Question 1

One reason for introducing the minimum wage rate into the labour market is:

Accepted Answer

A)   to reduce the number of individuals on unemployment programs.
B)   to help reduce the level of poverty amongst the poor.
C)   to eliminate wage differentials.
D)   to increase the number of jobs available.

Question 2

Which one of the following types of markets receive much government intervention?

Accepted Answer

A)   cellular phone venture
B)   restaurant
C)   telephone company
D)   running-shoe store

Question 3

A price ceiling:

Accepted Answer

A)   results in a shortage of the product.
B)   is imposed by government in order to support farm incomes.
C)   results in quantity supplied exceeding quantity demanded.
D)   describes the legal minimum price imposed on a product by the government. A

Question 4

In 2004, the average family income for a married couple with children was approximately:

Accepted Answer

A)   $91 000.
B)   $74 000.
C)   $38 000.
D)   $52 000.

Question 5

The imposition of an excise tax on a product:

Accepted Answer

A)   will shift the demand curve to the left.
B)   will shift the supply curve to the right.
C)   will shift the supply curve to the left.
D)   will shift the demand curve to the right.

Question 6

Under what conditions of price elasticity of demand would the price increase be the greatest Impositio N of an Excise Tax?

Accepted Answer

A)   elastic demand
B)   inelastic demand
C)   unitary elastic demand
D)   perfectly elastic demand

Question 7

Which of the following is not an example of an unmet public need?

Accepted Answer

A)   streetlights
B)   national defence
C)   sidewalks
D)   welfare assistance

Question 8

Under what conditions of price elasticity of supply would the price increase be the greatest after the imposition of an excise tax?

Accepted Answer

A)   elastic supply and inelastic demand
B)   inelastic supply and elastic demand
C)   perfectly inelastic supply and perfectly elastic demand
D)   unitary elastic supply and demand A

Question 9

For a society to reach a Pareto optimum situation there must:

Accepted Answer

A)   be third-party effects, perfect competition and non-excludability in consumption of goods and services.
B)   be third-party effects and excludability in consumption of goods and services.
C)   be perfect competition and excludability in consumption of goods and services.
D)   be third-party effects, perfect competition and excludability in consumption of goods and services.

Question 10

Examples of rationing used in health care includes all of the following except:

Accepted Answer

A)   insurance premiums
B)   waiting lists
C)   taxation
D)   user fees

Question 11

If the demand for a product is inelastic, the price increase after the imposition of a $1 excise tax will be:

Accepted Answer

A)   more than $1.
B)   less than $1.
C)   equal to $1.
D)   impossible to tell with available information.

Question 12

If the government were interested solely in raising revenue from the imposition of an excise tax, it should put the tax on a product that has:

Accepted Answer

A)   an elastic demand.
B)   a unitary elastic demand.
C)   a perfectly elastic demand.
D)   an inelastic demand.

Question 13

Vilfredo Pareto was known for theories relating to:

Accepted Answer

A)   minimum wage.
B)   government intervention and economic stabilization.
C)   welfare maximization and the invisible hand.
D)   income distribution.

Question 14

Adam Smith believed that:

Accepted Answer

A)   government should regulate third-party effects.
B)   the free market system promotes the welfare of everyone.
C)   market imperfections such as a lack of information should be corrected by government.
D)   incomes should be distributed more equitably in our economy.

Question 15

Keynes argued that to correct periods of slow economic growth and high unemployment:

Accepted Answer

A)   the government should not intervene.
B)   the government should increase spending.
C)   the government should increase taxation and reduce spending.
D)   the government should increase taxation.

Question 16

An example of a positive third-party effect is:

Accepted Answer

A)   bilingual labelling of products.
B)   education.
C)   natural monopoly.
D)   low prices.

Question 17

The adjustment of government spending and tax policy to economic conditions is known as:

Accepted Answer

A)   monetary policy.
B)   fiscal policy.
C)   subsidization.
D)   tax incidence.

Question 18

In 2004, the LICO procedure established a poverty line of $17 500 for a single person living in a community of:

Accepted Answer

A)   less than 30 000.
B)   30 000-99 999.
C)   500 000+.
D)   100 000-499 999.

Question 19

If the objective of the government was to discourage consumption then it would tax a product With:

Accepted Answer

A)   an inelastic demand.
B)   an elastic supply.
C)   an elastic demand.
D)   an inelastic supply.

Question 20

John Maynard Keynes proposed that:

Accepted Answer

A)   incomes be distributed more equitably.
B)   positive third-party effects be promoted by government.
C)   natural monopolies be regulated by government.
D)   government intervention could bring an end to depressed economic conditions. D

Exam 3: The Role of Government in a Market Economy

One reason for introducing the minimum wage rate into the labour market is:

Correct AnswerverifiedShow Answer

Which one of the following types of markets receive much government intervention?

Correct AnswerverifiedShow Answer

A price ceiling:

Correct AnswerverifiedA

In 2004, the average family income for a married couple with children was approximately:

Correct AnswerverifiedShow Answer

The imposition of an excise tax on a product:

Correct AnswerverifiedShow Answer

Under what conditions of price elasticity of demand would the price increase be the greatest Impositio N of an Excise Tax?

Correct AnswerverifiedShow Answer

Which of the following is not an example of an unmet public need?

Correct AnswerverifiedShow Answer

Under what conditions of price elasticity of supply would the price increase be the greatest after the imposition of an excise tax?

Correct AnswerverifiedA

For a society to reach a Pareto optimum situation there must:

Correct AnswerverifiedShow Answer

Examples of rationing used in health care includes all of the following except:

Correct AnswerverifiedShow Answer

If the demand for a product is inelastic, the price increase after the imposition of a $1 excise tax will be:

Correct AnswerverifiedShow Answer

If the government were interested solely in raising revenue from the imposition of an excise tax, it should put the tax on a product that has:

Correct AnswerverifiedShow Answer

Vilfredo Pareto was known for theories relating to:

Correct AnswerverifiedShow Answer

Adam Smith believed that:

Correct AnswerverifiedShow Answer

Keynes argued that to correct periods of slow economic growth and high unemployment:

Correct AnswerverifiedShow Answer

An example of a positive third-party effect is:

Correct AnswerverifiedShow Answer

The adjustment of government spending and tax policy to economic conditions is known as:

Correct AnswerverifiedShow Answer

In 2004, the LICO procedure established a poverty line of $17 500 for a single person living in a community of:

Correct AnswerverifiedShow Answer

If the objective of the government was to discourage consumption then it would tax a product With:

Correct AnswerverifiedShow Answer

John Maynard Keynes proposed that:

Correct AnswerverifiedD

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