The right of people to receive the value of their output as determined by the market _____. a. leads to people pursuing their own selfish ends, with little regard for others b. leads individuals to produce only goods that will appeal to the masses c. provides strong incentives to produce goods that will make themselves […]
As long as the value of additional units of output exceed the opportunity cost of that output, _____. a. it will not be produced b. it likely will not be produced c. it will be produced d. it is likely to be produced ANSWER c
Which of the below statements is true? a. It is efficient to produce beyond the equilibrium output level as long as costs are low. b. The level of output that maximizes the value of an economy’s output is found at the intersection of supply and demand in a competitive market. c. Production and exchange is […]
The subject matter of public economics falls into the two general categories of _____ and _____. a. public interest; private interest b. coercion action; individual liberty c. revenue generation; government spending d. civilian activities; military duties ANSWER c
Which of these is not a valid reason for government intervention into mutually beneficial exchange? a. The market system might not function at all without government protecting certain rights b. The market system produces an efficient outcome that the majority does not like c. The government might be able to undertake some activities more efficiently […]
The market system is able to allocate resources efficiently because individuals have the right to the output they produce and _____. a. freedom of the press b. freedom of speech c. freedom of movement d. freedom of exchange ANSWER d
If government did not individual rights, the efficiency of a market economy_____. a. would decline b. would be about the same c. would increase d. could possibly decline or possibly increase ANSWER a
Government institutions that protect the rights of individuals are ______. a. the executive, legislative, and judicial branches of government b. federal, state, and local governments c. federal agencies such as OSHA, FEC, and the FCC d. police, military branches, and the court system ANSWER d
The market system is based upon _____. a. money b. voluntary exchange c. capitalism d. profits ANSWER b
For goods on which a relatively small portion of income is expended, _____. a. income effects will be small relative to substitution effects b. income effects will be large relative to substitution effects c. income effects will be about the same as substitution effects d. there will be no income effects. ANSWER a
