Question 1

-According to the above figure,,then the supply curve will

Accepted Answer

A) shift from S1 to S2. 
B) shift from S2 to S1. 
C) remain at S1. 
D) shift either to the left or the right,but it is impossible to say without more information. 
A) shift from S1 to S2. 
B) shift from S2 to S1. 
C) remain at S1. 
D) shift either to the left or the right,but it is impossible to say without more information.

Question 2

Government spending as a percent of national income

Accepted Answer

A) peaked during the Reagan administration. 
B) peaked during World War II. 
C) has been steadily climbing since 1850. 
D) has been almost constant this century. 
A) peaked during the Reagan administration. 
B) peaked during World War II. 
C) has been steadily climbing since 1850. 
D) has been almost constant this century.

Question 3

Ms.Smith is given a voucher for an apartment in a public housing project.The apartment

Accepted Answer

A) is not subject to the principle of rival consumption. 
B) is not a public good. 
C) has widespread benefits and concentrated costs. 
D) is subject to the exclusion principle. 
A) is not subject to the principle of rival consumption. 
B) is not a public good. 
C) has widespread benefits and concentrated costs. 
D) is subject to the exclusion principle.

Question 4

A transfer payment is a payment

Accepted Answer

A) made by the government to its current workers. 
B) associated with items exported to other nations. 
C) for in-kind services provided to the government. 
D) for which no services or goods are rendered. 
A) made by the government to its current workers. 
B) associated with items exported to other nations. 
C) for in-kind services provided to the government. 
D) for which no services or goods are rendered.

Question 5

The goal of Medicare is to

Accepted Answer

A) help the poor and indigent pay their hospital bills. 
B) prevent poverty in urban cities. 
C) subsidize medical expenses for the elderly. 
D) subsidize costs incurred by doctors. 
A) help the poor and indigent pay their hospital bills. 
B) prevent poverty in urban cities. 
C) subsidize medical expenses for the elderly. 
D) subsidize costs incurred by doctors.

Question 6

Money payments made by governments to individuals for which no services or goods are concurrently rendered are known as

Accepted Answer

A) transfer payments. 
B) government-sponsored payments. 
C) government-inhibited payments. 
D) black market payments. 
A) transfer payments. 
B) government-sponsored payments. 
C) government-inhibited payments. 
D) black market payments.

Question 7

A government-sponsored good is often

Accepted Answer

A) produced by the government. 
B) subsidized. 
C) taxed. 
D) advertised. 
A) produced by the government. 
B) subsidized. 
C) taxed. 
D) advertised.

Question 8

-According to the above figure,if steel mills ignore the cost of pollution,the equilibrium quantity of steel will most likely be

Accepted Answer

A) Q1. 
B) Q2. 
C) Q2 - Q1. 
D) none of the above. 
A) Q1. 
B) Q2. 
C) Q2 - Q1. 
D) none of the above.

Question 9

To correct for the underproduction of products with positive externalities,the government must

Accepted Answer

A) provide the incentives for the private sector to produce and consume the good. 
B) provide tougher regulations on the industry. 
C) increase taxes on the industry. 
D) fine the industry. 
A) provide the incentives for the private sector to produce and consume the good. 
B) provide tougher regulations on the industry. 
C) increase taxes on the industry. 
D) fine the industry.

Question 10

Which law specifically mandated the federal government's responsibility for economy-wide stability?

Accepted Answer

A) The Employment Act of 1946 
B) The Sherman Act of 1890 
C) The Great Depression Act of 1930 
D) The Miller Act of 1960 
A) The Employment Act of 1946 
B) The Sherman Act of 1890 
C) The Great Depression Act of 1930 
D) The Miller Act of 1960

Question 11

The government corrects for externalities in all of the following ways EXCEPT

Accepted Answer

A) taxes. 
B) regulation. 
C) lobbying. 
D) subsidies. 
A) taxes. 
B) regulation. 
C) lobbying. 
D) subsidies.

Question 12

-In the above figure,if a Medicare subsidy that had previously been paid by the government has now been eliminated,the result will be

Accepted Answer

A) an increase in the price received by producers,from $\mathrm { P } _ { 0 }$ to
$\mathrm { P } _ { \mathrm { s } }$ . 
B) a decrease in the price received by producers,from $\mathrm { P } _ { \mathrm { s } }$ to
$\mathrm { P } _ { 0 }$ . 
C) an increase in the price paid by consumers,from $\mathrm { P } _ { 0 }$ to
$\mathrm { P } _ { \mathrm { s } }$ . 
D) a decrease in the price paid by consumers,from $\mathrm { P } _ { \mathrm { s } }$ to
$\mathrm { P } _ { 0 }$ . 
A) an increase in the price received by producers,from $\mathrm { P } _ { 0 }$ to
$\mathrm { P } _ { \mathrm { s } }$ . 
B) a decrease in the price received by producers,from $\mathrm { P } _ { \mathrm { s } }$ to
$\mathrm { P } _ { 0 }$ . 
C) an increase in the price paid by consumers,from $\mathrm { P } _ { 0 }$ to
$\mathrm { P } _ { \mathrm { s } }$ . 
D) a decrease in the price paid by consumers,from $\mathrm { P } _ { \mathrm { s } }$ to
$\mathrm { P } _ { 0 }$ .

Question 13

The major economic effect of Medicare subsidies is

Accepted Answer

A) that the number of physicians has decreased since compensation is low. 
B) to increase the price of medical services and reduce the quantity demanded. 
C) to increase the price of medical services and increase the quantity demanded. 
D) to lower the price of medical services and reduce the quantity demanded. 
A) that the number of physicians has decreased since compensation is low. 
B) to increase the price of medical services and reduce the quantity demanded. 
C) to increase the price of medical services and increase the quantity demanded. 
D) to lower the price of medical services and reduce the quantity demanded.

Question 14

-Refer to above figure in which negative externality existed.The government imposes a $1.00 pollution tax on the producer.Supply shifts leftward.

Accepted Answer

A) This tax will be shifted entirely to the consumer. 
B) This tax will be borne entirely by the producer. 
C) The amount of the tax shifted to the consumer depends on the consumer's reaction. 
D) The tax will be divided into equal amounts between consumer and producer. 
A) This tax will be shifted entirely to the consumer. 
B) This tax will be borne entirely by the producer. 
C) The amount of the tax shifted to the consumer depends on the consumer's reaction. 
D) The tax will be divided into equal amounts between consumer and producer.

Question 15

Orchards provide services to beekeepers because the bees use the pollen to make honey.This is an example of

Accepted Answer

A) a positive externality,and too many orchards exist in society. 
B) a positive externality,and too few orchards exist in society. 
C) a negative externality,and too many orchards exist in society. 
D) a negative externality,and too few orchards exist in society. 
A) a positive externality,and too many orchards exist in society. 
B) a positive externality,and too few orchards exist in society. 
C) a negative externality,and too many orchards exist in society. 
D) a negative externality,and too few orchards exist in society.

Question 16

Which of the following statements about public education is TRUE?

Accepted Answer

A) Over the last 40 years,there has been an increase in spending for public education,while there has not been a significant increase in performance. 
B) Over the last 40 years,there has been a decrease in public spending for public education,while there has not been a significant increase in performance. 
C) Most of the increases in public spending on public education have gone into programs that have increased student learning. 
D) Over the last 40 years there has been no decline in any of the measures of student performance in public education. 
A) Over the last 40 years,there has been an increase in spending for public education,while there has not been a significant increase in performance. 
B) Over the last 40 years,there has been a decrease in public spending for public education,while there has not been a significant increase in performance. 
C) Most of the increases in public spending on public education have gone into programs that have increased student learning. 
D) Over the last 40 years there has been no decline in any of the measures of student performance in public education.

Question 17

The distinguishing characteristic of private goods is that

Accepted Answer

A) the principle of rival consumption does not apply to them. 
B) their use is exclusive to the people who purchase them. 
C) they can be sold but not rented. 
D) they can be sold or rented,but not borrowed. 
A) the principle of rival consumption does not apply to them. 
B) their use is exclusive to the people who purchase them. 
C) they can be sold but not rented. 
D) they can be sold or rented,but not borrowed.

Question 18

A government subsidy is typically used

Accepted Answer

A) to correct a negative externality. 
B) to provide a government-inhibited good. 
C) to reduce inflation. 
D) to correct a positive externality. 
A) to correct a negative externality. 
B) to provide a government-inhibited good. 
C) to reduce inflation. 
D) to correct a positive externality.

Question 19

A government-sponsored good is one that

Accepted Answer

A) everybody is willing to support with funding contributions. 
B) is inherently valuable. 
C) the political process has determined socially desirable. 
D) everybody will receive concrete benefits from. 
A) everybody is willing to support with funding contributions. 
B) is inherently valuable. 
C) the political process has determined socially desirable. 
D) everybody will receive concrete benefits from.

Question 20

An externality can best be defined as

Accepted Answer

A) a party not directly involved in a transaction. 
B) a consequence of a transaction that spills over to affect third parties. 
C) a right of an owner to use and exchange property. 
D) a cost associated with the production of one more unit of output. 
A) a party not directly involved in a transaction. 
B) a consequence of a transaction that spills over to affect third parties. 
C) a right of an owner to use and exchange property. 
D) a cost associated with the production of one more unit of output.

Exam 4: Public Spending and Public Choice

-According to the above figure,,then the supply curve will

Government spending as a percent of national income

Ms.Smith is given a voucher for an apartment in a public housing project.The apartment

A transfer payment is a payment

The goal of Medicare is to

Money payments made by governments to individuals for which no services or goods are concurrently rendered are known as

A government-sponsored good is often

-According to the above figure,if steel mills ignore the cost of pollution,the equilibrium quantity of steel will most likely be

To correct for the underproduction of products with positive externalities,the government must

Which law specifically mandated the federal government's responsibility for economy-wide stability?

The government corrects for externalities in all of the following ways EXCEPT

-In the above figure,if a Medicare subsidy that had previously been paid by the government has now been eliminated,the result will be

The major economic effect of Medicare subsidies is

-Refer to above figure in which negative externality existed.The government imposes a $1.00 pollution tax on the producer.Supply shifts leftward.

Orchards provide services to beekeepers because the bees use the pollen to make honey.This is an example of

Which of the following statements about public education is TRUE?

The distinguishing characteristic of private goods is that

A government subsidy is typically used

A government-sponsored good is one that

An externality can best be defined as

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Funding the Public Sector

Demand and Supply Elasticity

Consumer Choice

Rents, profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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