Question 1

When the government sells something it produces,

Accepted Answer

A) revenue received must be greater than cost to justify government production 
B) revenue received must equal cost because government is a nonprofit organization 
C) the price does not always reflect the cost of producing the good 
D) the price charged is an accurate measure of the benefits generated 
E) it prices the good the same way a natural monopolist would 
A) revenue received must be greater than cost to justify government production 
B) revenue received must equal cost because government is a nonprofit organization 
C) the price does not always reflect the cost of producing the good 
D) the price charged is an accurate measure of the benefits generated 
E) it prices the good the same way a natural monopolist would

Question 2

What part of federal government spending has grown the most rapidly in recent years?

Accepted Answer

A) national defense 
B) welfare 
C) interest on the national debt 
D) social security and Medicare 
E) all other forms of federal government spending 
A) national defense 
B) welfare 
C) interest on the national debt 
D) social security and Medicare 
E) all other forms of federal government spending

Question 3

You own stock worth an estimated $1 million in the LPL corporation.In addition,you have personal assets worth another $2 million.LPL becomes insolvent,with debts exceeding assets by $15 million.Your personal wealth will decline by

Accepted Answer

A) $0 
B) $1 million 
C) $1.5 million 
D) $3 million 
E) your proportion of the total outstanding stock shares times $15 million 
A) $0 
B) $1 million 
C) $1.5 million 
D) $3 million 
E) your proportion of the total outstanding stock shares times $15 million

Question 4

Which of the following did not occur during the Industrial Revolution?

Accepted Answer

A) worker productivity increased 
B) factories became larger 
C) direct supervision of labor decreased 
D) division of labor increased 
E) fewer stages of production were organized in the household 
A) worker productivity increased 
B) factories became larger 
C) direct supervision of labor decreased 
D) division of labor increased 
E) fewer stages of production were organized in the household

Question 5

Households supply four basic types of resources.They include all of the following except

Accepted Answer

A) natural resources 
B) final goods and services 
C) capital 
D) entrepreneurial ability 
E) labor 
A) natural resources 
B) final goods and services 
C) capital 
D) entrepreneurial ability 
E) labor

Question 6

The most common form of business organization in the United States is the sole proprietorship.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is one of the chief reasons for the increased number of married women in the U.S.work force?

Accepted Answer

A) The marginal cost of working in the labor force has increased. 
B) Jobs provide greater independence and self-worth. 
C) The opportunity cost of household work has increased. 
D) The sunk cost of household appliances has risen to the point that women must work to make payments on them. 
E) Women spend more time in the market as a result of the increasing division of labor in household production. 
A) The marginal cost of working in the labor force has increased. 
B) Jobs provide greater independence and self-worth. 
C) The opportunity cost of household work has increased. 
D) The sunk cost of household appliances has risen to the point that women must work to make payments on them. 
E) Women spend more time in the market as a result of the increasing division of labor in household production.

Question 9

The second largest source of tax revenue for the federal government is

Accepted Answer

A) payroll taxes 
B) the personal income tax 
C) the corporate income tax 
D) excise taxes 
E) the sales tax 
A) payroll taxes 
B) the personal income tax 
C) the corporate income tax 
D) excise taxes 
E) the sales tax

Question 10

Luigi owns and operates a small restaurant.The income he receives from the restaurant is classified as

Accepted Answer

A) saving 
B) proprietor's income 
C) wages and salaries 
D) rental income 
E) dividends 
A) saving 
B) proprietor's income 
C) wages and salaries 
D) rental income 
E) dividends

Question 11

Which of the following accounts for the largest source of revenue for the federal government?

Accepted Answer

A) sales tax 
B) federal property tax 
C) personal income tax 
D) corporate income tax 
E) borrowing 
A) sales tax 
B) federal property tax 
C) personal income tax 
D) corporate income tax 
E) borrowing

Question 12

Mark and Charles are roommates at college.Each has written a 25-page term paper for the same English class.They are equally poor typists.Charles types his own paper and gets paid by Mark to type his,too.On the basis of the information given,which one of the following must be true?

Accepted Answer

A) Mark is wealthier than Charles. 
B) Mark needs more time to study than Charles. 
C) Charles hates typing. 
D) Mark and Charles have different utilities for typing but place the same value on time. 
E) Mark's opportunity cost of typing is higher than Charles's. 
A) Mark is wealthier than Charles. 
B) Mark needs more time to study than Charles. 
C) Charles hates typing. 
D) Mark and Charles have different utilities for typing but place the same value on time. 
E) Mark's opportunity cost of typing is higher than Charles's.

Question 13

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) rapid growth in the service sector has provided additional 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) rapid growth in the service sector has provided additional 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 14

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

Accepted Answer

A) food prepared at home 
B) food eaten at a restaurant 
C) high-fashion clothing 
D) binoculars 
E) motor oil 
A) food prepared at home 
B) food eaten at a restaurant 
C) high-fashion clothing 
D) binoculars 
E) motor oil

Question 15

Household income is spent on all of the following except one.Which is the exception?

Accepted Answer

A) services 
B) tax payments 
C) durable goods 
D) nondurable goods 
E) dividends 
A) services 
B) tax payments 
C) durable goods 
D) nondurable goods 
E) dividends

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

If a state government finances treatment facilities for alcoholics out of revenues from a tax on liquor,it is

Accepted Answer

A) basing its taxation on ability to pay 
B) levying a proportional tax 
C) able to afford fewer treatment facilities when liquor sales decrease 
D) discouraging alcoholics from seeking treatment at government facilities 
E) providing a service that the private sector cannot provide 
A) basing its taxation on ability to pay 
B) levying a proportional tax 
C) able to afford fewer treatment facilities when liquor sales decrease 
D) discouraging alcoholics from seeking treatment at government facilities 
E) providing a service that the private sector cannot provide

Question 18

Katie had a before-tax income of $40,000 and paid taxes of $6,000.Rinji had a before-tax income of $35,000 and paid taxes of $5,250.Based on this information,the tax system is

Accepted Answer

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

Question 19

In the following situation,the tax system is 
$\begin{array} { r r r r } \text {Taxable income }&\$ 1,000 & \$ 2,000 & \$ 4,000 & \$ 8,000 \ \text {  Tax payments}&\$ 10 & \$ 30 & \$ 90 & \$ 270 \end{array}$

Accepted Answer

A) progressive throughout all levels of income 
B) progressive between $1,000 and $2,000 of income but regressive above $2,000 
C) regressive throughout all levels of income 
D) regressive between $1,000 and $2,000 of income but progressive above $2,000 
E) proportional throughout all levels of income 
A) progressive throughout all levels of income 
B) progressive between $1,000 and $2,000 of income but regressive above $2,000 
C) regressive throughout all levels of income 
D) regressive between $1,000 and $2,000 of income but progressive above $2,000 
E) proportional throughout all levels of income

Question 20

Which form of business organization accounts for the largest proportion of business sales in the United States?

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

Exam 3: Economic Decision Makers

When the government sells something it produces,

What part of federal government spending has grown the most rapidly in recent years?

You own stock worth an estimated $1 million in the LPL corporation.In addition,you have personal assets worth another $2 million.LPL becomes insolvent,with debts exceeding assets by $15 million.Your personal wealth will decline by

Which of the following did not occur during the Industrial Revolution?

Households supply four basic types of resources.They include all of the following except

The most common form of business organization in the United States is the sole proprietorship.

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

Which of the following is one of the chief reasons for the increased number of married women in the U.S.work force?

The second largest source of tax revenue for the federal government is

Luigi owns and operates a small restaurant.The income he receives from the restaurant is classified as

Which of the following accounts for the largest source of revenue for the federal government?

Mark and Charles are roommates at college.Each has written a 25-page term paper for the same English class.They are equally poor typists.Charles types his own paper and gets paid by Mark to type his,too.On the basis of the information given,which one of the following must be true?

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

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

Household income is spent on all of the following except one.Which is the exception?

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

If a state government finances treatment facilities for alcoholics out of revenues from a tax on liquor,it is

Katie had a before-tax income of $40,000 and paid taxes of $6,000.Rinji had a before-tax income of $35,000 and paid taxes of $5,250.Based on this information,the tax system is

In the following situation,the tax system is Taxable income \ 1,000 \ 2,000 \ 4,000 \ 8,000 Tax payments \ 10 \ 30 \ 90 \ 270

Which form of business organization accounts for the largest proportion of business sales in the United States?

The Art and Science of Economic Analysis

Economic Tools and Economics Systems

Demand, supply, and Markets

Introduction to Macroeconomics

Tracking the Useconomy

Unemployment and Inflation

Productivity and Growth

Aaggregate Expenditure and Aggregate Demand

Baggregate Expenditure and 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

Externalities and the Environment

International Finance

Economic Development

understanding Graphs

National Income Accounts

The Algebra of Demand-Side Equilibrium

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