Question 1

The circular flow model shows the relationships between

Accepted Answer

A)  government and business firms.
B)  government and households.
C)  households and business firms.D) A) and B)
E) A) and C)

Question 2

In the year _______ the communist governments in eastern Europe were swept out of power.

Accepted Answer

The answer of In the year _______ the communist governments...

Question 3

To have competition as economists define it,

Accepted Answer

A)  you need many firms in an industry, with no one firm having any influence over price.
B)  you need a couple of firms in the industry, with each having significant influence over the price.
C)  you need many firms in an industry, and it doesn't matter if one firm has influence over price.
D)  All of these statements are true.E) A) and B)
F) All of the above

Question 4

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.E) None of the above
F) A) and B)

Question 5

Karl Marx wrote largely about

Accepted Answer

A)  19th century England.
B)  18th century England.
C)  19th century Russia.
D)  18th century Russia.
E)  18th and 19th century England and Russia.F) B) and C)
G) All of the above

Question 6

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.F) D) and E)
G) None of the above

Question 7

The government uses two measures, _____________________________ regulations and ____________________________ regulations to curb pollution.

Accepted Answer

command-an...

Question 8

When we drive our cars, we incur not only a private cost, but also a(n) ________ cost.

Accepted Answer

The answer of When we drive our cars, we incur...

Question 9

Who said, "Property is the exploitation of the weak by the strong. Communism is the exploitation of the strong by the weak"?

Accepted Answer

A)  Karl Marx
B)  Adam Smith
C)  Seymour Melman
D)  Studs Terkel
E)  Pierre-Joseph ProudhonF) A) and B)
G) C) and D)

Question 10

The U.S. has a mixed economy because

Accepted Answer

A)  the government helps in answering the three basic questions of economics: what, how and for whom.
B)  the laissez faire market system lacks government intervention.
C)  all goods and services are provided privately.
D)  the central planning body makes all market decisions.E) None of the above
F) All of the above

Question 11

Most economists in the U.S. believe that the price mechanism leads to

Accepted Answer

A)  an efficient allocation of resources.
B)  an equitable distribution of income.
C)  both an efficient allocation of resources and an equitable distribution of income.
D)  neither an efficient allocation of resources nor an equitable distribution of income.E) B) and C)
F) All of the above

Question 12

Private ownership of nearly all of a nation's land, labor, capital, and entrepreneurial ability is common to

Accepted Answer

A)  communism.
B)  fascism.
C)  socialism.
D)  None of these choices are true.E) B) and C)
F) A) and D)

Question 13

Statement I. The circular flow model traces the flow of money, resources, and goods and services through the economy. Statement II. Most household income is spent on investment or capital goods.

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.E) A) and B)
F) A) and C)

Question 14

"From each according to his ability; to each according to his needs" is from

Accepted Answer

A)  The Communist Manifesto.
B)  The Capitalist Manifesto.
C)  The Socialist Manifesto.
D)  The Fascist Manifesto.E) A) and D)
F) B) and C)

Question 15

Statement I: External costs are market failures, but external benefits are not. Statement II: The U.S. government provides the legal system under which our free enterprise economy can operate.

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.E) A) and B)
F) A) and C)

Question 16

The development of the polio vaccine would be considered a(n) _____________________ to society.

Accepted Answer

The answer of The development of the polio vaccine would...

Question 17

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

Accepted Answer

wages, sal...

Question 18

An economic model is

Accepted Answer

A)  a tool of logic that assumes that if event A precedes event B, A must be the cause of B.
B)  a simplified version of reality.
C)  a tool of logic that assumes that the whole is greater than the sum of the parts.
D)  a larger, more complicated version of reality.E) A) and B)
F) B) and C)

Question 19

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.F) A) and B)
G) A) and C)

Question 20

The main reason U.S. farmers can produce more than farmers in China is that they

Accepted Answer

A)  have more land.
B)  have more capital.
C)  have more labor.
D)  are better trained.E) A) and D)
F) B) and C)

Exam 3: The Mixed Economy

The development of the polio vaccine would be considered a(n) _____________________ to society.

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

Correct Answerverifiedwages, sal...View AnswerShow Answer

Which statement is true?

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"From each according to his ability; to each according to his needs" is from

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

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The main reason U.S. farmers can produce more than farmers in China is that they

Correct AnswerverifiedShow Answer

The U.S. has a mixed economy because

Correct AnswerverifiedShow Answer

Karl Marx wrote largely about

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When we drive our cars, we incur not only a private cost, but also a(n) ________ cost.

Correct AnswerverifiedShow Answer

An economic model is

Correct AnswerverifiedShow Answer

Private ownership of nearly all of a nation's land, labor, capital, and entrepreneurial ability is common to

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Who said, "Property is the exploitation of the weak by the strong. Communism is the exploitation of the strong by the weak"?

Correct AnswerverifiedShow Answer

The circular flow model shows the relationships between

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In the year _______ the communist governments in eastern Europe were swept out of power.

Correct AnswerverifiedShow Answer

Statement I. The circular flow model traces the flow of money, resources, and goods and services through the economy. Statement II. Most household income is spent on investment or capital goods.

Correct AnswerverifiedShow Answer

Most economists in the U.S. believe that the price mechanism leads to

Correct AnswerverifiedShow Answer

The government uses two measures, _____________________________ regulations and ____________________________ regulations to curb pollution.

Correct Answerverifiedcommand-an...View AnswerShow Answer

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.

Correct AnswerverifiedShow Answer

Statement I: External costs are market failures, but external benefits are not. Statement II: The U.S. government provides the legal system under which our free enterprise economy can operate.

Correct AnswerverifiedShow Answer

To have competition as economists define it,

Correct AnswerverifiedShow Answer

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wages, sal...
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The government uses two measures, _ regulations and regulations to curb pollution.

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command-an...
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