Question 1

A disadvantage of the corporate form of business organization is that corporate income is taxed twice.

Accepted Answer

A) True 
 B)False  True

Question 2

The movement in U.S. population from the farms to urban areas was caused primarily by

Accepted Answer

A) each member of a farm family specializing in a particular set of tasks 
B) a sharp increase in farm productivity 
C) a decline in the demand for labor in urban areas 
D) a sharp decline in the demand for agricultural products 
E) increased education among married women 
A) each member of a farm family specializing in a particular set of tasks 
B) a sharp increase in farm productivity 
C) a decline in the demand for labor in urban areas 
D) a sharp decline in the demand for agricultural products 
E) increased education among married women B

Question 3

In terms of the numbers of firms in the U.S. economy, the most common type of firm is the

Accepted Answer

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

Question 4

An import quota taxes an import but does not set a limit on how much may be imported.

Accepted Answer

A) True 
 B)False

Question 5

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 6

Which of the following is a defining characteristic of a public good?

Accepted Answer

A) It is produced and distributed by the government. 
B) The decision to produce it is made by the public through the voting process. 
C) It is produced and distributed by private firms according to government regulations. 
D) It is freely available to everyone once it is produced. 
E) It is purchased by one government agency from another government agency. 
A) It is produced and distributed by the government. 
B) The decision to produce it is made by the public through the voting process. 
C) It is produced and distributed by private firms according to government regulations. 
D) It is freely available to everyone once it is produced. 
E) It is purchased by one government agency from another government agency.

Question 7

Since 1930, U.S. government spending as a percent of GDP has

Accepted Answer

A) increased 
B) decreased 
C) stayed the same 
D) showed no particular trend 
E) increased by the same percent each year 
A) increased 
B) decreased 
C) stayed the same 
D) showed no particular trend 
E) increased by the same percent each year

Question 8

Christina Sierra developed software that she made available for zero cost and allowed others to modify and redistribute it to anyone. Such software is known by the term

Accepted Answer

A) free 
B) junk 
C) copyrighted 
D) closed 
E) hobby-ware 
A) free 
B) junk 
C) copyrighted 
D) closed 
E) hobby-ware

Question 9

Suppose you own a proprietorship that is in serious financial difficulty. The assets of the company are $100,000, but liabilities are $175,000. You also have, however, stock in General Motors worth $200,000. If you file bankruptcy, what amount of personal assets do you stand to lose?

Accepted Answer

A) $100,000 
B) $75,000 
C) $200,000 
D) $275,000 
E) $375,000 
A) $100,000 
B) $75,000 
C) $200,000 
D) $275,000 
E) $375,000

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

A public good is one that is supplied to

Accepted Answer

A) only people who pay for it 
B) only people who do not pay for it 
C) all people, regardless of whether they pay or not 
D) the government from private firms 
E) foreign governments from our federal government 
A) only people who pay for it 
B) only people who do not pay for it 
C) all people, regardless of whether they pay or not 
D) the government from private firms 
E) foreign governments from our federal government

Question 12

Often trade will not occur because

Accepted Answer

A) transaction costs are too high 
B) neither party has an opportunity cost 
C) the benefits to one party just equal the losses to the other party 
D) no one expects to gain from the trade 
E) the profits of the firm are excessive 
A) transaction costs are too high 
B) neither party has an opportunity cost 
C) the benefits to one party just equal the losses to the other party 
D) no one expects to gain from the trade 
E) the profits of the firm are excessive

Question 13

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 14

Two important roles of government in the economy are to safeguard private property and enforce contracts.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is a justification for taxes?

Accepted Answer

A) the ability-to-pay principle 
B) the progressive tax principle 
C) the proportional tax principle 
D) the regressive tax principle 
E) the desire of the government to spend more funds 
A) the ability-to-pay principle 
B) the progressive tax principle 
C) the proportional tax principle 
D) the regressive tax principle 
E) the desire of the government to spend more funds

Question 16

Federal individual income taxes illustrate the ability-to-pay principle of taxation.

Accepted Answer

A) True 
 B)False

Question 17

In recent years defense expenditures has fallen as a share of federal government outlays.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is a result of increased real wages in the United States?

Accepted Answer

A) a decrease in the quantity of services demanded by households 
B) an increase in the opportunity cost of remaining employed in the home 
C) a decrease in the opportunity cost of working outside the home 
D) a decline in the number of households providing labor outside the home 
E) reduced use of labor-saving devices in households 
A) a decrease in the quantity of services demanded by households 
B) an increase in the opportunity cost of remaining employed in the home 
C) a decrease in the opportunity cost of working outside the home 
D) a decline in the number of households providing labor outside the home 
E) reduced use of labor-saving devices in households

Question 19

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 20

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

Accepted Answer

A) True 
 B)False

Exam 3: Economic Decision Makers

A disadvantage of the corporate form of business organization is that corporate income is taxed twice.

The movement in U.S. population from the farms to urban areas was caused primarily by

In terms of the numbers of firms in the U.S. economy, the most common type of firm is the

An import quota taxes an import but does not set a limit on how much may be imported.

Taxes collected on the basis of the benefits-received principle

Which of the following is a defining characteristic of a public good?

Since 1930, U.S. government spending as a percent of GDP has

Christina Sierra developed software that she made available for zero cost and allowed others to modify and redistribute it to anyone. Such software is known by the term

Suppose you own a proprietorship that is in serious financial difficulty. The assets of the company are $100,000, but liabilities are $175,000. You also have, however, stock in General Motors worth $200,000. If you file bankruptcy, what amount of personal assets do you stand to lose?

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

A public good is one that is supplied to

Often trade will not occur because

Nonprofit, or not-for-profit, firms

Two important roles of government in the economy are to safeguard private property and enforce contracts.

Which of the following is a justification for taxes?

Federal individual income taxes illustrate the ability-to-pay principle of taxation.

In recent years defense expenditures has fallen as a share of federal government outlays.

Which of the following is a result of increased real wages in the United States?

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

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

The Art and Science of Economic Analysis

Economic Tools and Economics Systems

Demand Supply and Markets

Introduction to Macroeconomics

Tracking the Us Economy

Unemployment and Inflation

Productivity and Growth

Aggregate Expenditure

Aggregate Expenditure and Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

The Algebra of Income and Expenditure

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

The Algebra of Demand-Side Equilibrium

International Trade

International Finance

Economic Development

National Income Accounts

Understanding Graphs

Variable Net Exports

Variable Net Exports Revisited

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