Social Economics Chapter Three Review
Services make up about what percentage of the U.S. economy?
85%
All levels of government (federal, state, and local) consume about what percentage of the total output of the United States?
15%
Which of the following is not one type of e-commerce? 1. B2A 2. C2B 3. B2C 4. B2B
B2A
In studies, economists have found that employees who are giving the choice to opt-out of making retirement contributions are more likely than those who are given the choice to opt-in making contributions to
Choose to contribute
which of the following is NOT one of the three principal components of a socialist economy? 1. Government ownership of the means of production 2. Workers directed by a government planning board as to where they will work and how much they will be paid 3. Entrepreneurs are encouraged by the profit motive, rather than government directive, to satisfy consumer wants in the most efficient manner possible 4. Distribution is according to need
Entrepreneurs are encouraged by the profit motive, rather than government directive, to satisfy consumer wants in the most efficient manner possible
What is necessary for businesses to be profitable
Entrepreneurship must be present
True or False: Feudalism and mercantilism relied on markets to solve the three main coordination problems
False
True or False: Limited Liability is a key advantage of partnerships and sole proprietorships over corporations
False
Which of the following is NOT a characteristic of pure capitalism? 1. Government ownership of capital 2. Private ownership of land 3. Freedom of enterprise 4. Worker Freedom
Government ownership of capital
choice architecture is based on the observation that
How choices are presented to people affects the choices people make
which of the following is the best example of a marcroeconomic externality? 1. one person saving less without considering the effect on their retirement needs 2. Many people saving more without considering the effect on unemployment 3. One person starting a business without knowing whether the goods will sell 4. One person spending more in order to help stimulate the economy
Many people saving more without considering the effect on unemployment
Which of the following is a characteristic of a market economy? 1. Private Property 2. Government ownership of the means of production 3. Distribution according to need 4. Tradition determines the what, how, and for whom decisions
Private Property
True or False: Businesses produce goods and services and sell them to households and governments. The market where this interaction takes place is called the goods market.
True
True or False: Households supply factors of production to business and are paid by business for doing so. The market where this interaction takes place is called the factor market.
True
True or False: In a market economy, society relies on the self-interest of individuals to determine what, how and for whom to produce
True
True or False: Private property rights are essential to market economies
True
The market where businesses sell goods and services to households and the government is called the:
a goods market
When Churchill County residents voted whether to continue allowing tow brothels to operate, the government was acting as...
a referee
if federal, state and local governments were unable to raise any revenue, then government's role as:
both an actor and a referee would be eliminated
In practice, distribution under socialism is primarily determined by
central planners within the government
Socialism in theory is based on the principle that individuals should:
cooperate with one another to meet their needs
Some nutritionists consider junk food or eating junk food an example of:
demerit goods or activities.
one advantage of a sole proprietorship over a partnership is
direct control by the owner
the internet allows companies such as Amazon to sell goods online without regard to geographic location. This is known as...
e-commerce
a socialist economy in theory
expects people to be altruistic (selfless)
in socialism
government planning, rather than the market, is relied upon to coordinate economic activity
One advantage of a partnership over a corporation is
greater accountability
Which group has ultimate control over the U.S. economy?
households
E-commerce is expected to increase competition for all of the following reasons except: 1. increases the amount of information available to consumers 2. brings together a larger number of buyers and sellers in one virtual location 3. increases the importance of first-mover advantage in establishing name brand recognition 4. increases the potential marketplace
increases the importance of first-mover advantage in establishing a name brand
Which two sources of revenue comprise most of federal government revenue?
individual income tax and social security taxes and combination
A business is likely a sole proprietorship if:
it has only one owner who has unlimited liability.
Business decisions about what and how much to produce are base on what:
maximizes profits
Healthy food and charitable giving are examples of:
merit goods or activities
Capitalism and socialism have not existed forever. Capitalism came into existence in the:
mid 1700's and socialism came into existence in the early 1900's
Market economies are present in
most economies
a defining difference in what makes a firm a sole proprietorship, partnerships or a corporation is the
nature of ownership and accountability for each type of business
Entrepreneurship is defined as the ability to
organize and get something done
Flu vaccinations of school children have the unintended effect of protecting the vulnerable elderly from contracting the virus. This is an example of
positive externality
When my neighbor benefits from my cleaning up of my yard, they are experiencing a
positive externality
Market economies are base upon
private property and individual planning
Enron executives were charged with numerous counts of corporate fraud and corruption. Among the charges was insider trading, which involves the trading of a corporation's stock by insiders who may have access to information that the public does not. Which role is the government playing when it makes insider trading illegal?
promoting effective and workable competition
McDonald's Corporation lost a battle to keep a Singapore firm, Future Enterprises, from selling goods under the labels MacNoodles, MacTea, and MacChocolate. The court system in Singapore was, in this case, defining....
property rights
which of the following is one of the macroeconomic goals established by the 1946 employment act? 1. preventing large fluctuations in exchange rates 2. maintaining a constant level of consumer expenditure 3. providing an economic environment conducive to growth 4. ensuring that employers pay a workers a minimum wage sufficient to escape poverty
providing an economic environment conducive to growth
Being a monopolists lets a firm
raise the price of their product
Suppose that at the current price producers of CDs offer 5 million CDs for sale but consumers want to buy 6 million. When the market coordinates the demand and supply for CDs, the price of CDs will:
rise
When a government intervenes in an economy in a way that influences the relationship between households and businesses, it is...
serving as an economic referee
Certificates of ownership of a company are called:
stocks
governments do all of the falling except 1.oversee the interaction of households and businesses in the goods and factor market 2. demand labor services from households in the factor market 3. demand goods and services from businesses in the goods market 4. supply labor services to business in the factor market
supply labor services to business in the factor market
Households are on the
supply side of factor markets and the demand side of goods markets.
one advantage of a partnership over a sole proprietorship is
the ability to share the work and risk of business
An example of choice architecture is:
the default option bias
Profit is
what's left over from total revenues after all the appropriate costs have been subtracted
A public good is a good that
when consumed by one individual, can still be consumed by others