ECON: Chpts 1-3 questions ( test)

Fred and Greg are owners of a Five Guys. They invested $200,000 each and pay Bill $30,000 per year to manage the restaurant. The Five Guys makes $40,000 this year. Do employees share any responsibility for business debt?

No

Indicate whether the following business is structured as a corporation, partnership, or sole proprietorship. A business has one owner who is entitled to all profits from the business, but who is also personally responsible for all the business debt.

sole proprietorship

Fred and Greg are owners of a Five Guys. They invested $200,000 each and pay Bill $30,000 per year to manage the restaurant. The Five Guys makes $40,000 this year. Are employees entitled to share in the profit?

No

Suppose that business buy a total of $100 billion pf the four resources ( labor, land, capital, entrepreneurial ability) from households. If households receive $60 million in wages, $10 billion in rent, and $20 billion in interest, how much are households paid for providing entrepreneurial ability?

10 billion (100-90)

If households spend $55 billion on goods. how much in revenue do businesses receive for services? ( businesses pay 100% of their revenues to households for the four productive resources.)

45 billion ( 100-55)

Decide whether each of the following situations most closely corresponds to being part of a command system, a market system, or a laissez-faire system A man who wants to start a bicycle repair shop cannot do so unless the central government decides to license a bicycle repair shop in his town

command system

Indicate whether the following business is structured as a corporation, partnership, or sole proprietorship. A business has multiple owners who are able to buy and sell their ownership, share equally in the profits of the business, but the owners are not personally responsible for losses of the business.

corporation

For each of the following, the market is in equilibrium. Evaluate change as directed. A hurricane tracks through the oil producing regions of the Gulf of Mexico, and forces companies to shut down and evacuate both oil drilling rigs and gasoline refineries. Demand does not change. What happens to the following: The quantity of gasoline sold increases or decreases?

decrease

Suppose that you initially have $100 to spend on books or movie tickets. The books start off costing $25 each and the movie tickets start off costing $10 each. For each of the following situations indicate whether the change has an income effect that increases the quantity of goods that you may purchase, or decreases the quantity of goods that you may purchase. Your budget remains $100, the price of the movie tickets increase to $20, but the price of a book remains $25.

decrease

For each of the following, the market is in equilibrium. Evaluate change as directed. A hurricane tracks through the oil producing regions of the Gulf of Mexico, and forces companies to shut down and evacuate both oil drilling rigs and gasoline refineries. Demand does not change. What happens to the following: Gasoline supply increases or decreases?

decreases

For each of the following, the market is in equilibrium. Evaluate change as directed. A hurricane tracks through the oil producing regions of the Gulf of Mexico, and forces companies to shut down and evacuate both oil drilling rigs and gasoline refineries. Demand does not change. What happens to the following: Gasoline prices increase or decrease?

increase

Suppose that you initially have $100 to spend on books or movie tickets. The books start off costing $25 each and the movie tickets start off costing $10 each. For each of the following situations indicate whether the change has an income effect that increases the quantity of goods that you may purchase, or decreases the quantity of goods that you may purchase. Your budget remains $100, the price of movie tickets remains $10, but the price of a book falls to $15.

increase

The Tampa Bay Rays begin the 2019 season in 3rd place in the American League East. Attendance is so-so and scalpers sell their tickets at below face value and rarely sell all of their available tickets. In June, the team foes on a streak and moves into 1st place. Fan interest builds and attendance at the games goes up, eventually approaching sell-outs. Scalpers bought their tickets prior to the season, so their supply of tickets does not change. What happens to the following: Prices paid to scalpers increase of decrease?

increase

The Tampa Bay Rays begin the 2019 season in 3rd place in the American League East. Attendance is so-so and scalpers sell their tickets at below face value and rarely sell all of their available tickets. In June, the team foes on a streak and moves into 1st place. Fan interest builds and attendance at the games goes up, eventually approaching sell-outs. Scalpers bought their tickets prior to the season, so their supply of tickets does not change. What happens to the following: Ticket demand increases or decreases?

increase

The Tampa Bay Rays begin the 2019 season in 3rd place in the American League East. Attendance is so-so and scalpers sell their tickets at below face value and rarely sell all of their available tickets. In June, the team foes on a streak and moves into 1st place. Fan interest builds and attendance at the games goes up, eventually approaching sell-outs. Scalpers bought their tickets prior to the season, so their supply of tickets does not change. What happens to the following: The quantity of tickets sold by scalpers increases or decreases?

increases

Decide whether each of the following situations most closely corresponds to being part of a command system, a market system, or a laissez-faire system The government is responsible for providing a legal system that enforces property rights, national defense, and law enforcement. These programs are paid for by taxes paid by individuals and businesses

laissez faire

micro or macro? In an effort to stimulates business activity, the federal government cuts income tax rates.

macro

micro or macro? The federal reserve chairman signals that the open market committee will raise interest rates 1/4% twice before the end of the year.

macro

Decide whether each of the following situations most closely corresponds to being part of a command system, a market system, or a laissez-faire system Florida collects sales taxes and property taxes to fund education, public libraries, police and fire departments, other essential government services, and some limited welfare programs

market system

micro or macro? A plumber hires an additional helper to finish a school gym project.

micro

micro or macro? An uber driver buys a larger minivan to allow him to drive for larger groups.

micro

Fred and Greg are owners of a Five Guys. They invested $200,000 each and pay Bill $30,000 per year to manage the restaurant. The Five Guys makes $40,000 this year. Who is paid the $40,000 in profit?

partnership

Indicate whether the following business is structured as a corporation, partnership, or sole proprietorship. A business with multiple owners who share the profits of the business, and also share personal responsibility for the business debt.

partnership