Module 4 test

Contracts do which of the following?

(All of these) 1. Specify the terms of an agreement between parties 2. Encourage economic activity 3. Create a legal agreement enforceable by law 4. Facilitate trust between parties in a market

Which of the following is true when a beekeeper's bees pollinate the crops of the farmer next door?

(all of these) 1. It is a positive externality 2. there is an external benefit in the market 3. the market level of bees is below the efficient level 4. the farmer's private benefits are increased

_____ is a safety net program that provides healthcare.

CHIP

The United States most closely resembles which type of economic system?

Mixed

Which of the following is a NOT public good provided by the government?

Pollution

Antitrust laws make ___________ illegal.

anti-competitive behavior

Which of the following is NOT a public good provided by the government?

healthcare

Which of the following is a major spending category of the federal government?

healthcare

The federal government relies most heavily on which type of revenue?

income taxes

When the government requires safety inspections for cars it is trying to limit a market failure due to __________

negative externalities

An accident caused by texting and driving is an example of a(n) _______.

negative externality

If a low income family pays 15% of their income in taxes and a high income family pays 5% of their income in taxes, the tax system is

regressive

Fish in the ocean are

rival and nonexcludable

The government is NOT likely to address a positive externality using

taxes