Question 1

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 2

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.

Question 3

The factory conditions of 19th century England that Karl Marx described may be found in his book,______.

Accepted Answer

The answer of The factory conditions of 19th century England...

Question 4

The government performs each of the following economic functions except

Accepted Answer

A) collecting taxes. 
B) spending. 
C) issuing regulations. 
D) operating the price mechanism.

Question 5

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.

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

The Chinese economy was set back by

Accepted Answer

A) the Great Leap Forward,but not the Cultural Revolution. 
B) the Cultural Revolution,but not the Great Leap Forward. 
C) both the Cultural Revolution and the Great Leap Forward. 
D) neither the Cultural Revolution nor the Great Leap ForwarD.

Question 8

Statement I: China's southern provinces have become "export platforms",sending out streams of consumer goods to Japan,Europe,and North America.
Statement II: China has become a wealthy nation as a result of getting rid of its communist economic system.

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

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

Accepted Answer

A) The development of a vaccine for preventing flu. 
B) Acid rain that destroys forest land throughout the Midwest. 
C) Gas prices that doubled between 1998 and 1999. 
D) A factory that dumps dangerous chemicals into the Hudson River.

Question 10

Of the 39 million Americans living in poverty,_______________ are children.

Accepted Answer

A) one-quarter 
B) 10 percent 
C) less than half 
D) more than half

Question 11

European communism collapsed during the years

Accepted Answer

A) 1969-1971. 
B) 1974-1976. 
C) 1979-1981. 
D) 1984-1986. 
E) 1989-1991.

Question 12

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."

Question 13

In the Soviet Union,most goods and services were produced by _________________.

Accepted Answer

The answer of In the Soviet Union,most goods and services...

Question 14

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.

Question 15

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 16

__________________ is an obvious example of government failure.

Accepted Answer

A) The immensely complex and confusing U.S.income tax system 
B) The numerous forms the government sends all large and most medium-sized companies 
C) The perplexing Medicare drug prescription plan 
D) All of these statements are government failures.

Question 17

The so-called "bridge to nowhere" in Alaska is an example of

Accepted Answer

A) a market failure. 
B) the incentive for politicians to bring home as much federal money as possible. 
C) a government failure. 
D) a market failure AND the incentive for politicians to bring home as much federal money as possible. 
E) the incentive for politicians to bring home as much federal money as possible AND a government failurE.

Question 18

Statement I: In a centrally planned economy,consumers do not have to consider prices when shopping.
Statement II: In a capitalist economy the three basic economic questions (what,how and for whom)are determined by the price mechanism.

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 19

According to the circular flow diagram,in return for land,labor,capital and entrepreneurial ability,households receive ______________________________.

Accepted Answer

The answer of According to the circular flow diagram,in return...

Question 20

An external cost occurs when

Accepted Answer

A) some of the benefits derived from the production or consumption of some good or service are enjoyed by a third party. 
B) the production or consumption of some good or service inflicts costs on a third party without compensation. 
C) private costs exceed social costs. 
D) private costs exceed private benefits.

Exam 3: The Mixed Economy

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

One of the characteristics of a command economy is

The factory conditions of 19th century England that Karl Marx described may be found in his book,______.

The government performs each of the following economic functions except

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

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

The Chinese economy was set back by

Statement I: China's southern provinces have become "export platforms",sending out streams of consumer goods to Japan,Europe,and North America. Statement II: China has become a wealthy nation as a result of getting rid of its communist economic system.

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

Of the 39 million Americans living in poverty,_______________ are children.

European communism collapsed during the years

Karl Marx and Friedrich Engels said

In the Soviet Union,most goods and services were produced by _________________.

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

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

__________________ is an obvious example of government failure.

The so-called "bridge to nowhere" in Alaska is an example of

Statement I: In a centrally planned economy,consumers do not have to consider prices when shopping. Statement II: In a capitalist economy the three basic economic questions (what,how and for whom) are determined by the price mechanism.

According to the circular flow diagram,in return for land,labor,capital and entrepreneurial ability,households receive ______________________________.

An external cost occurs when