Question 1

A firm's profits equal $100 if

Accepted Answer

A)  its total revenue is$100.00.00.00.00.
B)  the sum of its total revenue and its total cost is$100.00.00.00.00.
C)  the difference between its total revenue and its total cost is$100.00.00.00.00.
D)  its total cost is$100.00.00.00.00.

Question 2

Which of the following is most likely an action that supports competition?

Accepted Answer

A)  Requiring professionals, such as architects and engineers, to be licensed
B)  Using tariffs to restrict the ability of foreign firms to sell products in domestic markets
C)  Preventing two dominant firms in the same market from merging
D)  Granting subsidies to farmers based on production levels

Question 3

Which of the following would most likely generate a positive externality?

Accepted Answer

A)  Roller coaster rides
B)  Pollution
C)  Alcoholic beverages
D)  Education

Question 4

Businesses do all of the following except:

Accepted Answer

A)  pay taxes to the government.
B)  demand labor services from households in the factor market.
C)  demand goods and services from households in the goods market.
D)  supply goods and services to the government in the goods market.

Question 5

Which of the following is not an example of government's role as an actor?

Accepted Answer

A)  Equal opportunity and labor laws that restrict businesses' freedom to hire and fire whomever they want
B)  Social security tax cuts that reduce the percentage paid by employees
C)  Increases in social security spending
D)  Laws that require states and the federal government to balance their budgets

Question 6

When the Sarbanes-Oxley Act that established new accounting rules was passed, analysts suggested that the new rules would not improve protections for the investing public, but it would result in more work for accountants.If the professors are right, these regulations are an example of:

Accepted Answer

A)  laissez faire.
B)  demerit goods.
C)  government failure.
D)  comparative advantage.

Question 7

Since the late 1980s:

Accepted Answer

A)  the Soviet socialist economic and political structure has spread to other nations.
B)  the Soviet socialist economic and political structure has fallen apart.
C)  the Soviet Union installed Soviet-dominated governments in a number of Eastern European countries.
D)  socialism has gained popularity among the governments of Eastern Europe.

Question 8

A company such as Microsoft or Pepsi Co.is a legal hassle to organize, difficult to monitor, and possibly could double tax income.It is an example of a:

Accepted Answer

A)  consumer.
B)  sole proprietorship.
C)  partnership.
D)  corporation.

Question 9

When a government bans prostitutions, it may do so because it considers prostitution to be a:

Accepted Answer

A)  progressive good.
B)  regressive good.
C)  public good.
D)  demerit good.

Question 10

In practice, distribution under socialism is primarily determined by:

Accepted Answer

A)  individual altruism and cooperation.
B)  the ability of each individual to produce.
C)  central planners within the government.
D)  market forces of supply and demand.

Question 11

Which of the following countries is not a member of The Group of Eight?

Accepted Answer

A)  Germany
B)  Japan
C)  United States
D)  China

Question 12

Welfare capitalism is an economic system in which:

Accepted Answer

A)  markets operate without government regulation.
B)  government owns all of the means of production.
C)  markets operate, but government regulates markets significantly.
D)  laissez-faire operates unimpeded.

Question 13

Businesses are on the:

Accepted Answer

A)  supply side of factor markets and the demand side of goods markets.
B)  demand side of factor markets and the supply side of goods markets.
C)  supply side of both factor markets and goods markets.
D)  demand side of both factor markets and goods markets.

Question 14

Which two systems require the least amount of government intervention?

Accepted Answer

A)  Mercantilism and capitalism
B)  Feudalism and socialism
C)  Capitalism and feudalism
D)  Mercantilism and socialism

Question 15

Which group has ultimate control over the U.S.economy?

Accepted Answer

A)  Business
B)  Households
C)  Multinationals
D)  Government

Question 16

In a feudalist society, in comparison with mercantilism:

Accepted Answer

A)  merchants play a more important political role than serfs.
B)  tradition plays a more important role than the government.
C)  government plays a large role in determining the what, how, and for whom decisions.
D)  markets make the central economic decisions.

Question 17

In the mercantilist system:

Accepted Answer

A)  markets rather than political forces make the central economic decisions.
B)  serfs make the central economic decisions.
C)  governments let the market decide what to produce.
D)  governments distributed the rights to produce.

Question 18

From the Great Depression in the 1930s until the tax reforms of the 1980s, the United States government integrated a number of what might best be called ________ institutions into the economy.

Accepted Answer

A)  socialist
B)  capitalist
C)  entrepreneurial
D)  profit-seeking

Question 19

Enron executives were charged with numerous counts of corporate fraud and corruption.Among the charges was insider trading, which involves the trading of a corporation's stock by insiders who may have access to information that the public does not.Which role is the government playing when it makes insider trading illegal?

Accepted Answer

A)  providing for public goods
B)  promoting effective and workable competition
C)  correcting for externalities
D)  adjusting for undesirable market results

Question 20

Market and socialist economies can be contrasted in all the following ways except that:

Accepted Answer

A)  under a market economy labor is allocated by individual choice based on wage levels; under traditional socialism it is allocated by a government planning board.
B)  under a market economy government plays no role in the market; under socialism, government planning boards make most major economic decisions.
C)  under a market economy the distribution of income is to each according to his ability, effort, and inheritance; under ideal socialism the distribution of income is to each according to his need.
D)  under a market economy self-interest is the primary motive of economic activity; under socialism, individuals are supposed to act from considerations of the general good.

Exam 3: Economic Institutions

Since the late 1980s:

Correct Answer
verified

A company such as Microsoft or Pepsi Co.is a legal hassle to organize, difficult to monitor, and possibly could double tax income.It is an example of a:

Correct Answer
verified

In practice, distribution under socialism is primarily determined by:

Correct Answer
verified

Which group has ultimate control over the U.S.economy?

Correct Answer
verified

Market and socialist economies can be contrasted in all the following ways except that:

Correct Answer
verified

Which two systems require the least amount of government intervention?

Correct Answer
verified

Which of the following countries is not a member of The Group of Eight?

Correct Answer
verified

Which of the following is not an example of government's role as an actor?

Correct Answer
verified

A firm's profits equal $100 if

Correct Answer
verified

Which of the following is most likely an action that supports competition?

Correct Answer
verified

In the mercantilist system:

Correct Answer
verified

In a feudalist society, in comparison with mercantilism:

Correct Answer
verified

Welfare capitalism is an economic system in which:

Correct Answer
verified

Correct Answer
verified

Businesses do all of the following except:

Correct Answer
verified

From the Great Depression in the 1930s until the tax reforms of the 1980s, the United States government integrated a number of what might best be called ________ institutions into the economy.

Correct Answer
verified

Businesses are on the:

Correct Answer
verified

When a government bans prostitutions, it may do so because it considers prostitution to be a:

Correct Answer
verified

Which of the following would most likely generate a positive externality?

Correct Answer
verified

When the Sarbanes-Oxley Act that established new accounting rules was passed, analysts suggested that the new rules would not improve protections for the investing public, but it would result in more work for accountants.If the professors are right, these regulations are an example of:

Correct Answer
verified

Exam 3: Economic Institutions

Since the late 1980s:

Correct AnswerverifiedShow Answer

A company such as Microsoft or Pepsi Co.is a legal hassle to organize, difficult to monitor, and possibly could double tax income.It is an example of a:

Correct AnswerverifiedShow Answer

In practice, distribution under socialism is primarily determined by:

Correct AnswerverifiedShow Answer

Which group has ultimate control over the U.S.economy?

Correct AnswerverifiedShow Answer

Market and socialist economies can be contrasted in all the following ways except that:

Correct AnswerverifiedShow Answer

Which two systems require the least amount of government intervention?

Correct AnswerverifiedShow Answer

Which of the following countries is not a member of The Group of Eight?

Correct AnswerverifiedShow Answer

Which of the following is not an example of government's role as an actor?

Correct AnswerverifiedShow Answer

A firm's profits equal $100 if

Correct AnswerverifiedShow Answer

Which of the following is most likely an action that supports competition?

Correct AnswerverifiedShow Answer

In the mercantilist system:

Correct AnswerverifiedShow Answer

In a feudalist society, in comparison with mercantilism:

Correct AnswerverifiedShow Answer

Welfare capitalism is an economic system in which:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Businesses do all of the following except:

Correct AnswerverifiedShow Answer

From the Great Depression in the 1930s until the tax reforms of the 1980s, the United States government integrated a number of what might best be called ________ institutions into the economy.

Correct AnswerverifiedShow Answer

Businesses are on the:

Correct AnswerverifiedShow Answer

When a government bans prostitutions, it may do so because it considers prostitution to be a:

Correct AnswerverifiedShow Answer

Which of the following would most likely generate a positive externality?

Correct AnswerverifiedShow Answer

When the Sarbanes-Oxley Act that established new accounting rules was passed, analysts suggested that the new rules would not improve protections for the investing public, but it would result in more work for accountants.If the professors are right, these regulations are an example of:

Correct AnswerverifiedShow Answer

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