Question 1

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

Accepted Answer

A)  a strawberry muffin 
B)  a cherry pie 
C)  a newspaper 
D)  a handheld calculator 
E)  a pencil 
A)  a strawberry muffin 
B)  a cherry pie 
C)  a newspaper 
D)  a handheld calculator 
E)  a pencil D

Question 2

If 1 U.S. dollar costs 1.1010 euros, then 1 euro must cost _____ U.S. dollars.

Accepted Answer

A)  0.8080 
B)  0.85 
C)  0.87 
D)  00.90 
E)  00.91 
A)  0.8080 
B)  0.85 
C)  0.87 
D)  00.90 
E)  00.91 E

Question 3

The overall U.S. balance of payments _____

Accepted Answer

A)  has been showing a deficit for the last fifty years. 
B)  has been showing a surplus for the last fifty years. 
C)  is the merchandise trade balance. 
D)  equals exports minus imports. 
E)  shows how deficits in one account are exactly offset by surpluses in other accounts. 
A)  has been showing a deficit for the last fifty years. 
B)  has been showing a surplus for the last fifty years. 
C)  is the merchandise trade balance. 
D)  equals exports minus imports. 
E)  shows how deficits in one account are exactly offset by surpluses in other accounts. E

Question 4

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. This is an example of _____

Accepted Answer

A)  progressive taxation. 
B)  proportional taxation. 
C)  regressive taxation. 
D)  a property tax. 
E)  a tax based on the benefits-received principle. 
A)  progressive taxation. 
B)  proportional taxation. 
C)  regressive taxation. 
D)  a property tax. 
E)  a tax based on the benefits-received principle.

Question 5

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's total utility from typing is higher than Charles's total utility from typing. 
B)  Charles needs more time to study than Mark. 
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's total utility from typing is higher than Charles's total utility from typing. 
B)  Charles needs more time to study than Mark. 
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 6

Which of the following best defines foreign exchange?

Accepted Answer

A)  trade between two countries 
B)  the market where exporting and importing activities take place 
C)  the price of a currency relative to another currency 
D)  revenue from imports 
E)  the currency that the United States uses to buy goods from other countries 
A)  trade between two countries 
B)  the market where exporting and importing activities take place 
C)  the price of a currency relative to another currency 
D)  revenue from imports 
E)  the currency that the United States uses to buy goods from other countries

Question 7

A group of farmers in southwestern Pennsylvania bought a pesticide-free pasture. They sold their locally raised organic beef in the butcher shop they owned together. This group of farmers would be identified as a(n) ______

Accepted Answer

A)  not-for-profit organization. 
B)  S corporation. 
C)  producer cooperative. 
D)  sole proprietorship. 
E)  cottage industry. 
A)  not-for-profit organization. 
B)  S corporation. 
C)  producer cooperative. 
D)  sole proprietorship. 
E)  cottage industry.

Question 8

Economists assume that the objective of households is to _____

Accepted Answer

A)  maximize household wealth. 
B)  own as much land as possible. 
C)  save as much money as possible. 
D)  acquire as many goods as possible. 
E)  maximize utility. 
A)  maximize household wealth. 
B)  own as much land as possible. 
C)  save as much money as possible. 
D)  acquire as many goods as possible. 
E)  maximize utility.

Question 9

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

Accepted Answer

A)  food cooked at home 
B)  food eaten at a restaurant 
C)  gasoline 
D)  binoculars 
E)  motor oil 
A)  food cooked at home 
B)  food eaten at a restaurant 
C)  gasoline 
D)  binoculars 
E)  motor oil

Question 10

Which of the following is true of public goods?

Accepted Answer

A)  The market mechanism helps to signal the quantity that is demanded by the public. 
B)  Payment for consumption is efficiently provided by market prices. 
C)  Consumption by one person does not preclude consumption of the same good by another person. 
D)  The public sector is guided to produce the correct quantity by market prices. 
E)  Voluntary contributions are sufficient to finance the production of public goods. 
A)  The market mechanism helps to signal the quantity that is demanded by the public. 
B)  Payment for consumption is efficiently provided by market prices. 
C)  Consumption by one person does not preclude consumption of the same good by another person. 
D)  The public sector is guided to produce the correct quantity by market prices. 
E)  Voluntary contributions are sufficient to finance the production of public goods.

Question 11

Gasoline taxes illustrate the benefits-received principle of taxation.

Accepted Answer

A) True 
 B)False

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 partnership is the least common form of business organization in the United States.

Accepted Answer

A) True 
 B)False

Question 14

In a market economy, households supply _____

Accepted Answer

A)  labor, capital, natural resources, and entrepreneurial ability. 
B)  dividends from the stocks they hold. 
C)  interest and capital gains from the bonds they hold. 
D)  goods and services. 
E)  wages, interest, rents, and profit. 
A)  labor, capital, natural resources, and entrepreneurial ability. 
B)  dividends from the stocks they hold. 
C)  interest and capital gains from the bonds they hold. 
D)  goods and services. 
E)  wages, interest, rents, and profit.

Question 15

Of the three levels of government in the United States, _____

Accepted Answer

A)  only the federal government provides public goods. 
B)  only the federal government has the power to tax. 
C)  local governments are primarily responsible for secondary education. 
D)  the federal government is primarily responsible for higher education. 
E)  state governments are primarily responsible for economic stability. 
A)  only the federal government provides public goods. 
B)  only the federal government has the power to tax. 
C)  local governments are primarily responsible for secondary education. 
D)  the federal government is primarily responsible for higher education. 
E)  state governments are primarily responsible for economic stability.

Question 16

The term utility refers to _____

Accepted Answer

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

Question 17

Some people have argued that the government should provide only those goods that we would truly define as public goods. If so, which of the following should the government provide?

Accepted Answer

A)  national defense 
B)  daycare centers for children of working mothers 
C)  mail delivery 
D)  unemployment benefits 
E)  subsidies for agricultural products 
A)  national defense 
B)  daycare centers for children of working mothers 
C)  mail delivery 
D)  unemployment benefits 
E)  subsidies for agricultural products

Question 18

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

Accepted Answer

A)  payroll taxes. 
B)  public goods. 
C)  corporate income taxes. 
D)  excise taxes. 
E)  user charges. 
A)  payroll taxes. 
B)  public goods. 
C)  corporate income taxes. 
D)  excise taxes. 
E)  user charges.

Question 19

The largest portion of U.S. personal income in 2012 was spent on _____

Accepted Answer

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

Question 20

The funds to pay for police protection are usually raised through taxation because _____

Accepted Answer

A)  police protection would be hard to provide exclusively to those who voluntarily pay for it. 
B)  people would not voluntarily pay salaries to officials who might arrest them. 
C)  police protection is a basic necessity. 
D)  goods financed through taxation can be guaranteed to all who pay for it. 
E)  the government believes that those who receive the benefits from the service should pay for it. 
A)  police protection would be hard to provide exclusively to those who voluntarily pay for it. 
B)  people would not voluntarily pay salaries to officials who might arrest them. 
C)  police protection is a basic necessity. 
D)  goods financed through taxation can be guaranteed to all who pay for it. 
E)  the government believes that those who receive the benefits from the service should pay for it.

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

If 1 U.S. dollar costs 1.1010 euros, then 1 euro must cost _____ U.S. dollars.

The overall U.S. balance of payments _____

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. This is an example of _____

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?

Which of the following best defines foreign exchange?

A group of farmers in southwestern Pennsylvania bought a pesticide-free pasture. They sold their locally raised organic beef in the butcher shop they owned together. This group of farmers would be identified as a(n) ______

Economists assume that the objective of households is to _____

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

Which of the following is true of public goods?

Gasoline taxes illustrate the benefits-received principle of taxation.

Nonprofit, or not-for-profit, firms:

The partnership is the least common form of business organization in the United States.

In a market economy, households supply _____

Of the three levels of government in the United States, _____

The term utility refers to _____

Some people have argued that the government should provide only those goods that we would truly define as public goods. If so, which of the following should the government provide?

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

The largest portion of U.S. personal income in 2012 was spent on _____

The funds to pay for police protection are usually raised through taxation because _____

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.

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

If 1 U.S. dollar costs 1.1010 euros, then 1 euro must cost _____ U.S. dollars.

The overall U.S. balance of payments _____

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. This is an example of _____

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?

Which of the following best defines foreign exchange?

A group of farmers in southwestern Pennsylvania bought a pesticide-free pasture. They sold their locally raised organic beef in the butcher shop they owned together. This group of farmers would be identified as a(n) ______

Economists assume that the objective of households is to _____

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

Which of the following is true of public goods?

Gasoline taxes illustrate the benefits-received principle of taxation.

Nonprofit, or not-for-profit, firms:

The partnership is the least common form of business organization in the United States.

In a market economy, households supply _____

Of the three levels of government in the United States, _____

The term utility refers to _____

Some people have argued that the government should provide only those goods that we would truly define as public goods. If so, which of the following should the government provide?

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

The largest portion of U.S. personal income in 2012 was spent on _____

The funds to pay for police protection are usually raised through taxation because _____

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