Question 1

Which of the following would be the best example of a sole proprietorship?

Accepted Answer

A) The legal office of Alias,Smith and Jones 
B) A local mom and pop restaurant 
C) Microsoft 
D) A local hospital 
E) A State University 
A) The legal office of Alias,Smith and Jones 
B) A local mom and pop restaurant 
C) Microsoft 
D) A local hospital 
E) A State University

Question 2

The fact that some people now work in virtual offices is an example of the

Accepted Answer

A) high cost of office space 
B) Information Revolution 
C) breakdown of society 
D) Industrial Revolution 
E) success of not-for-profit organizations 
A) high cost of office space 
B) Information Revolution 
C) breakdown of society 
D) Industrial Revolution 
E) success of not-for-profit organizations

Question 3

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 through all levels of income 
B) proportional throughout all levels of income 
C) regressive throughout all levels of income 
D) based on the benefits-received principle 
E) there is insufficient information to answer the question 
A) progressive through all levels of income 
B) proportional throughout all levels of income 
C) regressive throughout all levels of income 
D) based on the benefits-received principle 
E) there is insufficient information to answer the question

Question 4

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

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 5

In terms of total sales,the dominant form of business firm in the U.S.economy is the

Accepted Answer

A) corporation 
B) sole proprietorship 
C) partnership 
D) nonprofit organization 
E) limited partnership corporation 
A) corporation 
B) sole proprietorship 
C) partnership 
D) nonprofit organization 
E) limited partnership corporation

Question 6

Which resource generates the largest share of the income in the United States?

Accepted Answer

A) labor 
B) land 
C) capital 
D) entrepreneurial ability 
E) money 
A) labor 
B) land 
C) capital 
D) entrepreneurial ability 
E) money

Question 7

Import restrictions usually benefit domestic producers at the expense of domestic consumers.

Accepted Answer

A) True 
 B)False

Question 8

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.

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Household production still exists because it often requires fewer specialized resources than market production does.

Accepted Answer

A) True 
 B)False

Question 11

The introduction of telecommuting,whereby people work at home and connect to their employers' offices via the Internet,

Accepted Answer

A) was mandated by the government 
B) was made possible by technological advances 
C) was encouraged by higher fuel costs 
D) was a consequence of corporate downsizing 
E) has been strenuously resisted by most workers 
A) was mandated by the government 
B) was made possible by technological advances 
C) was encouraged by higher fuel costs 
D) was a consequence of corporate downsizing 
E) has been strenuously resisted by most workers

Question 12

Nonprofit,or not-for-profit,firms

Accepted Answer

A) maximize revenue instead of profit 
B) minimize cost rather than maximize profit 
C) often pursue goals other than profit maximization 
D) pursue profit as their main goal despite their name 
E) have no incentive to produce efficiently 
A) maximize revenue instead of profit 
B) minimize cost rather than maximize profit 
C) often pursue goals other than profit maximization 
D) pursue profit as their main goal despite their name 
E) have no incentive to produce efficiently

Question 13

The term "fiscal policy" refers to

Accepted Answer

A) the amount of physical output produced by firms 
B) the means by which government policy makes firms more productive 
C) the avenue by which government influences credit markets 
D) spending and taxing by governments 
E) a tool of government that works in the opposite direction of monetary policy 
A) the amount of physical output produced by firms 
B) the means by which government policy makes firms more productive 
C) the avenue by which government influences credit markets 
D) spending and taxing by governments 
E) a tool of government that works in the opposite direction of monetary policy

Question 14

Which of the following represents the best example of personal interest?

Accepted Answer

A) the paycheck that Freeda brings home from her job as a computer programer 
B) the interest that Hans earns from the savings account he has with USA Bank 
C) the revenue that Janet has left over after she pays all the expenses associated with running her software development business 
D) the check that Hunter receives each month for leasing his land to the natural gas company that is drilling on his land 
E) the check that Trisha gets each month from the Social Security Administration 
A) the paycheck that Freeda brings home from her job as a computer programer 
B) the interest that Hans earns from the savings account he has with USA Bank 
C) the revenue that Janet has left over after she pays all the expenses associated with running her software development business 
D) the check that Hunter receives each month for leasing his land to the natural gas company that is drilling on his land 
E) the check that Trisha gets each month from the Social Security Administration

Question 15

Taxes collected on the basis of the benefits-received principle

Accepted Answer

A) provide the states with their main sources of revenue 
B) tend to redistribute income from rich to poor 
C) collect the same total amount from each individual 
D) connect the revenue side of the budget with the spending side of the budget 
E) make it possible for government to spend money on activities that markets can't provide 
A) provide the states with their main sources of revenue 
B) tend to redistribute income from rich to poor 
C) collect the same total amount from each individual 
D) connect the revenue side of the budget with the spending side of the budget 
E) make it possible for government to spend money on activities that markets can't provide

Question 16

Consider a system in which a person earning $10,000 pays $1,000 in taxes,a person earning $25,000 pays $2,000,and someone earning $60,000 pays $4,000.What type of tax is this?

Accepted Answer

A) progressive 
B) proportional 
C) regressive 
D) property tax 
E) one based on the benefits principle of taxation 
A) progressive 
B) proportional 
C) regressive 
D) property tax 
E) one based on the benefits principle of taxation

Question 17

Despite specialization and comparative advantage,household production still exists because for some households

Accepted Answer

A) the opportunity cost of production at home is greater than the cost of purchasing the good in the market 
B) production at home is less costly than purchasing the good in the market 
C) the value of home production exceeds the sunk cost of home production 
D) the value of home production is ignored 
E) food and clothing expenditures represent a small portion of their total budget 
A) the opportunity cost of production at home is greater than the cost of purchasing the good in the market 
B) production at home is less costly than purchasing the good in the market 
C) the value of home production exceeds the sunk cost of home production 
D) the value of home production is ignored 
E) food and clothing expenditures represent a small portion of their total budget

Question 18

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 19

Which of the following would be the best example of a corporation?

Accepted Answer

A) The legal office of Alias,Smith and Jones 
B) A local mom and pop restaurant 
C) Microsoft 
D) A local hospital 
E) A State University 
A) The legal office of Alias,Smith and Jones 
B) A local mom and pop restaurant 
C) Microsoft 
D) A local hospital 
E) A State University

Question 20

Mr.Thomson has a before-tax income of $20,000 and paid taxes of $2,000.Ms.Lynch had a before-tax income of $10,000 and paid taxes of $1,500.Based on this information,which of the following is correct?

Accepted Answer

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

Exam 3: Economic Decision Makers

Which of the following would be the best example of a sole proprietorship?

The fact that some people now work in virtual offices is an example of the

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 of the following is the best example of the ownership of the resource called labor

In terms of total sales,the dominant form of business firm in the U.S.economy is the

Which resource generates the largest share of the income in the United States?

Import restrictions usually benefit domestic producers at the expense of domestic consumers.

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

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

Household production still exists because it often requires fewer specialized resources than market production does.

The introduction of telecommuting,whereby people work at home and connect to their employers' offices via the Internet,

Nonprofit,or not-for-profit,firms

The term "fiscal policy" refers to

Which of the following represents the best example of personal interest?

Taxes collected on the basis of the benefits-received principle

Consider a system in which a person earning $10,000 pays $1,000 in taxes,a person earning $25,000 pays $2,000,and someone earning $60,000 pays $4,000.What type of tax is this?

Despite specialization and comparative advantage,household production still exists because for some households

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

Which of the following would be the best example of a corporation?

Mr.Thomson has a before-tax income of $20,000 and paid taxes of $2,000.Ms.Lynch had a before-tax income of $10,000 and paid taxes of $1,500.Based on this information,which of the following is correct?

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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