the United States?

The largest portion of personal income is spent on _____

Rationality in the household decision-making process means that _____

Which of the following forms of business organizations was the least common in the United States in 2012?

Which of the following is one of the chief reasons for the change in the participation rate of married women in the U.S. workforce?

Government programs aim to_____

The movement of households from rural to urban settings increased the degree of specialization in factory production.

Which of the following statements is correct?

Cash or in-kind benefits given to individuals by the government are known as _______

The Art and Science of Economic Analysis.

Economic Tools and Economic Systems.

Demand, Supply, and Markets.

Introduction to Macroeconomics.

Tracking the U. S. Economy.

Unemployment and Inflation.

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.

Macro Policy Debate: Active or Passive?

International Trade.

International Finance.

Economic Development.

Filters