Question 1

All of the following countries have been described as socialist economies, except

Accepted Answer

A) Norway 
B) France 
C) Sweden 
D) The United States 
A) Norway 
B) France 
C) Sweden 
D) The United States

Question 2

Which statement about competition is true?

Accepted Answer

A) To have competition, no firm is large enough to have any influence over price. 
B) American industry is very competitive. 
C) The American automobile industry would be considered competitive if there were at least four firms in the industry. 
D) There is no competition in American industry. 
A) To have competition, no firm is large enough to have any influence over price. 
B) American industry is very competitive. 
C) The American automobile industry would be considered competitive if there were at least four firms in the industry. 
D) There is no competition in American industry.

Question 3

Under communism, _____________ owns and operates most of the means of production and distribution.

Accepted Answer

The answer of Under communism, _____________ owns and operates most...

Question 4

The price system is based on the law of _________________.

Accepted Answer

The answer of The price system is based on the...

Question 5

Raising taxes on gasoline __________ the price of gasoline and __________ the number of gallons purchased.

Accepted Answer

The answer of Raising taxes on gasoline __________ the price...

Question 6

Statement I: Karl Marx would have approved of the form communism took in the former Soviet Union. Statement II: The two largest communist countries, China and the former Soviet Union, turned their backs on communism and became largely capitalist economies.

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 7

Suppose a business firm dumps its used car batteries into the Mississippi River.

Accepted Answer

A) The company's actions constitute an external cost. 
B) The company's actions constitute an external benefit. 
C) The company's actions would be an example of the market system efficiently allocating resources. 
D) The company's actions damage no one but itself. 
A) The company's actions constitute an external cost. 
B) The company's actions constitute an external benefit. 
C) The company's actions would be an example of the market system efficiently allocating resources. 
D) The company's actions damage no one but itself.

Question 8

National defense is an example of a ____________________.

Accepted Answer

The answer of National defense is an example of a...

Question 9

Which of the following statements is not true?

Accepted Answer

A) Our government alters how resources are allocated in the economy by taxing, spending and issuing regulations. 
B) The price mechanism will work best if there are a limited number of firms in each industry. 
C) Lack of the provision of public goods is considered a market failure. 
D) Not everything produced by the public sector is a public good. 
A) Our government alters how resources are allocated in the economy by taxing, spending and issuing regulations. 
B) The price mechanism will work best if there are a limited number of firms in each industry. 
C) Lack of the provision of public goods is considered a market failure. 
D) Not everything produced by the public sector is a public good.

Question 10

Each of the following is an example of the price mechanism at work, except when

Accepted Answer

A) wage and price controls were used during World War II to control inflation. 
B) consumers curtailed driving their cars when the price of gasoline increased dramatically in 2005. 
C) American farmers during World War I expanded production on previously unused land in response to higher crop prices. 
D) factories of gas-guzzling automobiles shut down when the price of gasoline triples in less than three months. 
A) wage and price controls were used during World War II to control inflation. 
B) consumers curtailed driving their cars when the price of gasoline increased dramatically in 2005. 
C) American farmers during World War I expanded production on previously unused land in response to higher crop prices. 
D) factories of gas-guzzling automobiles shut down when the price of gasoline triples in less than three months.

Question 11

The most glaring economic problem in the former Soviet Union was

Accepted Answer

A) a shortage of military goods 
B) a surplus of military goods 
C) a shortage of civilian goods 
D) a surplus of civilian goods 
A) a shortage of military goods 
B) a surplus of military goods 
C) a shortage of civilian goods 
D) a surplus of civilian goods

Question 12

Externalities consist of ___________________.

Accepted Answer

A) only external costs 
B) only external benefits 
C) both external costs and external benefits 
A) only external costs 
B) only external benefits 
C) both external costs and external benefits

Question 13

Statement I. Market failure rarely happens under capitalism. Statement II. One remedy for market failure is public goods and services.

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 14

The price mechanism deals _____ with the issue of an equitable income distribution and ____ with the issue of efficiency.

Accepted Answer

A) well; well 
B) poorly; poorly 
C) well; poorly 
D) poorly; well 
A) well; well 
B) poorly; poorly 
C) well; poorly 
D) poorly; well

Question 15

One of the characteristics of a command economy is

Accepted Answer

A) free enterprise. 
B) complex markets. 
C) the pursuits by individual and firms of their own self-interest without any central direction or regulation. 
D) central planning. 
A) free enterprise. 
B) complex markets. 
C) the pursuits by individual and firms of their own self-interest without any central direction or regulation. 
D) central planning.

Question 16

There has been a marked reduction in air pollution since ________________.

Accepted Answer

The answer of There has been a marked reduction in...

Question 17

Which statement is true?

Accepted Answer

A) Externalities and public goods are basic classes of market failure. 
B) Externalities, but not public goods, is a basic class of market failure. 
C) Public goods, but not externalities, is a basic class of market failure. 
D) Neither public goods nor externalities are basic classes of market failure. 
A) Externalities and public goods are basic classes of market failure. 
B) Externalities, but not public goods, is a basic class of market failure. 
C) Public goods, but not externalities, is a basic class of market failure. 
D) Neither public goods nor externalities are basic classes of market failure.

Question 18

"The invisible hand" is really the ___________.

Accepted Answer

The answer of "The invisible hand" is really the ___________....

Question 19

Suppose you live in the suburbs and dump your garbage on your front lawn on a daily basis.

Accepted Answer

A) Your actions hurt no one but yourself. 
B) Your actions constitute an external cost to your neighbors. 
C) Your actions constitute an external benefit to your neighbors. 
D) Your actions would not be considered a market failure. 
A) Your actions hurt no one but yourself. 
B) Your actions constitute an external cost to your neighbors. 
C) Your actions constitute an external benefit to your neighbors. 
D) Your actions would not be considered a market failure.

Question 20

The goals of equity and ________________ are sometimes in conflict.

Accepted Answer

A) fairness 
B) efficiency 
C) capital 
A) fairness 
B) efficiency 
C) capital

All of the following countries have been described as socialist economies, except

Which statement about competition is true?

Under communism, _____________ owns and operates most of the means of production and distribution.

The price system is based on the law of _________________.

Raising taxes on gasoline the price of gasoline and the number of gallons purchased.

Statement I: Karl Marx would have approved of the form communism took in the former Soviet Union. Statement II: The two largest communist countries, China and the former Soviet Union, turned their backs on communism and became largely capitalist economies.

Suppose a business firm dumps its used car batteries into the Mississippi River.

National defense is an example of a ____________________.

Which of the following statements is not true?

Each of the following is an example of the price mechanism at work, except when

The most glaring economic problem in the former Soviet Union was

Externalities consist of ___________________.

Statement I. Market failure rarely happens under capitalism. Statement II. One remedy for market failure is public goods and services.

The price mechanism deals _ with the issue of an equitable income distribution and with the issue of efficiency.

One of the characteristics of a command economy is

There has been a marked reduction in air pollution since ________________.

Which statement is true?

"The invisible hand" is really the ___________.

Suppose you live in the suburbs and dump your garbage on your front lawn on a daily basis.

The goals of equity and ________________ are sometimes in conflict.

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

All of the following countries have been described as socialist economies, except

Which statement about competition is true?

Under communism, _____________ owns and operates most of the means of production and distribution.

The price system is based on the law of _________________.

Raising taxes on gasoline __________ the price of gasoline and __________ the number of gallons purchased.

Statement I: Karl Marx would have approved of the form communism took in the former Soviet Union. Statement II: The two largest communist countries, China and the former Soviet Union, turned their backs on communism and became largely capitalist economies.

Suppose a business firm dumps its used car batteries into the Mississippi River.

National defense is an example of a ____________________.

Which of the following statements is not true?

Each of the following is an example of the price mechanism at work, except when

The most glaring economic problem in the former Soviet Union was

Externalities consist of ___________________.

Statement I. Market failure rarely happens under capitalism. Statement II. One remedy for market failure is public goods and services.

The price mechanism deals _____ with the issue of an equitable income distribution and ____ with the issue of efficiency.

One of the characteristics of a command economy is

There has been a marked reduction in air pollution since ________________.

Which statement is true?

"The invisible hand" is really the ___________.

Suppose you live in the suburbs and dump your garbage on your front lawn on a daily basis.

The goals of equity and ________________ are sometimes in conflict.

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

Raising taxes on gasoline the price of gasoline and the number of gallons purchased.

The price mechanism deals _ with the issue of an equitable income distribution and with the issue of efficiency.