Question 1

The difference between Capitalism and Socialism is that

Accepted Answer

A) Capitalism is concerned more about how to slice up the "pie" 
B) Socialism is concerned with making the "pie" as large as possible 
C) Capitalism is concerned with making the "pie" as large as possible 
D) Both a and B 
A) Capitalism is concerned more about how to slice up the "pie" 
B) Socialism is concerned with making the "pie" as large as possible 
C) Capitalism is concerned with making the "pie" as large as possible 
D) Both a and B C

Question 2

A consumer values a car at $525,000 and a producer values the same car at $485,000.If sales tax is 8% and is levied on the seller,then the sellers bottom line price is

Accepted Answer

A) $527,000 
B) $523,800 
C) $525,000 
D) $500,000 
A) $527,000 
B) $523,800 
C) $525,000 
D) $500,000 B

Question 3

A consumer values a car at $525,000 and a producer values the same car at $485,000.If the transaction is completed at $510,000,the transaction will generate:

Accepted Answer

A) No surplus 
B) $25,000 worth of seller surplus and unknown amount of buyer surplus 
C) $15,000 worth of buyer surplus and $25,000 of seller surplus 
D) $25,000 worth of buyer surplus and unknown amount of seller surplus 
A) No surplus 
B) $25,000 worth of seller surplus and unknown amount of buyer surplus 
C) $15,000 worth of buyer surplus and $25,000 of seller surplus 
D) $25,000 worth of buyer surplus and unknown amount of seller surplus C

Question 4

The biggest advantage of capitalism is that

Accepted Answer

A) It generates wealth with the help of government intervention 
B) Prices hinder in moving assets from high-value to low-value uses 
C) It forces involuntary exchanges 
D) It creates wealth by letting a person follow his or her own self-interest 
A) It generates wealth with the help of government intervention 
B) Prices hinder in moving assets from high-value to low-value uses 
C) It forces involuntary exchanges 
D) It creates wealth by letting a person follow his or her own self-interest

Question 5

Social forces:

Accepted Answer

A) affect the price mechanism through cultural norms. 
B) affect the price mechanism through the educational system. 
C) affect the price mechanism through scarcity. 
D) do not affect the price mechanism. 
A) affect the price mechanism through cultural norms. 
B) affect the price mechanism through the educational system. 
C) affect the price mechanism through scarcity. 
D) do not affect the price mechanism.

Question 6

If you are willing to sell your car business for $500,000 and someone offers you $420,000 for it,this transaction will generate:

Accepted Answer

A) There is no surplus created 
B) $80,000 worth of seller surplus and unknown amount of buyer surplus 
C) $40,000 worth of buyer surplus and $40,000 of seller surplus 
D) $80,000 worth of buyer surplus and unknown amount of seller surplus 
A) There is no surplus created 
B) $80,000 worth of seller surplus and unknown amount of buyer surplus 
C) $40,000 worth of buyer surplus and $40,000 of seller surplus 
D) $80,000 worth of buyer surplus and unknown amount of seller surplus

Question 7

Some critics of capitalism argue that

Accepted Answer

A) There is too much government intervention in the economy 
B) Involuntary trade generates no wealth 
C) If one person makes money,someone else must be losing it 
D) Voluntary trade ensures gains for both consumers and producers 
A) There is too much government intervention in the economy 
B) Involuntary trade generates no wealth 
C) If one person makes money,someone else must be losing it 
D) Voluntary trade ensures gains for both consumers and producers

Question 8

A consumer values a car at $30,000 and a producer values the same car at $20,000.If the transaction is completed at $24,000,the transaction will not take place if:

Accepted Answer

A) The tax is equal to the seller surplus 
B) The tax is smaller than the total surplus 
C) The tax is larger than the total surplus 
D) The tax is smaller than the buyer surplus 
A) The tax is equal to the seller surplus 
B) The tax is smaller than the total surplus 
C) The tax is larger than the total surplus 
D) The tax is smaller than the buyer surplus

Question 9

An example of price floor is

Accepted Answer

A) Minimum wages 
B) Rent controls in New York 
C) Both a and b 
D) None of the above 
A) Minimum wages 
B) Rent controls in New York 
C) Both a and b 
D) None of the above

Question 10

Total surplus or gains created from trade equal

Accepted Answer

A) Seller surplus 
B) Buyer surplus 
C) The summation of seller and buyer surplus 
D) Profits earned by a firm 
A) Seller surplus 
B) Buyer surplus 
C) The summation of seller and buyer surplus 
D) Profits earned by a firm

Question 11

If you are willing to purchase a house for $500,000 and you purchase the house for $500,000 ,this transaction will generate:

Accepted Answer

A) There is no surplus created 
B) $0 worth of seller surplus and unknown amount of buyer surplus 
C) $0 worth of buyer surplus and unknown amount of seller surplus 
D) Not information provided 
A) There is no surplus created 
B) $0 worth of seller surplus and unknown amount of buyer surplus 
C) $0 worth of buyer surplus and unknown amount of seller surplus 
D) Not information provided

Question 12

Wealth creating transactions are less likely to occur

Accepted Answer

A) Without private property rights 
B) Without contract enforcement 
C) Both a and b 
D) None of the above 
A) Without private property rights 
B) Without contract enforcement 
C) Both a and b 
D) None of the above

Question 13

One lesson of business:

Accepted Answer

A) is tracing the consequences of a policy 
B) promoting a policy change to eradicate inefficiencies 
C) buy a low-valued assets and sell it to someone who values it higher. 
D) None of the above 
A) is tracing the consequences of a policy 
B) promoting a policy change to eradicate inefficiencies 
C) buy a low-valued assets and sell it to someone who values it higher. 
D) None of the above

Question 14

Price ceilings are primarily targeted to help

Accepted Answer

A) No one 
B) Consumers 
C) Producers 
D) Government 
A) No one 
B) Consumers 
C) Producers 
D) Government

Question 15

Rent controls

Accepted Answer

A) Is an example of price floors 
B) Is an example of price ceilings 
C) Destroy wealth by preventing the movement of apartments to higher-valued use. 
D) Both b and c 
A) Is an example of price floors 
B) Is an example of price ceilings 
C) Destroy wealth by preventing the movement of apartments to higher-valued use. 
D) Both b and c

Question 16

The difference between the maximum price the consumer is willing to pay and the price the consumer actually pays for a product is referred to as:

Accepted Answer

A) market surplus 
B) market shortage 
C) buyer surplus 
D) seller surplus. 
A) market surplus 
B) market shortage 
C) buyer surplus 
D) seller surplus.

Question 17

A consumer values a car at $30,000 and a producer values the same car at $20,000.If the transaction is completed at $24,000,what level of tax rate will result in unconsummated transaction?

Accepted Answer

A) 0% 
B) 25% 
C) 20% 
D) 40% 
A) 0% 
B) 25% 
C) 20% 
D) 40%

Question 18

Government can intervene in the market through

Accepted Answer

A) Price floors 
B) Price ceilings 
C) Taxes 
D) All the above 
A) Price floors 
B) Price ceilings 
C) Taxes 
D) All the above

Question 19

An individual's value for a good or service is the

Accepted Answer

A) The amount of money he or she used to pay for a good 
B) The amount of money he or she is willing to pay for it 
C) The amount of money he or she has to spend on goods 
D) None of the above 
A) The amount of money he or she used to pay for a good 
B) The amount of money he or she is willing to pay for it 
C) The amount of money he or she has to spend on goods 
D) None of the above

Question 20

Price floors are primarily targeted to help

Accepted Answer

A) No one 
B) Consumers 
C) Producers 
D) Government 
A) No one 
B) Consumers 
C) Producers 
D) Government

Exam 2: The One Lessor of Business

The difference between Capitalism and Socialism is that

A consumer values a car at $525,000 and a producer values the same car at $485,000.If sales tax is 8% and is levied on the seller,then the sellers bottom line price is

A consumer values a car at $525,000 and a producer values the same car at $485,000.If the transaction is completed at $510,000,the transaction will generate:

The biggest advantage of capitalism is that

Social forces:

If you are willing to sell your car business for $500,000 and someone offers you $420,000 for it,this transaction will generate:

Some critics of capitalism argue that

A consumer values a car at $30,000 and a producer values the same car at $20,000.If the transaction is completed at $24,000,the transaction will not take place if:

An example of price floor is

Total surplus or gains created from trade equal

If you are willing to purchase a house for $500,000 and you purchase the house for $500,000 ,this transaction will generate:

Wealth creating transactions are less likely to occur

One lesson of business:

Price ceilings are primarily targeted to help

Rent controls

The difference between the maximum price the consumer is willing to pay and the price the consumer actually pays for a product is referred to as:

A consumer values a car at $30,000 and a producer values the same car at $20,000.If the transaction is completed at $24,000,what level of tax rate will result in unconsummated transaction?

Government can intervene in the market through

An individual's value for a good or service is the

Price floors are primarily targeted to help

Benefits, Costs, and Decisions

Extent How Muchdecisions

Investment Decisions: Look Ahead and Reason Back

Simple Pricing

Economies of Scale and Scope

Understanding Markets and Industry Changes

Market Structure and Long-Run Equilibrium

Strategy: the Quest to Keep Profit From Eroding

Foreign Exchange, trade, and Bubbles

More Realistic and Complex Pricing

Direct Price Discrimination Indirect Price Discrimination

Strategic Games

Bargaining

Making Decisions With Uncertainty

Auctions

The Problem of Adverse Selection

The Problem of Moral Hazard

Getting Employees to Work in the Firms Best Interest

Getting Divisions to Work in the Firms Best Interest

Managing Vertical Relationships

Filters