Question 1

Statement I: Capitalism is based on trust. Statement II: Capitalism is often confused with democracy.

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 2

The person responsible for beginning to privatize China's economy since the mid-1970s is

Accepted Answer

A) Deng Xiaoping. 
B) Mao Tse-tung. 
C) Sun Yat-sen. 
D) Chiang Kai-shek. 
A) Deng Xiaoping. 
B) Mao Tse-tung. 
C) Sun Yat-sen. 
D) Chiang Kai-shek.

Question 3

In a pure capitalist economy, "what to produce" is determined by

Accepted Answer

A) government central planning committees. 
B) the price mechanism. 
C) the credo: "Each according to his ability, to each according to his needs". 
D) all of the choices are true. 
A) government central planning committees. 
B) the price mechanism. 
C) the credo: "Each according to his ability, to each according to his needs". 
D) all of the choices are true.

Question 4

Communist theory calls for each of the following except

Accepted Answer

A) the abolition of private property. 
B) from each according to his ability, to each according to his needs. 
C) the free operation of the forces of demand and supply. 
D) the means of production owned by the government and/or by the workers. 
A) the abolition of private property. 
B) from each according to his ability, to each according to his needs. 
C) the free operation of the forces of demand and supply. 
D) the means of production owned by the government and/or by the workers.

Question 5

A four dollar tax on a gallon of gasoline would

Accepted Answer

A) lower gasoline consumption and lower air pollution. 
B) lower gasoline consumption and raise air pollution. 
C) raise gasoline consumption and raise air pollution. 
D) raise gasoline consumption and lower air pollution. 
A) lower gasoline consumption and lower air pollution. 
B) lower gasoline consumption and raise air pollution. 
C) raise gasoline consumption and raise air pollution. 
D) raise gasoline consumption and lower air pollution.

Question 6

Having the government issue permits that allow polluting

Accepted Answer

A) would increase the levels of pollution. 
B) is a measure used all over the world, but not in the United States. 
C) would allow companies that are better at curbing their pollution to sell the permits to companies that are not as good at curbing their pollution. 
D) has been very ineffective in curbing pollution. 
A) would increase the levels of pollution. 
B) is a measure used all over the world, but not in the United States. 
C) would allow companies that are better at curbing their pollution to sell the permits to companies that are not as good at curbing their pollution. 
D) has been very ineffective in curbing pollution.

Question 7

Which does not fit with the others?

Accepted Answer

A) Competition 
B) Government planning and regulation 
C) The invisible hand 
D) The price mechanism 
A) Competition 
B) Government planning and regulation 
C) The invisible hand 
D) The price mechanism

Question 8

In the former Soviet Union,

Accepted Answer

A) the collective farms were more productive per acre than the private plots of land owned by peasants. 
B) there was no private ownership of any farmland. 
C) the private plots of land were more productive per acre than the large collective farms. 
D) the land under cultivation was equally split between private plots of land and the collective farms. 
A) the collective farms were more productive per acre than the private plots of land owned by peasants. 
B) there was no private ownership of any farmland. 
C) the private plots of land were more productive per acre than the large collective farms. 
D) the land under cultivation was equally split between private plots of land and the collective farms.

Question 9

The U.S. economy does a very good job with respect to

Accepted Answer

A) both equity and efficiency. 
B) equity, but not efficiency. 
C) efficiency, but not equity. 
D) neither equity nor efficiency. 
A) both equity and efficiency. 
B) equity, but not efficiency. 
C) efficiency, but not equity. 
D) neither equity nor efficiency.

Question 10

The major shortcoming of fuel economy standards is that they do not apply to ___________________.

Accepted Answer

The answer of The major shortcoming of fuel economy standards...

Question 11

In the circular flow model, households

Accepted Answer

A) demand resources and supply products. 
B) demand products and supply resources. 
C) demand both resources and products. 
D) supply both resources and products. 
A) demand resources and supply products. 
B) demand products and supply resources. 
C) demand both resources and products. 
D) supply both resources and products.

Question 12

The United States is an example of a ______________ economy.

Accepted Answer

The answer of The United States is an example of...

Question 13

Karl Marx and Friedrich Engels said

Accepted Answer

A) "The theory of the Communists may be summed up in the single sentence: Abolition of private property." 
B) "The vice of capitalism is that it stands for the unequal sharing of blessings; whereas the virtue of socialism is that it stands for the equal sharing of misery." 
C) "It is not the employer who pays wages-he only handles the money.It is the product that pays wages." 
D) "Capital is past savings accumulated for future production." 
A) "The theory of the Communists may be summed up in the single sentence: Abolition of private property." 
B) "The vice of capitalism is that it stands for the unequal sharing of blessings; whereas the virtue of socialism is that it stands for the equal sharing of misery." 
C) "It is not the employer who pays wages-he only handles the money.It is the product that pays wages." 
D) "Capital is past savings accumulated for future production."

Question 14

Adam Smith believed that the best way to promote the public interest was to

Accepted Answer

A) have the government produce most goods and services. 
B) let people pursue their own selfish interests. 
C) wait for individuals to set out to promote the public interest. 
D) get rid of the price mechanism. 
A) have the government produce most goods and services. 
B) let people pursue their own selfish interests. 
C) wait for individuals to set out to promote the public interest. 
D) get rid of the price mechanism.

Question 15

Modern mixed economies

Accepted Answer

A) generally alter the outcome of market processes in a manner that is believed to be in the social interest. 
B) attempt to redistribute income to make the distribution of income more equitable. 
C) rely on the government as well as the market to effect the distribution of goods and services. 
D) undertake all of the actions listed. 
A) generally alter the outcome of market processes in a manner that is believed to be in the social interest. 
B) attempt to redistribute income to make the distribution of income more equitable. 
C) rely on the government as well as the market to effect the distribution of goods and services. 
D) undertake all of the actions listed.

Question 16

Externalities may be internalized by

Accepted Answer

A) government-imposed taxes and subsidies. 
B) regulation. 
C) legal rules and procedures. 
D) bargaining and negotiation. 
E) All of the choices are correct. 
A) government-imposed taxes and subsidies. 
B) regulation. 
C) legal rules and procedures. 
D) bargaining and negotiation. 
E) All of the choices are correct.

Question 17

Statement I. We have market failure when our resources are not allocated efficiently. Statement II. An oil refinery incurs both private and social (or external) costs.

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 18

Under capitalism the role of government is best described as

Accepted Answer

A) Nonexistent. 
B) Limited. 
C) Significant. 
D) Extensive. 
A) Nonexistent. 
B) Limited. 
C) Significant. 
D) Extensive.

Question 19

Statement I: Bringing home as much federal money as possible to get reelected is the equivalent of the quest for profits that motivates business owners. Statement II: One example of a government failure has been the deterioration of the American elementary, middle and high school system the last few decades.

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 20

Which is the most accurate statement?

Accepted Answer

A) Most taxes aimed at curbing pollution are completely ineffective. 
B) Pollution is a moral problem, and cannot be curbed by public policy. 
C) Air pollution is a much more serious problem than it was ten years ago. 
D) Public policy is much more accustomed to environmental concerns than it was 40 years ago. 
A) Most taxes aimed at curbing pollution are completely ineffective. 
B) Pollution is a moral problem, and cannot be curbed by public policy. 
C) Air pollution is a much more serious problem than it was ten years ago. 
D) Public policy is much more accustomed to environmental concerns than it was 40 years ago.

Statement I: Capitalism is based on trust. Statement II: Capitalism is often confused with democracy.

The person responsible for beginning to privatize China's economy since the mid-1970s is

In a pure capitalist economy, "what to produce" is determined by

Communist theory calls for each of the following except

A four dollar tax on a gallon of gasoline would

Having the government issue permits that allow polluting

Which does not fit with the others?

In the former Soviet Union,

The U.S. economy does a very good job with respect to

The major shortcoming of fuel economy standards is that they do not apply to ___________________.

In the circular flow model, households

The United States is an example of a ______________ economy.

Karl Marx and Friedrich Engels said

Adam Smith believed that the best way to promote the public interest was to

Modern mixed economies

Externalities may be internalized by

Statement I. We have market failure when our resources are not allocated efficiently. Statement II. An oil refinery incurs both private and social (or external) costs.

Under capitalism the role of government is best described as

Which is the most accurate statement?

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

Statement I: Capitalism is based on trust. Statement II: Capitalism is often confused with democracy.

The person responsible for beginning to privatize China's economy since the mid-1970s is

In a pure capitalist economy, "what to produce" is determined by

Communist theory calls for each of the following except

A four dollar tax on a gallon of gasoline would

Having the government issue permits that allow polluting

Which does not fit with the others?

In the former Soviet Union,

The U.S. economy does a very good job with respect to

The major shortcoming of fuel economy standards is that they do not apply to ___________________.

In the circular flow model, households

The United States is an example of a ______________ economy.

Karl Marx and Friedrich Engels said

Adam Smith believed that the best way to promote the public interest was to

Modern mixed economies

Externalities may be internalized by

Statement I. We have market failure when our resources are not allocated efficiently. Statement II. An oil refinery incurs both private and social (or external) costs.

Under capitalism the role of government is best described as

Which is the most accurate statement?

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