Question 1

Which of the following did not occur during the Industrial Revolution?

Accepted Answer

A)  Production became more reliant on highly specialized equipment.
B)  A more efficient division of labor was promoted.
C)  Workers bore much of the costs of production.
D)  The transaction costs of contracting with individual resource owners were reduced.
E)  Technological development increased the productivity of most workers.F) A) and B)
G) None of the above

Question 2

The location of production

Accepted Answer

A)  shifted from factories to cottages during the Industrial Revolution
B)  is no different today that during the Industrial Revolution,except that we use better technology today
C)  in the United States shifted from the West Coast to the East Coast as the country was settled
D)  shifted from cottages to factories during the Industrial Revolution,but now may be shifting back to the home
E)  is influenced more by land costs than by technological changeF) All of the above
G) A) and B)

Question 3

The increased labor force participation of married women in the United States is most often explained by

Accepted Answer

A)  declining productivity in agricultural production
B)  a rise in average household size
C)  increased education and an increased demand for labor
D)  the decreased opportunity cost of working in the home
E)  declining productivity in household productionF) C) and E)
G) C) and D)

Question 4

The term "utility" means

Accepted Answer

A)  satisfaction
B)  a low-valued good
C)  productivity
D)  adaptability
E)  efficiencyF) A) and B)
G) A) and E)

Question 5

Which of the following is a result of increased real wages in the United States?

Accepted Answer

A)  a decrease in the quantity of services demanded by households
B)  an increase in the opportunity cost of remaining employed in the home
C)  a decrease in the opportunity cost of working outside the home
D)  a decline in the number of households providing labor outside the home
E)  reduced use of labor-saving devices in householdsF) B) and E)
G) None of the above B

Question 6

Which of the following represents the best example of a transfer payment?

Accepted Answer

A)  the paycheck that Freeda brings home from her job as a computer programer
B)  the interest that Hans earns from the savings account he has with USA Bank
C)  the revenue that Janet has left over after she pays all the expenses associated with running her software development business
D)  the check that Hunter receives each month for leasing his land to the natural gas company that is drilling on his land
E)  the check that Trisha gets each month from the Social Security AdministrationF) A) and C)
G) A) and E)

Question 7

Gross Domestic Product is the value of all

Accepted Answer

A)  goods and services produced during a particular year
B)  goods and services sold during a particular year
C)  final goods and services sold during a particular year
D)  final goods and services produced during a particular year
E)  final goods and services produced and sold during a particular yearF) C) and D)
G) B) and D)

Question 8

Most economists assume that the goal of elected officials is to promote the public interest.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is true of import tariffs and quotas?

Accepted Answer

A)  They benefit domestic producers.
B)  Domestic consumers gain because they purchase the output of domestic firms.
C)  Specialization and comparative advantage are advanced by tariffs and quotas.
D)  They tend to expand the volume of world trade.
E)  Because they increase the output levels of domestic firms,they tend to lower domestic prices.F) C) and D)
G) A) and C)

Question 10

Household production is more likely to occur when

Accepted Answer

A)  it requires many specialized resources
B)  technology makes it easier than market production
C)  tax avoidance is undesirable
D)  less control over the final product is desirable
E)  the opportunity cost of household production is highF) A) and B)
G) All of the above B

Question 11

Which of the following would not be considered a role of the government?

Accepted Answer

A)  promoting competition
B)  providing public goods
C)  providing externalities
D)  regulating natural monopolies
E)  safeguarding private property and enforcing contractsF) B) and E)
G) None of the above

Question 12

Which of the following would be the best example of a partnership?

Accepted Answer

A)  The legal office of Alias,Smith and Jones
B)  A local mom and pop restaurant
C)  Microsoft
D)  A local hospital
E)  A State UniversityF) B) and D)
G) A) and E)

Question 13

You are more likely to hire a plumber to repair a leaky drain pipe

Accepted Answer

A)  as the tax rate on your earned income rises
B)  if you already own the specialized tools required to complete the plumbing repair work
C)  following an increase in the opportunity cost of your time
D)  the more knowledge and experience in plumbing repair work that you possess
E)  as the transaction cost of entering into a plumbing contract increases due to government regulationsF) A) and E)
G) A) and D)

Question 14

Which of the following is an example of an in-kind transfer?

Accepted Answer

A)  welfare payments
B)  most Social Security benefits
C)  unemployment compensation payments
D)  food stamps
E)  charitable contributionsF) A) and C)
G) All of the above

Question 15

As the real wage increases,the opportunity cost of working outside the home increases.

Accepted Answer

A) True 
 B)False

Question 16

A large number of businesses are organized as sole proprietorships because it is easy for them to acquire large sums of financing.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following taxes is based on the ability-to-pay principle?

Accepted Answer

A)  tolls on a bridge
B)  income taxes
C)  gasoline excise taxes
D)  property taxes
E)  user fees that collect the same amount from each personF) A) and B)
G) A) and C)

Question 18

A realized capital gain is

Accepted Answer

A)  the difference between the price of a share of stock and what the investor paid for it (i.e.,the broker's fee) 
B)  the difference between the original value of a piece of equipment and its depreciated value
C)  an increase in the net worth of a sole proprietorship or partnership
D)  an increase in the market value of a share of stock held by an individual
E)  the difference between the selling price and the purchase price of a share of stockF) B) and C)
G) A) and C)

Question 19

Which of the following is an example of a durable good?

Accepted Answer

A)  a cowboy
B)  a cherry pie
C)  a newspaper
D)  a hand-held calculator
E)  a pencilF) A) and E)
G) A) and D) D

Question 20

Externalities are defined as

Accepted Answer

A)  any transaction external to the firm
B)  costs or benefits that fall on third parties
C)  policies that firms undertake to sell products outside the country
D)  managers' dealings with stockholders outside the firm
E)  costs of maintaining plant and equipment to avoid the scrutiny of external auditorsF) A) and C)
G) D) and E)

Exam 3: Economic Decision Makers

Which of the following did not occur during the Industrial Revolution?

Correct AnswerverifiedShow Answer

The location of production

Correct AnswerverifiedShow Answer

The increased labor force participation of married women in the United States is most often explained by

Correct AnswerverifiedShow Answer

The term "utility" means

Correct AnswerverifiedShow Answer

Which of the following is a result of increased real wages in the United States?

Correct AnswerverifiedB

Which of the following represents the best example of a transfer payment?

Correct AnswerverifiedShow Answer

Gross Domestic Product is the value of all

Correct AnswerverifiedShow Answer

Most economists assume that the goal of elected officials is to promote the public interest.

Correct AnswerverifiedShow Answer

Which of the following is true of import tariffs and quotas?

Correct AnswerverifiedShow Answer

Household production is more likely to occur when

Correct AnswerverifiedB

Which of the following would not be considered a role of the government?

Correct AnswerverifiedShow Answer

Which of the following would be the best example of a partnership?

Correct AnswerverifiedShow Answer

You are more likely to hire a plumber to repair a leaky drain pipe

Correct AnswerverifiedShow Answer

Which of the following is an example of an in-kind transfer?

Correct AnswerverifiedShow Answer

As the real wage increases,the opportunity cost of working outside the home increases.

Correct AnswerverifiedShow Answer

A large number of businesses are organized as sole proprietorships because it is easy for them to acquire large sums of financing.

Correct AnswerverifiedShow Answer

Which of the following taxes is based on the ability-to-pay principle?

Correct AnswerverifiedShow Answer

A realized capital gain is

Correct AnswerverifiedShow Answer

Which of the following is an example of a durable good?

Correct AnswerverifiedD

Externalities are defined as

Correct AnswerverifiedShow Answer

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B

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B

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D

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