Question 1

Each of these is a basic characteristic of a capitalist economy, except

Accepted Answer

A)  the institution of private property.
B)  central planning.
C)  laissez-faire.
D)  individuals acting in their own self-interest.E) B) and C)
F) A) and D)

Question 2

A $3 increase in the federal gasoline tax would

Accepted Answer

A)  reduce air pollution.
B)  very likely be voted for by most Representatives and Senators.
C)  convince many Americans to buy SUV's.
D)  have little effect on the number of miles driven.E) A) and B)
F) A) and C)

Question 3

An external benefit occurs when

Accepted Answer

A)  some of the benefits derived from the production or consumption of some good or service are enjoyed by a third party.
B)  the production or consumption of some good or service inflicts costs on a third party without compensation.
C)  private costs exceed social costs.
D)  private benefits exceed private benefits.E) A) and B)
F) B) and D)

Question 4

In a pure capitalist economy, "what to produce" is determined by

Accepted Answer

A)  a central planning board.
B)  the price mechanism.
C)  the issuing of government coupons used along with money to purchase goods.
D)  None of these choices are true.E) None of the above
F) C) and D)

Question 5

In a capitalistic economic system, who owns most of the nation's resources?

Accepted Answer

A)  Labor unions
B)  The government
C)  Private individuals
D)  No oneE) A) and B)
F) A) and C)

Question 6

The nation closest to a centrally planned, socialist economy is

Accepted Answer

A)  China.
B)  Japan.
C)  the United States.
D)  Norway.E) B) and C)
F) A) and C)

Question 7

Characteristics of the "invisible hand" concept include all of the following, except

Accepted Answer

A)  Simple markets.
B)  Individuals and firms pursue their own self-interest without any central direction or regulation.
C)  A complete lack of government involvement in the economy.
D)  All of the choices are characteristics of the "invisible-hand."E) B) and C)
F) None of the above

Question 8

Karl Marx said all of the following, except that

Accepted Answer

A)  in the long run, capitalism would collapse.
B)  capitalists and workers generally had the same economic interests.
C)  one's social consciousness was determined by one's relationship to the means of production.
D)  whomever controlled a society's capital controlled that society.E) B) and C)
F) A) and B)

Question 9

Which of the following is NOT a characteristic of a centrally planned economy?

Accepted Answer

A)  Consumers vote with their dollars thus guiding resources to produce what the society wants.
B)  Government sets the prices.
C)  The government decides how much of each good should be produced.
D)  All of these statements are characteristics of centrally planned economy.E) None of the above
F) C) and D)

Question 10

Which of the following is NOT an example of an externality?

Accepted Answer

A)  The development of a vaccine for preventing flu.
B)  Acid rain that destroys forest land throughout the Midwest.
C)  Gas prices that doubled between 1998 and 1999.
D)  A factory that dumps dangerous chemicals into the Hudson River.E) A) and D)
F) None of the above

Question 11

A person will do more good pursuing his own self-interest than if he consciously set out to promote the public good was the view of

Accepted Answer

A)  Karl Marx.
B)  John Maynard Keynes.
C)  Mikhail Gorbachev.
D)  Adam Smith.E) All of the above
F) A) and C)

Question 12

Capitalism is an economic system in which the ownership of resources is mostly

Accepted Answer

A)  private.
B)  collective.
C)  by government.
D)  All of the choices are true.
E)  None of the choices are true.F) All of the above
G) A) and D)

Question 13

Statement I: It is the role of government to ensure that property rights are protected, but not to interfere with minimizing any unpleasant side effects from pollution. Statement II: The U.S. government must provide the infrastructure for a market system to function efficiently.

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) B) and C)
F) None of the above

Question 14

Which statement is false?

Accepted Answer

A)  Under Soviet communism, government planning was substituted for the price mechanism.
B)  The entire Soviet economy was a Rube Goldberg contraption of subsidies, fixed prices, bureaucratic rules and regulations, special privilege, and outright corruption.
C)  Had Mikhail Gorbachev not begun dismantling the communist bureaucracy, the Soviet system probably would have been able to continue carrying on business as usual for another century.
D)  None of the statements are false.E) B) and C)
F) All of the above

Question 15

Statement I: By collecting taxes, providing services, and issuing regulations, the government has some effect on the three economic questions: what, how, and for whom. Statement II: In the United States economy, the goals of equity and efficiency do not in any way come into conflict.

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) B) and D)

Question 16

According to Karl Marx, one's social consciousness was determined by one's relationship to the ___________.

Accepted Answer

The answer of According to Karl Marx, one's social consciousness...

Question 17

Statement I. Public goods tend to be indivisible. Statement II. There is often no way to exclude anyone from consuming a public good if she or he did not pay for it.

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) All of the above
F) A) and D)

Question 18

Which of the following is NOT an attribute of a public good?

Accepted Answer

A)  Being non-excludable
B)  Indivisibility
C)  Uncompensated third-party costs
D)  Being non-rivalrousE) A) and B)
F) C) and D)

Question 19

Which statement is true?

Accepted Answer

A)  Russia has embraced capitalism at a much faster rate than China.
B)  The Russian government today is moving much closer to central planning than when the country was part of the Soviet Union.
C)  The standard of living in Russia is higher than that of the United States.
D)  None of the statements are true.E) C) and D)
F) B) and D)

Question 20

The form of economic system in Hitler's Germany and Mussolini's Italy was called ________.

Accepted Answer

The answer of The form of economic system in Hitler's...

Exam 3: The Mixed Economy

Karl Marx said all of the following, except that

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Statement I: It is the role of government to ensure that property rights are protected, but not to interfere with minimizing any unpleasant side effects from pollution. Statement II: The U.S. government must provide the infrastructure for a market system to function efficiently.

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A $3 increase in the federal gasoline tax would

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Statement I: By collecting taxes, providing services, and issuing regulations, the government has some effect on the three economic questions: what, how, and for whom. Statement II: In the United States economy, the goals of equity and efficiency do not in any way come into conflict.

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The nation closest to a centrally planned, socialist economy is

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Which statement is true?

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A person will do more good pursuing his own self-interest than if he consciously set out to promote the public good was the view of

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Statement I. Public goods tend to be indivisible. Statement II. There is often no way to exclude anyone from consuming a public good if she or he did not pay for it.

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Which of the following is NOT an attribute of a public good?

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Characteristics of the "invisible hand" concept include all of the following, except

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In a pure capitalist economy, "what to produce" is determined by

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An external benefit occurs when

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According to Karl Marx, one's social consciousness was determined by one's relationship to the ___________.

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Each of these is a basic characteristic of a capitalist economy, except

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Which statement is false?

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In a capitalistic economic system, who owns most of the nation's resources?

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The form of economic system in Hitler's Germany and Mussolini's Italy was called ________.

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Which of the following is NOT a characteristic of a centrally planned economy?

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Which of the following is NOT an example of an externality?

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Capitalism is an economic system in which the ownership of resources is mostly

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