Economics Test 14-18

The marginal revenue product of an input in a competitive market decreases as a firm increases the quantity of an input used because of the: -Homogeneity of the product -Free mobility of resources -Law of diminishing marginal utility -Law of diminishing returns

-Law of diminishing returns

Interest rates are the payments needed to entice individuals to: -Sacrifice their future consumption -Accept insurable risk -Sacrifice their present consumption -Accept uninsurable risk

-Sacrifice their present consumption

Economic profits are not payments received for: -Exercising monopoly power -Taking uninsurable risks -Ownership of large stocks of capital resources -Making product or production innovations

-Ownership of large stocks of capital resources

Entrepreneurs normally do all of the following except: -Take the initiative in combining other resources to produce goods or services -Make the basic, nonroutine policy decisions for their organization -Avoid accepting risks associated with a business -Bear the risks involved in introducing new product or production innovations

-Avoid accepting risks associated with a business

A firm is both hiring labor and selling output in purely competitive markets and is maximizing profits. It is currently operating in the elastic range of its MRP curve. If the wage rate increases, its total spending on wages at the new equilibrium will: -Be smaller -Change in an undetermined direction -Be unchanged -Be larger

-Be smaller

Of the two philosophies on how to apportion taxes, which of the following would be based on taxation based on products or services used? -Flat taxation -Benefits- Recieved -Ability To Pay -Progressive Taxation

-Benefits- Recieved

What is the largest category of expenditures at the State level? -Welfare -Public Safety -Highways -Education

-Education

Pure economic rent is the price of a resource with a perfectly: -Elastic demand schedule -Elastic supply schedule -Inelastic demand schedule -Inelastic supply schedule

-Inelastic supply schedule

The more inelastic the demand for a resource the: -Greater the potential for resource substitution -Greater the productivity of the resource -Less elastic its marginal revenue product curve -More elastic its marginal revenue product curve

-Less elastic its marginal revenue product curve

The more inelastic the demand for a resource the: -More elastic its marginal revenue product curve -Greater the productivity of the resource -Greater the potential for resource substitution -Less elastic its marginal revenue product curve

-Less elastic its marginal revenue product curve

Suppose the demand for strawberries rises sharply, resulting in an increased price of strawberries. As it relates to strawberry pickers, we could expect the: -MRC curve to shift downward. -MRP curve to shift to the left. -MRP curve to shift to the right. -MP curve to shift downward.

-MRP curve to shift to the right.

Which tax is NOT based on Income? -Progressive Taxes -Regressive Taxes -Proportional Taxes -None of the above

-None of the above

What is the largest source of revenue at the federal level? -Payroll Taxes -Excise Taxes -Personal Income Taxes -Corporate Taxes

-Personal Income Taxes

A tax that increases as the income increases is called? -Proportional Tax -Progressive Tax -Regressive Tax -Flat Tax

-Progressive Tax

What is the single largest source of revenue at the local level? -Excise Taxes -Sales Taxes -Personal Incone Taxes -Property Taxes

-Property Taxes

An average tax that remains the same regardless of the income level is called? -Corporate Taxes -Excise Tax -Proportional Tax -Regressive Tax

-Proportional Tax

A tax that decreases as the income increases is called? -Progressive Tax -Regressive Tax -Flat Tax -Proportional Tax

-Regressive Tax

Marginal revenue product is the increase in: -Marginal revenue from the use of an additional unit of a resource -Total revenue from the use of an additional unit of a resource -Marginal revenue from a decrease in the price of the product -Total revenue from a decrease in the price of the product

-Total revenue from the use of an additional unit of a resource

Marginal revenue product is the increase in: -Marginal revenue from the use of an additional unit of a resource -Total revenue from the use of an additional unit of a resource -Total revenue from a decrease in the price of the product -Marginal revenue from a decrease in the price of the product

-Total revenue from the use of an additional unit of a resource

If the interest rate is 15%, what is the future of value of $10,000 two years from now? -$7,576 -$13,000 -$13,225 -$225

-$13,225

Suppose that interest payments are $140 per year on a $1,000 loan and $1,188 per year on an $8,485 loan. The interest rates on the two loans are: -14 percent and 20 percent, respectively. -18.8 percent on both loans. -1.4 percent and 11.8 percent, respectively. -14 percent on both loans.

-14 percent on both loans.

What year was the federal income tax as we know it today officially enacted? -1862 -1962 -1913 -2013

-1913

Since 1900, the relative share of income paid to American resource suppliers as corporate profits, interest, and rent has been about: -80 percent -20 percent -10 percent -50 percent

-20 percent

Of the two philosophies on how to apportion taxes, which of the following would be based on the taxpayer's income and wealth? -Benefits - Received -Abililty to Pay -Flat Taxation -Proportional Taxation

-Abililty to Pay

Which is an example of a change in product demand that increases labor demand? -Access to computers increases the productivity of mail order businesses, thus increasing the demand for their workers -Tourism increases in popularity, increasing the demand for workers at tourist resorts -A change in work rules increases output per worker in the auto industry, thus increasing the demand for auto workers -A decrease in the price of trucks decreases the cost of transporting goods, thus increasing the demand for truckers

-Tourism increases in popularity, increasing the demand for workers at tourist resorts

If the wage rate increases: -an imperfectly competitive producer may find it profitable to hire either more or less labor. -a purely competitive and an imperfectly competitive producer will both hire less labor. -an imperfectly competitive producer will hire less labor, but a purely competitive producer will not. -a purely competitive producer will hire less labor, but an imperfectly competitive producer will not.

-a purely competitive and an imperfectly competitive producer will both hire less labor.

If the wage rate increases: -an imperfectly competitive producer will hire less labor, but a purely competitive producer will not. -an imperfectly competitive producer may find it profitable to hire either more or less labor. -a purely competitive and an imperfectly competitive producer will both hire less labor. -a purely competitive producer will hire less labor, but an imperfectly competitive producer will not.

-a purely competitive and an imperfectly competitive producer will both hire less labor.

The rent paid for the pasture land used to graze cattle would increase if: -people decided to consume more beef. -any of the above occurred. -oil deposits were discovered on the land. -the productivity of the land increased.

-any of the above occurred.

Which of the following is not a source of loanable funds? -government budget deficits -commercial bank lending -the saving of households -business saving

-government budget deficits

"Income receivers should be paid in accordance with the value of output each produces." This statement is consistent with the: -concept of compensating wage differences. -least-cost, but not profit-maximizing, combination of inputs. -monopoly theory of income distribution. -marginal productivity theory of income distribution.

-marginal productivity theory of income distribution.

"Income receivers should be paid in accordance with the value of output each produces." This statement is consistent with the: -marginal productivity theory of income distribution. -least-cost, but not profit-maximizing, combination of inputs. -monopoly theory of income distribution. -concept of compensating wage differences.

-marginal productivity theory of income distribution.

Resource X has many close substitutes whereas resource Y has no close substitutes. Other things equal, we would expect: -resources X and Y to be close substitutes. -resource X to be more expensive than resource Y. -the demand for resource X to be more elastic than the demand for resource Y. -the demand for resource Y to be more elastic than the demand for resource X.

-the demand for resource X to be more elastic than the demand for resource Y.

The demand for a resource depends primarily on: -the demand for the product or service that it helps produce. -the elasticity of supply of substitute inputs. -the price of that input. -the supply of that resource.

-the demand for the product or service that it helps produce.

The demand for a resource depends primarily on: -the supply of that resource. -the demand for the product or service that it helps produce. -the price of that input. -the elasticity of supply of substitute inputs.

-the demand for the product or service that it helps produce.

The largest single share of all income earned by Americans consists of: -corporate profits. -interest. -rents. -wages and salaries.

-wages and salaries.