Question 1

When the government determines the permissible level of pollution and issues permits to each polluting firm, this is a form of

Accepted Answer

A) incentive-based regulation. 
B) command-and-control regulation. 
C) tax on pollution. 
D) government barrier to the workings of demand and supply. 
A) incentive-based regulation. 
B) command-and-control regulation. 
C) tax on pollution. 
D) government barrier to the workings of demand and supply.

Question 2

Which of the following statements is false?

Accepted Answer

A) One of the basic principles capitalism is based on is to "trust no one." 
B) To have real competition in a market economy no one business should be able to have any influence over price. 
C) A basic trade-off exists between the goals of equity and efficiency for a society. 
D) The forces of supply and demand will NOT automatically lead to an equitable distribution of income. 
A) One of the basic principles capitalism is based on is to "trust no one." 
B) To have real competition in a market economy no one business should be able to have any influence over price. 
C) A basic trade-off exists between the goals of equity and efficiency for a society. 
D) The forces of supply and demand will NOT automatically lead to an equitable distribution of income.

Question 3

Which statement is false?

Accepted Answer

A) Under our economic system, most of the important decisions are made in the market place. 
B) In our economy the price mechanism determines the answers to our three basic questions-what, how, and for whom. 
C) Most economists would agree that the price system leads to a very efficient allocation of resources. 
D) None of these statements are false. 
A) Under our economic system, most of the important decisions are made in the market place. 
B) In our economy the price mechanism determines the answers to our three basic questions-what, how, and for whom. 
C) Most economists would agree that the price system leads to a very efficient allocation of resources. 
D) None of these statements are false.

Question 4

Statement I. Pollution is an example of market failure. Statement II. Externalities can be costs or benefits.

Accepted Answer

A) Statement I is true and statement II is false. 
B) Statement II is true and statement I is false. 
C) Both statements are true. 
D) Both statements are false. 
A) Statement I is true and statement II is false. 
B) Statement II is true and statement I is false. 
C) Both statements are true. 
D) Both statements are false.

Question 5

In the circular flow diagram, households supply __________ to business firms.

Accepted Answer

The answer of In the circular flow diagram, households supply...

Question 6

Under the old Soviet communist system, government planning was substituted for the ________________.

Accepted Answer

The answer of Under the old Soviet communist system, government...

Question 7

When you paint the outside of your house, you not only enjoy a private benefit for yourself, but you also provide a(n) __________________ benefit.

Accepted Answer

The answer of When you paint the outside of your...

Question 8

When our resources are NOT allocated efficiently, we have _______________.

Accepted Answer

A) answered the basic economic questions 
B) a market failure 
C) a government failure 
D) market equity 
A) answered the basic economic questions 
B) a market failure 
C) a government failure 
D) market equity

Question 9

Capitalism is based on all of the following except

Accepted Answer

A) the "invisible hand." 
B) the price mechanism. 
C) trust. 
D) equity. 
A) the "invisible hand." 
B) the price mechanism. 
C) trust. 
D) equity.

Question 10

The invisible hand is closely related to each of the following, except

Accepted Answer

A) supply and demand. 
B) the price mechanism. 
C) greed. 
D) competition. 
E) fairness or equity. 
A) supply and demand. 
B) the price mechanism. 
C) greed. 
D) competition. 
E) fairness or equity.

Question 11

The Chinese economy has embarked on a large-scale process of privatization since

Accepted Answer

A) 1949. 
B) The mid-1950s. 
C) The mid-1960s. 
D) The late 1970s. 
E) The late 1980s. 
A) 1949. 
B) The mid-1950s. 
C) The mid-1960s. 
D) The late 1970s. 
E) The late 1980s.

Question 12

Statement I. There are several public goods that were once privately produced. Statement II. National defense is a public good.

Accepted Answer

A) Statement I is true and statement II is false. 
B) Statement II is true and statement I is false. 
C) Both statements are true. 
D) Both statements are false. 
A) Statement I is true and statement II is false. 
B) Statement II is true and statement I is false. 
C) Both statements are true. 
D) Both statements are false.

Question 13

Which of the following is NOT a characteristic of the capitalist form of economic organization?

Accepted Answer

A) Central planning. 
B) A reliance on decentralized market processes for resource allocation purposes. 
C) Private ownership of productive resources. 
D) All of the choices are true. 
A) Central planning. 
B) A reliance on decentralized market processes for resource allocation purposes. 
C) Private ownership of productive resources. 
D) All of the choices are true.

Question 14

An example of a public good is

Accepted Answer

A) national defense. 
B) a lighthouse. 
C) flood control protection from the Tennessee Valley Authority (TV
A) . 
D) police protection. 
E) All of the choices are examples of a public good. 
A) national defense. 
B) a lighthouse. 
C) flood control protection from the Tennessee Valley Authority (TV
A) . 
D) police protection. 
E) All of the choices are examples of a public good.

Question 15

Sweden and Norway would best be described as _______ countries.

Accepted Answer

A) Capitalist 
B) Fascist 
C) Communist 
D) Socialist 
A) Capitalist 
B) Fascist 
C) Communist 
D) Socialist

Question 16

Private ownership of most of the means of production is common to

Accepted Answer

A) capitalism and communism. 
B) capitalism and fascism. 
C) capitalism and socialism. 
D) fascism and communism. 
A) capitalism and communism. 
B) capitalism and fascism. 
C) capitalism and socialism. 
D) fascism and communism.

Question 17

The __________________ traces the flow of money, resources, and goods and services through the economy.

Accepted Answer

The answer of The __________________ traces the flow of money,...

Question 18

Which of the following is NOT an example of an externality?

Accepted Answer

A) The development of a vaccine for preventing SARS. 
B) Gas prices that rise in the summer due to increased vacation travel. 
C) Shipbreaking that industrial nations have exported to less developed countries. 
D) A factory that dumps dangerous chemicals into Lake Erie. 
A) The development of a vaccine for preventing SARS. 
B) Gas prices that rise in the summer due to increased vacation travel. 
C) Shipbreaking that industrial nations have exported to less developed countries. 
D) A factory that dumps dangerous chemicals into Lake Erie.

Question 19

An example of a public good is

Accepted Answer

A) a concert by renowned country music star George Strait. 
B) a good that can be used exclusively by one consumer only. 
C) a local free fireworks display. 
D) a café latte at Starbucks. 
A) a concert by renowned country music star George Strait. 
B) a good that can be used exclusively by one consumer only. 
C) a local free fireworks display. 
D) a café latte at Starbucks.

Question 20

The prediction of the overthrow of capitalism was made by

Accepted Answer

A) John Maynard Keynes. 
B) Adam Smith. 
C) Mikhail Gorbachev. 
D) Holden Caufield. 
E) Karl Marx. 
A) John Maynard Keynes. 
B) Adam Smith. 
C) Mikhail Gorbachev. 
D) Holden Caufield. 
E) Karl Marx.

When the government determines the permissible level of pollution and issues permits to each polluting firm, this is a form of

Which of the following statements is false?

Which statement is false?

Statement I. Pollution is an example of market failure. Statement II. Externalities can be costs or benefits.

In the circular flow diagram, households supply __________ to business firms.

Under the old Soviet communist system, government planning was substituted for the ________________.

When you paint the outside of your house, you not only enjoy a private benefit for yourself, but you also provide a(n) __________________ benefit.

When our resources are NOT allocated efficiently, we have _______________.

Capitalism is based on all of the following except

The invisible hand is closely related to each of the following, except

The Chinese economy has embarked on a large-scale process of privatization since

Statement I. There are several public goods that were once privately produced. Statement II. National defense is a public good.

Which of the following is NOT a characteristic of the capitalist form of economic organization?

An example of a public good is

Sweden and Norway would best be described as _______ countries.

Private ownership of most of the means of production is common to

The __________________ traces the flow of money, resources, and goods and services through the economy.

Which of the following is NOT an example of an externality?

An example of a public good is

The prediction of the overthrow of capitalism was made by

A Brief Economic History of the United States

Resource Utilization

Supply and Demand

Demand, Supply, and Equilibrium

The Price Elasticities of Demand and Supply

Theory of Consumer Behavior

Cost

Profit, Loss, and Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Corporate Mergers and Antitrust

Demand in the Factor Market

Labor Unions

Labor Markets and Wage Rates

Rent, Interest, and Profit

Income Distribution and Poverty

International Trade

International Finance

Filters

Exam 3: The Mixed Economy

When the government determines the permissible level of pollution and issues permits to each polluting firm, this is a form of

Which of the following statements is false?

Which statement is false?

Statement I. Pollution is an example of market failure. Statement II. Externalities can be costs or benefits.

In the circular flow diagram, households supply __________ to business firms.

Under the old Soviet communist system, government planning was substituted for the ________________.

When you paint the outside of your house, you not only enjoy a private benefit for yourself, but you also provide a(n) __________________ benefit.

When our resources are NOT allocated efficiently, we have _______________.

Capitalism is based on all of the following except

The invisible hand is closely related to each of the following, except

The Chinese economy has embarked on a large-scale process of privatization since

Statement I. There are several public goods that were once privately produced. Statement II. National defense is a public good.

Which of the following is NOT a characteristic of the capitalist form of economic organization?

An example of a public good is

Sweden and Norway would best be described as _______ countries.

Private ownership of most of the means of production is common to

The __________________ traces the flow of money, resources, and goods and services through the economy.

Which of the following is NOT an example of an externality?

An example of a public good is

The prediction of the overthrow of capitalism was made by

A Brief Economic History of the United States

Resource Utilization

Supply and Demand

Demand, Supply, and Equilibrium

The Price Elasticities of Demand and Supply

Theory of Consumer Behavior

Cost

Profit, Loss, and Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Corporate Mergers and Antitrust

Demand in the Factor Market

Labor Unions

Labor Markets and Wage Rates

Rent, Interest, and Profit

Income Distribution and Poverty

International Trade

International Finance

Filters