Which of the following is an advantage of a command economy?

It can change direction drastically in a short time

The three criteria for effective taxes are

Equity, simplicity and efficiency

All of the following are characteristics of rationing EXCEPT

provides an efficient link between producers and consumers

All of the following can cause an increase in supply EXCEPT

Fewer sellers in the marketplace

designed to raise revenue and reduce consumption of products

Which is NOT an advantage of a traditional economy?

Promotes new ideas and ways of doing things

The Law of Demand states that

More will be purchased at low prices than at high ones

The Law of Supply states

The quantity supplied varies directly with it price

Which is NOT a strength of a market economy?

It supports all of its people equally

The ability-to-pay principle of taxation states that

People should be taxed according to their ability to pay

Which of the following is NOT a capital good?

a television set for sale at an appliance store

What are the factors of production?

Capital, land, labor, entrepreneurs

Which of the following is more likely to cause a change in the quantity demanded for a product?

A massive decrease the price of the product

All of the following are determinants of demand elasticity EXCEPT

Whether the product has utility

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Questions 33

Answers

1
Which of the following is an advantage of a command economy?
Requires a large decision-making bureaucracy
There is no incentive to work hard
Does not meet the demands of consumers
It can change direction drastically in a short time
2
Statistical series of 30 representative stocks used to monitor prices changes
dividend
customs duty
gift tax
Dow Jones Industrial Average
3
The three criteria for effective taxes are
Efficiency, simplicity, and regressive
Equity, progressiveness and efficiency
Equity, simplicity and efficiency
Efficiency, simplicity and progressiveness
4
All of the following are examples of complements EXCEPT
Butter and margarine
Flashlights and batteries
Cameras and film
Peanut butter and jelly
5
Which of the following is an example of a consumer good?
An oil change
A car wash
A tune-up
A car
6
All of the following are characteristics of rationing EXCEPT
provides an efficient link between producers and consumers
Rationing creates high administrative costs
Rationing is often viewed as unfair
Rationing decreases the incentive to work
7
All of the following can cause an increase in supply EXCEPT
A decrease in the cost of inputs
An increase in productivity
A change in taxes or subsides
Fewer sellers in the marketplace
8
Which product is likely to have the most elastic supply?
Dishwashing machines
Ships
Automobiles
Ice cream cones
9
If there is a surplus in the market, the price is likely to
Remain the same
Increase
Fluctuate
Decrease
10
A sin tax is
Simple tax levied on most consumer purchases
imposes the same percentage rate of taxation on everyone
Complex tax on people’s earnings
designed to raise revenue and reduce consumption of products
11
Which is NOT an advantage of a traditional economy?
Promotes new ideas and ways of doing things
It is clear what needs to be produced
Everyone knows which role to play
There is little question as to how to produce
12
The Law of Demand states that
All people have the ability, desire, and willingness to buy
same amount will be purchased at low prices than at higher
Less will be purchased at low prices than at high ones
More will be purchased at low prices than at high ones
13
The lowest legal price that can be charged for a product
opportunity costs
price ceiling
price floor
subsides
14
Tax on imported products
dividend
customs duty
gift tax
Dow Jones Industrial Average
15
The Law of Supply states
The quantity supplied varies directly with it price
The quantity demanded varies inversely with it price
The quantity supplied varies irregularly with its price
The quantity supplied varies inversely with it price
16
The individual income tax is a
Regressive tax
Progressive tax
Proportional tax
Gift tax
17
The maximum legal price that can be charged for a product
Price floor
Price ceiling
Opportunity cost
Subsides
18
A payment to stock holders representing a portion of corporate profit
Dow Jones Industrial Average
dividend
gift tax
customs duty
19
If there is a shortage in a market, the price is likely to
Remain the same
Fluctuate
Increase
Decrease
20
What is the single largest source of revenue for the federal government?
Corporate income tax
Individual income tax
Customs duty
FICA taxes
21
Which of the following is considered a service?
A Haircut
Hair spray
Scissors
A blow dryer
22
Taxes have all of the following economic effects EXCEPT
Removing sources of revenue
Altering resource allocation
Affecting a nation’s productivity and growth
Changing consumer behavior
23
Tax on donation of money or wealth that is paid by the donor
dividend
gift tax
customs duty
Dow Jones Industrial Average
24
Government payment to encourage or protect a certain economic activity
opportunity costs
subsides
price ceiling
price floor
25
What is NOT a basic economic question?
How to produce
What to produce
For whom to produce
Who can produce
26
Which is NOT a strength of a market economy?
It can adjust to change over time
It supports all of its people equally
It gives producers and consumers freedom
It has decentralized decision making
27
The ability-to-pay principle of taxation states that
Only people who have the ability to pay should be taxed
If you benefit from government services, you pay for them
People should be taxed according to their ability to pay
Taxes collected if citizens have the ability to pay
28
Which of the following products does not have relatively inelastic demand?
Stereo equipment
A doctor’s services
Prescription drugs
Weekly groceries
29
Which of the following is NOT a capital good?
a cash register at a clothing store
an oven at a bakery
a television set for sale at an appliance store
a bulldozer at a construction site
30
What are the factors of production?
Capital, land, labor, transportation
Capital, land, machines, entrepreneurs
Capital, land, labor, entrepreneurs
Capital, machines, labor, entrepreneurs
31
Which of the following is more likely to cause a change in the quantity demanded for a product?
Changing prices of related products
A moderate increase in consumer income
Changing consumer tastes
A massive decrease the price of the product
32
The next best alternative use of resources when one choice is made rather than another
subsides
price floor
price ceiling
opportunity costs
33
All of the following are determinants of demand elasticity EXCEPT
Whether the product has utility
Whether there are adequate substitutes for the product
Whether the purchase requires a large portion of income
hether the purchase can be delayed

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