Question 1

In recent years, redistribution has been the fastest growing category of federal government outlays.

Accepted Answer

A) True 
 B)False

Question 2

Individual income taxes illustrate the ability-to-pay principle of taxation.

Accepted Answer

A) True 
 B)False

Question 3

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 4

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

Accepted Answer

A) True 
 B)False

Question 5

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 6

Which of the following is a rationale for the government provision of education?

Accepted Answer

A)  Everyone has the right to education regardless of wealth. 
B)  Students consider only their personal benefits gained from education, but education also benefits the rest of society. 
C)  No education would be provided in the absence of government provision because everyone would consume it without paying. 
D)  The cost of providing education for the entire public is too large for the private sector. 
E)  The government can provide education at a much lower cost than the private sector. 
A)  Everyone has the right to education regardless of wealth. 
B)  Students consider only their personal benefits gained from education, but education also benefits the rest of society. 
C)  No education would be provided in the absence of government provision because everyone would consume it without paying. 
D)  The cost of providing education for the entire public is too large for the private sector. 
E)  The government can provide education at a much lower cost than the private sector.

Question 7

A product that is produced in the United States and sold in China is called a(n) _____

Accepted Answer

A)  export 
B)  net export. 
C)  import. 
D)  net import. 
E)  domestic good. 
A)  export 
B)  net export. 
C)  import. 
D)  net import. 
E)  domestic good.

Question 8

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 9

Which of the following forms of business organization accounted for the largest proportion of business sales 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 10

Economists assume that people try to maximize their level of satisfaction, sense of well-being, happiness, and overall welfare. This is known as _____

Accepted Answer

A)  utility. 
B)  a low-valued good. 
C)  productivity. 
D)  adaptability. 
E)  efficiency. 
A)  utility. 
B)  a low-valued good. 
C)  productivity. 
D)  adaptability. 
E)  efficiency.

Question 11

A firm with a single owner who has the right to all profits but who also bears unlimited liability for the firm's losses and debts is known as a(n) ______

Accepted Answer

A)  sole proprietorship. 
B)  partnership. 
C)  firm. 
D)  nonprofit organization. 
E)  producer cooperative. 
A)  sole proprietorship. 
B)  partnership. 
C)  firm. 
D)  nonprofit organization. 
E)  producer cooperative.

Question 12

Other revenue sources for the federal government include _____

Accepted Answer

A)  defense. 
B)  interest expenditures. 
C)  Social Security. 
D)  highway tolls. 
E)  Medicare. 
A)  defense. 
B)  interest expenditures. 
C)  Social Security. 
D)  highway tolls. 
E)  Medicare.

Question 13

The principle that those benefiting more from the activity funded by the tax pay more taxes is known as _____

Accepted Answer

A)  the ability-to-pay principle. 
B)  the progressive tax principle. 
C)  the proportional tax principle. 
D)  the regressive tax principle. 
E)  the benefits-received principle. 
A)  the ability-to-pay principle. 
B)  the progressive tax principle. 
C)  the proportional tax principle. 
D)  the regressive tax principle. 
E)  the benefits-received principle.

Question 14

You are more likely to paint your own house than to pay someone to paint your house if _____

Accepted Answer

A)  doing it yourself will cost you more. 
B)  the tax-free nature of do-it-yourself work favors your doing it yourself. 
C)  you have the specialized tools necessary to complete the job quickly. 
D)  you possess less knowledge and experience in painting. 
E)  the opportunity cost of your time is low. 
A)  doing it yourself will cost you more. 
B)  the tax-free nature of do-it-yourself work favors your doing it yourself. 
C)  you have the specialized tools necessary to complete the job quickly. 
D)  you possess less knowledge and experience in painting. 
E)  the opportunity cost of your time is low.

Question 15

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 principle. 
E)  The marginal tax rate is zero for both Chris and Pat. 
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 principle. 
E)  The marginal tax rate is zero for both Chris and Pat.

Question 16

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

Accepted Answer

A)  to enforce contracts and protect private property 
B)  to promote collusion among firms 
C)  to promote the growth of natural monopolies 
D)  to regulate the functioning of financial institutions 
E)  to promote externalities in production 
A)  to enforce contracts and protect private property 
B)  to promote collusion among firms 
C)  to promote the growth of natural monopolies 
D)  to regulate the functioning of financial institutions 
E)  to promote externalities in production

Question 17

Which of the following is not a government transfer program?

Accepted Answer

A)  unemployment compensation 
B)  social Security 
C)  food stamps 
D)  Medicare 
E)  income taxes 
A)  unemployment compensation 
B)  social Security 
C)  food stamps 
D)  Medicare 
E)  income taxes

Question 18

Personal income tax is based on the benefits-received principle of taxation.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following would not be considered a role of the government?

Accepted Answer

A)  promoting competition 
B)  providing public goods 
C)  providing externalities 
D)  regulating natural monopolies 
E)  safeguarding private property and enforcing contracts 
A)  promoting competition 
B)  providing public goods 
C)  providing externalities 
D)  regulating natural monopolies 
E)  safeguarding private property and enforcing contracts

Question 20

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

In recent years, redistribution has been the fastest growing category of federal government outlays.

Individual income taxes illustrate the ability-to-pay principle of taxation.

Government antitrust laws were designed to _____

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

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

Which of the following is a rationale for the government provision of education?

A product that is produced in the United States and sold in China is called a(n) _____

Household production is more likely to occur when ______

Which of the following forms of business organization accounted for the largest proportion of business sales in the United States in 2012?

Economists assume that people try to maximize their level of satisfaction, sense of well-being, happiness, and overall welfare. This is known as _____

A firm with a single owner who has the right to all profits but who also bears unlimited liability for the firm's losses and debts is known as a(n) ______

Other revenue sources for the federal government include _____

The principle that those benefiting more from the activity funded by the tax pay more taxes is known as _____

You are more likely to paint your own house than to pay someone to paint your house if _____

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?

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

Which of the following is not a government transfer program?

Personal income tax is based on the benefits-received principle of taxation.

Which of the following would not be considered a role of the government?

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

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.

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Exam 3: Economic Decision Makers.

In recent years, redistribution has been the fastest growing category of federal government outlays.

Individual income taxes illustrate the ability-to-pay principle of taxation.

Government antitrust laws were designed to _____

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

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

Which of the following is a rationale for the government provision of education?

A product that is produced in the United States and sold in China is called a(n) _____

Household production is more likely to occur when ______

Which of the following forms of business organization accounted for the largest proportion of business sales in the United States in 2012?

Economists assume that people try to maximize their level of satisfaction, sense of well-being, happiness, and overall welfare. This is known as _____

A firm with a single owner who has the right to all profits but who also bears unlimited liability for the firm's losses and debts is known as a(n) ______

Other revenue sources for the federal government include _____

The principle that those benefiting more from the activity funded by the tax pay more taxes is known as _____

You are more likely to paint your own house than to pay someone to paint your house if _____

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?

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

Which of the following is not a government transfer program?

Personal income tax is based on the benefits-received principle of taxation.

Which of the following would not be considered a role of the government?

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

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