Economics: Chapter 4 Quiz

Topic: BusinessAgriculture
Sample donated:
Last updated: June 15, 2019

Multiple Choice5 points Question The personal distribution of income refers to the: Answer division of income between personal taxes, consumption expenditures, and saving. division of income on the basis of industry sources, for example, agriculture, transportation, and mining.

distribution of income to basic resource classes, that is, wages, rents, interest, and profits. way income is distributed among specific households or spending units. Correct Feedbackcorrect Incorrect Feedbackincorrect Add Question Here Multiple ChoiceQuestion The personal distribution of income in the United States is such that the richest fifth receives about _____ percent of personal income. Answer 30 40 50 60 Correct Feedbackcorrect Incorrect Feedbackincorrect Add Question Here Multiple Choice Question Other things equal, a rapid rise in profits relative to other types of income would affect: Answer the functional distribution of income only. the personal distribution of income only. both the functional and personal distributions of income.

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the relative size of the public sector. Correct FeedbackcorrectIncorrect Feedbackincorrect Add Question Here Multiple Choice Question Economists define durable goods as those products expected to last at least _____ year(s). Answer 1 3 5 10 Correct Feedbackcorrect Incorrect Feedbackincorrect Add Question Here Multiple Choice Question In economics, an organization that employs resources to produce goods and services for profit and operates one or more plants is called a(n): Answer industry. shop. conglomerate. firm.

Correct Feedbackcorrect Incorrect Feedbackincorrect Add Question Here Multiple ChoiceQuestion A firm comprised of plants or units operating in different industries, say, beer and theme parks, best illustrates a: Answer vertically integrated firm. multinational corporation. multiplant firm. conglomerate.

Correct Feedbackcorrect Incorrect Feedbackincorrect Add Question Here Multiple Choice Question The owners of a firm face unlimited liability for the firm’s debts in: Answer a corporation. a partnership, but not in a proprietorship. a proprietorship, but not in a partnership. both a proprietorship and a partnership. Correct FeedbackcorrectIncorrect Feedbackincorrect Add Question Here Multiple Choice Question In a competitive market: Answer external benefits will always exceed external costs.

resources will be misallocated if government does not properly adjust demand and supply for large external costs and benefits. resources will be allocated efficiently only if external benefits equal external costs. an efficient allocation of resources is realized even where there are large external costs and benefits. Correct Feedbackcorrect Incorrect Feedbackincorrect Add Question Here Multiple ChoiceQuestion An external cost or external benefit is also known as a(n): Answer marginal benefit.

principal-agent problem. transfer payment. spillover. Correct Feedbackcorrect Incorrect Feedbackincorrect Add Question Here Multiple Choice Question Nonrivalry and nonexcludability are the main characteristics of: Answer capital goods.

private goods. public goods. consumption goods. Correct Feedbackcorrect Incorrect Feedbackincorrect Add Question Here Multiple Choice Question Unlike a private good, a public good: Answer produces no external benefits or external costs.

as no opportunity costs. has benefits that are available to all, regardless of payment. is characterized by rivalry and excludability.

Correct Feedbackcorrect Incorrect Feedbackincorrect Add Question Here Multiple Choice Question Government rather than private firms must provide economically desirable public goods because: Answer high marginal costs preclude their production in the private sector. public goods have characteristics that make it difficult or impossible for private firms to produce them profitably. public goods have marginal costs that exceed marginal benefits. he law of increasing opportunity costs applies only to private goods. Correct Feedbackcorrect Incorrect Feedbackincorrect Add Question Here Multiple Choice Question The stabilization function of government involves government’s efforts to: Answer alter the output of specific goods when external costs or benefits are present. reduce the after-tax incomes of the rich and increase the after-tax incomes of the poor. deal with the problems of substantial unemployment and rapid inflation. provide the socially desired output of public goods.

Correct FeedbackcorrectIncorrect Feedbackincorrect Add Question Here Multiple Choice Question In performing its stabilization function it may be appropriate for government to: Answer increase both government spending and taxes when the economy is experiencing rapid inflation. reduce government spending and increase taxes when the economy experiences substantial unemployment. increase government spending and reduce taxes when the economy experiences rapid inflation. increase government spending and reduce taxes when the economy experiences substantial unemployment. Correct FeedbackcorrectIncorrect Feedbackincorrect Add Question Here Multiple Choice Question Fiscal policy: Answer is enacted by the nation’s central bank (the Federal Reserve in the U.

S. ). refers to government spending and taxation policies aimed at promoting price stability and full employment.

directly raises or lowers the level of interest rates to promote levels of spending consistent with full employment and price stability. is only used to reduce unemployment rates that are too high. Correct Feedbackcorrect Incorrect Feedbackincorrect Add Question Here Multiple ChoiceQuestion The addition of government to the circular-flow model illustrates that government: Answer purchases resources in the resource market.

provides services to businesses and households. purchases goods in the product market. does all of these. Correct Feedbackcorrect Incorrect Feedbackincorrect Add Question Here Multiple Choice Question Refer to the above diagram, in which solid arrows reflect real flows; broken arrows are monetary flows. Flow (2) might represent: Answer the provision of national defense by government. a government subsidy to farmers. corporate income tax payments.

elfare payments to low-income families. Correct Feedbackcorrect Incorrect Feedbackincorrect Add Question Here Multiple Choice Question Transfer payments differ from government purchases in that the: Answer former make a contribution to the domestic output, while the latter do not. former are associated with state and local governments, while the latter are associated with the Federal government. latter are not directly resource absorbing, while the former are. former are not directly resource absorbing, while the latter are.

Correct Feedbackcorrect Incorrect Feedbackincorrect Add Question HereMultiple Choice Question Answer the next question(s) on the basis of the following data: The tax represented above is: Answer optimal. proportional. regressive. progressive. Correct Feedbackcorrect Incorrect Feedbackincorrect Add Question Here Multiple Choice Question Government lotteries are: Answer used by a large number of states to supplement their tax revenues. illegal in the United States, but are a common source of revenue in other countries.

used by local governments, but not by state governments. a form of progressive taxation. Correct Feedbackcorrect Incorrect Feedbackincorrect

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