Question 1

Which statement is true?

Accepted Answer

A) In China today,the private sector produces no more than 10% of the country's goods and services. 
B) Under communism in the Soviet Union,the private sector was almost as large as the government sector. 
C) In the American economy today,the public sector is almost as large as the private sector. 
D) All of the statements are true. 
E) None of the statements are true.

Question 2

Sweden and Norway are usually described as ________________ economies.

Accepted Answer

The answer of Sweden and Norway are usually described as...

Question 3

Which one of the following is a public good?

Accepted Answer

A) A toll road 
B) Conrail 
C) A local police department 
D) A rent-a-cop agency

Question 4

"The invisible hand" is really the ___________.

Accepted Answer

The answer of "The invisible hand" is really 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

Which of the following is not a typical attribute of a socialist country?

Accepted Answer

A) Taxes are very high,particularly on the wealthy classes. 
B) Production is guided by the price system. 
C) Government owns some of the means of production. 
D) Cradle-to-grave security for its citizens.

Question 7

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.

Question 8

Statement I.Adam Smith believed the federal government should play a larger role in the economy.
Statement II.Adam Smith said that a person pursuing his own interest "frequently promotes that of society more effectually than when he really intends to promote it."

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.

Question 9

Sweden and Norway would best be described as _______ countries.

Accepted Answer

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

Question 10

Each of these is a basic characteristic of a capitalist economy,except

Accepted Answer

A) the institution of private property. 
B) central planning. 
C) laissez-faire. 
D) individuals acting in their own self-interest.

Question 11

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.

Question 12

The government is able to alter the outcome of the three basic economic questions (what? how? and for whom?)by _____________,________________,and __________.

Accepted Answer

The answer of The government is able to alter the...

Question 13

If a nation starts out with very little capital

Accepted Answer

A) it is doomed to eternal poverty because it will not be able to divert productive resources from producing consumer goods to producing capital goods. 
B) it can quite easily divert some resources from producing consumer goods to producing capital goods. 
C) if it is lucky enough to possess a valuable commodity that the industrial world wants such as oil,it can sell its oil in exchange for plant and equipment and thus industrialize. 
D) None of the choices are true.

Question 14

Under the old Soviet version of communism in the U.S.S.R. ,the questions of 'What?','How?',and 'For whom?' were answered by

Accepted Answer

A) a democratically elected congress called the DumA. 
B) the law of supply and demand. 
C) the decisions of hundreds of millions of individual consumers. 
D) a government planning committee. 
E) the owners of private businesses.

Question 15

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.

Question 16

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.

Question 17

Today,__________ leads the world with more than 800 million cell phone users.

Accepted Answer

A) the United States 
B) China 
C) Japan 
D) Canada

Question 18

How many households receive their incomes mainly from the business sector?

Accepted Answer

A) 300 million 
B) 117 million 
C) 50 million 
D) 39 million

Question 19

In the circular flow model,businesses

Accepted Answer

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

Question 20

Cradle-to-grave security is most common in ___________ countries.

Accepted Answer

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

Exam 3: The Mixed Economy

Which statement is true?

Sweden and Norway are usually described as ________________ economies.

Which one of the following is a public good?

"The invisible hand" is really the ___________.

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

Which of the following is not a typical attribute of a socialist country?

An example of a public good is

Statement I.Adam Smith believed the federal government should play a larger role in the economy. Statement II.Adam Smith said that a person pursuing his own interest "frequently promotes that of society more effectually than when he really intends to promote it."

Sweden and Norway would best be described as _______ countries.

Each of these is a basic characteristic of a capitalist economy,except

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

The government is able to alter the outcome of the three basic economic questions (what? how? and for whom?)by ___,,and .

If a nation starts out with very little capital

Under the old Soviet version of communism in the U.S.S.R. ,the questions of 'What?','How?',and 'For whom?' were answered by

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

An example of a public good is

Today,__________ leads the world with more than 800 million cell phone users.

How many households receive their incomes mainly from the business sector?

In the circular flow model,businesses

Cradle-to-grave security is most common in ___________ countries.