Question 1

Which of the following include 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 2

Which of the following is the best example of the ownership of the resource called entrepreneurship

Accepted Answer

A) John Smith's ownership of 10 shares of a manufacturer of farm tractors 
B) Pogo O'Reilly's ownership of 10 shares of a natural gas extraction company 
C) Helen Restock's ownership of a $10,000 savings bond 
D) Abe Hawthorne's college degree in marketing 
E) Ann Stump's creative,risk-taking personality 
A) John Smith's ownership of 10 shares of a manufacturer of farm tractors 
B) Pogo O'Reilly's ownership of 10 shares of a natural gas extraction company 
C) Helen Restock's ownership of a $10,000 savings bond 
D) Abe Hawthorne's college degree in marketing 
E) Ann Stump's creative,risk-taking personality

Question 3

Sole proprietorships produce more goods and services than does any other form of business organization.

Accepted Answer

A) True 
 B)False

Question 4

In the United States,all levels of government together spend about

Accepted Answer

A) one out of every three dollars paid for finished goods and services 
B) half of the dollars paid for defense spending 
C) the same amount as private citizens and corporations 
D) one out of every three dollars paid for education 
E) 80 percent of their budgets on transfer payments 
A) one out of every three dollars paid for finished goods and services 
B) half of the dollars paid for defense spending 
C) the same amount as private citizens and corporations 
D) one out of every three dollars paid for education 
E) 80 percent of their budgets on transfer payments

Question 5

If one dollar is initially equal in value to one euro and 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 6

Under a regressive income tax system,individuals with higher incomes pay higher marginal tax rates.

Accepted Answer

A) True 
 B)False

Question 7

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 8

International trade occurs because the opportunity cost of producing specific goods differs across

Accepted Answer

A) firms 
B) individuals 
C) regions of the U.S. 
D) countries 
E) households 
A) firms 
B) individuals 
C) regions of the U.S. 
D) countries 
E) households

Question 9

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 10

Caleb teaches economics at Yucky State University and is paid $50,000 per year.He also provides economic forecasts for local business for which he charges $100 per hour.Which of the following is true?

Accepted Answer

A) all of Caleb's income is salary 
B) some of Caleb's income is salary and some is personal interest 
C) all of Caleb's income is proprietor's income 
D) some of Caleb's income is salary and some is proprietor's income 
E) all of Caleb's income is personal interest 
A) all of Caleb's income is salary 
B) some of Caleb's income is salary and some is personal interest 
C) all of Caleb's income is proprietor's income 
D) some of Caleb's income is salary and some is proprietor's income 
E) all of Caleb's income is personal interest

Question 11

The corporate form of business organization

Accepted Answer

A) is chosen by more firms than any other form of organization in the United States 
B) gives firm owners limited liability 
C) generates less than half of the output in the U.S.economy 
D) combines the limited liability of the partnership with the personal control of the sole proprietorship 
E) is the least complex form of business organization 
A) is chosen by more firms than any other form of organization in the United States 
B) gives firm owners limited liability 
C) generates less than half of the output in the U.S.economy 
D) combines the limited liability of the partnership with the personal control of the sole proprietorship 
E) is the least complex form of business organization

Question 12

What is the rationale for government provision of education?

Accepted Answer

A) Not all incomes are equal,but everyone has the right to education regardless of wealth. 
B) Potential students consider only their personal benefits gained from education,but the rest of society benefits,too. 
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. 
E) The government can provide education at a much lower cost than the private sector. 
A) Not all incomes are equal,but everyone has the right to education regardless of wealth. 
B) Potential students consider only their personal benefits gained from education,but the rest of society benefits,too. 
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. 
E) The government can provide education at a much lower cost than the private sector.

Question 13

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

Accepted Answer

A) corporate income taxes 
B) personal income taxes 
C) property taxes 
D) gasoline excise taxes 
E) user fees that collect the same amount from each person 
A) corporate income taxes 
B) personal income taxes 
C) property taxes 
D) gasoline excise taxes 
E) user fees that collect the same amount from each person

Question 14

Whether we look at marginal tax rates or average tax rates,the U.S.income tax is

Accepted Answer

A) progressive 
B) based on the benefits received 
C) proportional 
D) regressive 
E) All of the answers are correct. 
A) progressive 
B) based on the benefits received 
C) proportional 
D) regressive 
E) All of the answers are correct.

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

A positive externality is one in which there is an external benefit bestowed on a third party>

Accepted Answer

A) True 
 B)False

Question 17

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) a greater opportunity for specialization by the owners 
E) a 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) a greater opportunity for specialization by the owners 
E) a continuation of the firm if one partner dies

Question 18

Which of the following is not a government transfer program?

Accepted Answer

A) unemployment compensation 
B) Social Security 
C) food stamps 
D) Medicare 
E) movement of soldiers to a different military base 
A) unemployment compensation 
B) Social Security 
C) food stamps 
D) Medicare 
E) movement of soldiers to a different military base

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

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

Exam 3: Economic Decision Makers

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

Which of the following is the best example of the ownership of the resource called entrepreneurship

Sole proprietorships produce more goods and services than does any other form of business organization.

In the United States,all levels of government together spend about

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

Under a regressive income tax system,individuals with higher incomes pay higher marginal tax rates.

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?

International trade occurs because the opportunity cost of producing specific goods differs across

In recent decades,international trade has been

Caleb teaches economics at Yucky State University and is paid $50,000 per year.He also provides economic forecasts for local business for which he charges $100 per hour.Which of the following is true?

The corporate form of business organization

What is the rationale for government provision of education?

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

Whether we look at marginal tax rates or average tax rates,the U.S.income tax is

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

A positive externality is one in which there is an external benefit bestowed on a third party>

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

Which of the following is not a government transfer program?

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

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

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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