1.An INCREASE IN THE SUPPLY OF A PRODUCT WOULD MOST LIKELY BE CAUSED BY WHICH ONE?

[hewlett]

(a) AN INCREASE IN BUSINESS TAXES
(b) AN INCREASE IN CONSUMER INCOMES
(c) A DECREASE IN RESOURCE COSTS FOR PRODUCTION
(d) A DECREASE IN THE PRICE FOR A COMPLEMENTARY


2. IF THE QUANTITY SUPPLIED OF A PRODUCT IS GREATER THAN
THE QUANTITY DEMANDED FOR A PRODUCT, THEN

(a) THERE IS A SURPLUS OF THE PRODUCT
(b) THERE IS A SHORTAGE OF THE PRODUCT
(c) THE PRODUCT IS A NORMAL PRODUCT
(d) THE PRODUCT IS A NORMAL PRODUCT


3.IF THE PRICE OF A PRODUCT IS BELOW THE EQUILIBRIUM
PRICE, THE RESULT WILL BE
(a) A DECREASE IN THE SUPPLY OF THE GOOD
(b) AN INCREASE IN THE DEMAND FOR THE GOOD
(c) A SHORTAGE OF THE GOOD
(d) A SURPLUS OF THE GOOD

4. THE LAW STATED BY ALFRED MARSHALL IN 1890 THAT STATED
WHEN THE PRICE OF A PRODUCT DECREASES, PEOPLE TEND TO BUY MORE OF IT IS CALLED
(a) THE LAW OF SUPPLY
(b) THE LAW OF DEMAND
(c) THE LAW OF CONSUMER ADVANTAGE
(d) THE LAW OF COMPARATIVE ADVANTAGE

5.THE AMOUNT OF A PRODUCT THAT A HOUSEHOLD WOULD BUY
IN A GIVEN PERIOD IF IT COULD BUY ALL IT WANTED AT THE CURRENT MARKET PRICE IS CALLED
(a) QUANTITY SUPPLIED
(b) QUANTITY DEMANDED
(c) HOUSEHOLD DEMAND
(d) HOUSEHOLD SUPPLY


6.THE LAW OF DEMAND STATES THAT OTHER THINGS BEING EQUAL AS PRICE INCREASES
(a) DEMAND INCREASES
(b) DEMAND DECREASES
(c) QUANTITY DEMANDED INCREASES
(d) QUANTITY DEMANDED DECREASES



7. HOW DO PUBLIC GOODS DIFFER FROM PRIVATE GOODS?
PUBLIC GOODS ARE CHARACTERIZED BY:
(a) NONRIVALRY AND NONEXCLUDABILITY
(b) NONRIVALRY AND EXCLUDABILITY
(c) RIVALRY AND NONEXCLUDABILITY
(d) RIVALRY AND EXCLUDABILITY


8. WHICH IS THE CHARACTERISTIC OF A PRIVATE GOOD?
(e) NONRIVALRY
(f) RIVALRY
(g) NONEXCLUDABILITY
(h) A FREE RIDER PROBLEM

\


9. THE PRODUCTION OF OF GOODS AND SERVICES UNDER THE ASSUMPTION OF LEAST-COST PRODUCTION IS REFERRED TO AS
(a) A POSITIVE EXTERNALITY
(b) A NEGATIVE EXTERNALITY
(c) PRODUCTIVE EFFICIENCY
(d) ALLOCATIVE EFFICIENCY

10. THE PRINCIPLE THAT PEOPLE WHO HAVE GREATER INCOME SHOULD PAY A GREATER PORPORTION OF IT IN TAXES THAN THOSE WHO HAVE LESS INCOME IS CALLED
(a) BENEFIT S- RECEIVED PRINCIPLE
(b) PROPORTIONAL TAX PRINCIPLE
(c) FAIR TAX PRINCIPLE
(d) ABILITY TO PAY PRINCIPLE

11. ASSUME THAT THE U.S. GOVERNMENT IS CONSIDERING A NEW
WEAPONS SYSTEM PROGRAM AND MAY CHOOSE TO INCLUDE IN THIS PROGRAM ANY NUMBER OF FOUR DIFFERENT PROJECTS.
THE MARGINAL COSTS AND MARGINAL BENEFITS OF EACH OF THE FOUR PROJECTS ARE GIVEN IN THE TABLE BELOW. SELECT THE PROJECT NUMBER WHICH BEST INDICATES WHAT TOTAL AMOUNT THE GOVERNMENT SHOULD SPEND ON THE NEW WEAPONS PROGRAM?


PROJECT MARGINAL COST MARGINAL BENEFIT
#1 $ 5 MILLION $7 MILLION
#2 $ 2 MILLION $3 MILLION
#3 $11 MILLION $1O MILLION
#4 $20 MILLION $ 20 MILLION




12. WHICH IS THE BEST EXAMPLE OF A GOOD OR SERVICE
PROVIDING THE ECONOMY WITH A NEGATIVE EXTERNALITY?
(a) A BUSINESS SUITE
(b) A TEXTBOOK
(c) AN AUTOMOBILE
(d) AN AUDIT




13 . HOW DOES GOVERNMENT CORRECT FOR POSITIVE
EXTERNALITIES?
(a) BY TAXING CONSUMERS
(b) BY SUBSIDIZING PRODUCERS
(c) BY TAXING PRODUCERS
(d) BY SEPARATING OWNERSHIP FROM CONTROL

14. WITH A FEDERAL INCOME TAX, AS INCOME
(a) INCREASES, THE TAX RATE REMAINS THE SAME
(b) DECREASES, THE TAX RATE DECREASES
(c) INCREASES, THE TAX RATE DECREASES
(d) INCREASES, THE TAX RATE INCREASES


15. WHICH TENDS TO BE A PROPORTIONAL INCOME TAX IN THE
UNITED STATES?
(a) PROPERTY TAX
(b) FEDERAL INCOME TAX
(c) CORPORATE INCOME TAX
(e) PAYROLL TAX


16.A CHANGE IN THE PRICE OF A GOOD OR SERVICE LEADS TO A
(a) CHANGE IN QUANTITY DEMANDED
(b) MOVEMENT ALONG THE DEMAND C URVE
(c) CHANGE IN QUANTITY SUPPLIED
(d) CHANGE IN DEMAND


17.WHERAS A CHANGE IN THE INCOMES, PREFERENCES OF PRICES
OF OTHER GOODS AND SERVICES LEADS TO
(a) A CHANGE IN SUPPLY
(b) A CHANGE IN DEMAND
(c) A SHIFT IN THE DEMAND CURVE
(d) CHANGE IN QUANTITY DEMANDED


18.THE LAW OF DEMAND HAS A CERTAIN RELATIONSHIP BETWEEN
PRICE AND QUANTITY DEMANDED. THIS RELATIONSHIP IS CONSIDERED TO BE
(a) POSITIVE OR DIRECT
(b) NEGATIVE OR INVERSE
(c) CONSTANT
(d) EQUAL
19. THE LAW OF SUPPLY HAS A CERTAIN RELATIONSHIP BETWEEN PRICE AND QUANTITY SUPPLIEDTHIS RELATIONSHIP IS CONSIDERED TO BE
(a) NEGATIVE OR INVERSE
(b) POSITIVE OR DIRECT
(c) CONSTANT
(d) EQUAL





GOOD

[muata2]

Really?