Question 1

Firms try to minimize costs and maximize profits and in the process produce:

Accepted Answer

A) the goods and services that buyers want at the highest possible cost. 
B) the goods and services that buyers want at the least possible cost. 
C) the maximum amount of goods or services that they are capable of producing. 
D) economically inefficient amounts of goods or services. 
E) only those goods and services which command a very high price in the market. 
A) the goods and services that buyers want at the highest possible cost. 
B) the goods and services that buyers want at the least possible cost. 
C) the maximum amount of goods or services that they are capable of producing. 
D) economically inefficient amounts of goods or services. 
E) only those goods and services which command a very high price in the market.

Question 2

When the government sector is included in the circular flow diagram,the total value of private production will equal the value of household income.

Accepted Answer

A) True 
 B)False

Question 3

A trade deficit involves:

Accepted Answer

A) net flows of goods from foreign countries to the home country government. 
B) net money flows from the foreign country firms to the home country government. 
C) net money flows from the domestic firms to the home country government. 
D) net money flows from the foreign country firms to the home country. 
E) net flows of goods from foreign countries to the firms of the home country. 
A) net flows of goods from foreign countries to the home country government. 
B) net money flows from the foreign country firms to the home country government. 
C) net money flows from the domestic firms to the home country government. 
D) net money flows from the foreign country firms to the home country. 
E) net flows of goods from foreign countries to the firms of the home country.

Question 4

Scenario 4-1 In a given year,country A exported $12 million worth of goods to country B and $6 million worth of goods to country C; country B exported $4 million worth of goods to country A and $7 million worth of goods to country C; and country C exported $5 million worth of goods to country A and $2 million worth of goods to country B.
-
According to Scenario 4-1,country B is running a: ____ with country A and a ____ with country C.

Accepted Answer

A) trade deficit with country A and a trade surplus with country C. 
B) trade surplus with both countries A and C. 
C) trade surplus with country A and a trade deficit with country C. 
D) trade deficit with voth countries A and C. 
E) balanced trade with country A and a trade deficit with country C. 
A) trade deficit with country A and a trade surplus with country C. 
B) trade surplus with both countries A and C. 
C) trade surplus with country A and a trade deficit with country C. 
D) trade deficit with voth countries A and C. 
E) balanced trade with country A and a trade deficit with country C.

Question 5

Which of the following is true of U.S.net exports prior to the 1960s?

Accepted Answer

A) Since most of the oil needs of the U.S.were met through imports,imports exceeded exports prior to the 1960s in the U.S. 
B) Prior to the 1960s,exports from the U.S.more or less equalled imports into the U.S. 
C) The U.S.was running a trade surplus prior to the 1960s. 
D) Prior to the 1960s,the U.S.ran twin deficits- both a current account deficit as well as a budget deficit. 
E) Since the U.S.dollar was overvalued prior to the 1960s,the U.S.exported less than it imported. 
A) Since most of the oil needs of the U.S.were met through imports,imports exceeded exports prior to the 1960s in the U.S. 
B) Prior to the 1960s,exports from the U.S.more or less equalled imports into the U.S. 
C) The U.S.was running a trade surplus prior to the 1960s. 
D) Prior to the 1960s,the U.S.ran twin deficits- both a current account deficit as well as a budget deficit. 
E) Since the U.S.dollar was overvalued prior to the 1960s,the U.S.exported less than it imported.

Question 6

Identify the international organization that makes loans to developing countries.

Accepted Answer

A) The World Bank 
B) The Federal Reserve 
C) The World Trade Organization 
D) The Industrial Development Board 
E) The Bank of England 
A) The World Bank 
B) The Federal Reserve 
C) The World Trade Organization 
D) The Industrial Development Board 
E) The Bank of England

Question 7

The figure given below represents the equilibrium price and output in the market for restaurant meals and delivery meals. Figure 4.1  
- Refer to Figure 4.1.Identify the impact on the price of Restaurant Meals and Delivery Meals following the direction of the shifts in demand in these two industries.

Accepted Answer

A) The price of Restaurant Meals rises while the price of Delivery Meals declines. 
B) The price of both Restaurant Meals and Delivery Meals declines. 
C) The price of Restaurant Meals declines while the price of Delivery Meals rises. 
D) The price of both Restaurant Meals and Delivery Meals rises. 
E) The price of Restaurant Meals and the price of Delivery Meals add up to $10. 
A) The price of Restaurant Meals rises while the price of Delivery Meals declines. 
B) The price of both Restaurant Meals and Delivery Meals declines. 
C) The price of Restaurant Meals declines while the price of Delivery Meals rises. 
D) The price of both Restaurant Meals and Delivery Meals rises. 
E) The price of Restaurant Meals and the price of Delivery Meals add up to $10.

Question 8

Which of the following is a defining feature of a multinational firm?

Accepted Answer

A) It exports goods and services to foreign nations. 
B) It develops joint ventures with foreign firms. 
C) It owns and operates production facilities in more than one country. 
D) It employs agents in various countries to sell their products abroad. 
E) It holds patents on its products and services. 
A) It exports goods and services to foreign nations. 
B) It develops joint ventures with foreign firms. 
C) It owns and operates production facilities in more than one country. 
D) It employs agents in various countries to sell their products abroad. 
E) It holds patents on its products and services.

Question 9

When a household owns shares of stock:

Accepted Answer

A) it has ownership rights in that firm. 
B) it is entitled to the majority of the firm's profits. 
C) it is liable to bear the entire loss faced by the firm. 
D) it can consume the firm's products without paying for it. 
E) it is responsible for correcting any defect in the product identified by the customers. 
A) it has ownership rights in that firm. 
B) it is entitled to the majority of the firm's profits. 
C) it is liable to bear the entire loss faced by the firm. 
D) it can consume the firm's products without paying for it. 
E) it is responsible for correcting any defect in the product identified by the customers.

Question 10

Which of the following economic indicators is used by the World Bank to classify countries as industrial economies or developing countries?

Accepted Answer

A) GDP 
B) Rate of inflation 
C) Net exports 
D) Per capital income 
E) Budget deficits 
A) GDP 
B) Rate of inflation 
C) Net exports 
D) Per capital income 
E) Budget deficits

Question 11

Empirical evidence suggests that the federal budget has remained more or less in surplus between 1990 and 2002.

Accepted Answer

A) True 
 B)False

Question 12

The government sector sells resource services to households and buys goods and services from firms.

Accepted Answer

A) True 
 B)False

Question 13

The term consumer sovereignty refers to:

Accepted Answer

A) the fact that consumers' choices are limited to what the producers decide to produce. 
B) a situation in which the government decides what is produced. 
C) the idea that consumers ultimately determine what is produced. 
D) the idea that consumers try to maximize their utility. 
E) the idea that the preferences of both producers and the government ultimately determine what is produced. 
A) the fact that consumers' choices are limited to what the producers decide to produce. 
B) a situation in which the government decides what is produced. 
C) the idea that consumers ultimately determine what is produced. 
D) the idea that consumers try to maximize their utility. 
E) the idea that the preferences of both producers and the government ultimately determine what is produced.

Question 14

Balance in international trade suggests that:

Accepted Answer

A) a trade surplus exists. 
B) there is a net flow of goods and services from foreign countries to domestic firms. 
C) a trade deficit exists. 
D) domestic firms buy more foreign products than they sell. 
E) the value of net exports is zero. 
A) a trade surplus exists. 
B) there is a net flow of goods and services from foreign countries to domestic firms. 
C) a trade deficit exists. 
D) domestic firms buy more foreign products than they sell. 
E) the value of net exports is zero.

Question 15

Which of the following correctly describes the market-clearing price?

Accepted Answer

A) It is the price which minimizes the aggregate surplus in the market. 
B) It is the same as the equilibrium price. 
C) It is the price at which the maximum quantity of the good is sold. 
D) It is the minimum price at which the product must be sold for the firm to remain in business. 
E) It is the price at which firms have to exit the market. 
A) It is the price which minimizes the aggregate surplus in the market. 
B) It is the same as the equilibrium price. 
C) It is the price at which the maximum quantity of the good is sold. 
D) It is the minimum price at which the product must be sold for the firm to remain in business. 
E) It is the price at which firms have to exit the market.

Question 16

Scenario 4-1 In a given year,country A exported $12 million worth of goods to country B and $6 million worth of goods to country C; country B exported $4 million worth of goods to country A and $7 million worth of goods to country C; and country C exported $5 million worth of goods to country A and $2 million worth of goods to country B.
-
According to Scenario 4-1,country C has net exports of:

Accepted Answer

A) zero. 
B) $13 million. 
C) $6 million. 
D) -$13 million. 
E) -$6 million. 
A) zero. 
B) $13 million. 
C) $6 million. 
D) -$13 million. 
E) -$6 million.

Question 17

Since the U.S.is organized as a market economy,the government sector does not play a role in economic activity.

Accepted Answer

A) True 
 B)False

Question 18

National economic policies are usually set by the local government in the U.S.,making it the focus of economic discussions.

Accepted Answer

A) True 
 B)False

Question 19

The _____ tend to have a smaller public sector relative to the total economy.

Accepted Answer

A) communist economies 
B) centrally planned economies 
C) socialist economies 
D) market economies 
E) mercantilist economies 
A) communist economies 
B) centrally planned economies 
C) socialist economies 
D) market economies 
E) mercantilist economies

Question 20

Annual expenditures by the federal government exhibited an upward trend,rising from $3 billion in 1930 to more than $1 trillion in 2010.

Accepted Answer

A) True 
 B)False

Firms try to minimize costs and maximize profits and in the process produce:

When the government sector is included in the circular flow diagram,the total value of private production will equal the value of household income.

A trade deficit involves:

Which of the following is true of U.S.net exports prior to the 1960s?

Identify the international organization that makes loans to developing countries.

The figure given below represents the equilibrium price and output in the market for restaurant meals and delivery meals. Figure 4.1 - Refer to Figure 4.1.Identify the impact on the price of Restaurant Meals and Delivery Meals following the direction of the shifts in demand in these two industries.

Which of the following is a defining feature of a multinational firm?

When a household owns shares of stock:

Which of the following economic indicators is used by the World Bank to classify countries as industrial economies or developing countries?

Empirical evidence suggests that the federal budget has remained more or less in surplus between 1990 and 2002.

The government sector sells resource services to households and buys goods and services from firms.

The term consumer sovereignty refers to:

Balance in international trade suggests that:

Which of the following correctly describes the market-clearing price?

Since the U.S.is organized as a market economy,the government sector does not play a role in economic activity.

National economic policies are usually set by the local government in the U.S.,making it the focus of economic discussions.

The _____ tend to have a smaller public sector relative to the total economy.

Annual expenditures by the federal government exhibited an upward trend,rising from $3 billion in 1930 to more than $1 trillion in 2010.

Economics: The World Around You

Choice, opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

Elasticity: Demand and Supply

Consumer Choice

Supply: The Costs of Doing Business

Profit Maximization

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Market Failures, Government Failures, and Rent Seeking

Resource Markets

The Labor Market

Capital Markets

The Land Market and Natural Resources

Aging, Social Security and Health Care

Income Distribution,Poverty and Government Policy

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

Filters

Exam 4: The Market System and the Private and Public Sector

Firms try to minimize costs and maximize profits and in the process produce:

When the government sector is included in the circular flow diagram,the total value of private production will equal the value of household income.

A trade deficit involves:

Which of the following is true of U.S.net exports prior to the 1960s?

Identify the international organization that makes loans to developing countries.

The figure given below represents the equilibrium price and output in the market for restaurant meals and delivery meals. Figure 4.1 - Refer to Figure 4.1.Identify the impact on the price of Restaurant Meals and Delivery Meals following the direction of the shifts in demand in these two industries.

Which of the following is a defining feature of a multinational firm?

When a household owns shares of stock:

Which of the following economic indicators is used by the World Bank to classify countries as industrial economies or developing countries?

Empirical evidence suggests that the federal budget has remained more or less in surplus between 1990 and 2002.

The government sector sells resource services to households and buys goods and services from firms.

The term consumer sovereignty refers to:

Balance in international trade suggests that:

Which of the following correctly describes the market-clearing price?

Since the U.S.is organized as a market economy,the government sector does not play a role in economic activity.

National economic policies are usually set by the local government in the U.S.,making it the focus of economic discussions.

The _____ tend to have a smaller public sector relative to the total economy.

Annual expenditures by the federal government exhibited an upward trend,rising from $3 billion in 1930 to more than $1 trillion in 2010.

Economics: The World Around You

Choice, opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

Elasticity: Demand and Supply

Consumer Choice

Supply: The Costs of Doing Business

Profit Maximization

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Market Failures, Government Failures, and Rent Seeking

Resource Markets

The Labor Market

Capital Markets

The Land Market and Natural Resources

Aging, Social Security and Health Care

Income Distribution,Poverty and Government Policy

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

Filters