Which of the four types of economic decision makers is most important?
a.
firms, because they produce all goods and services in the economy
b.
households, because they demand goods and services and supply resources
c.
government, because it ultimately sets and enforces the "rules of the game"
d.
government, because it steps in when there is market failure
e.
the rest of the world, because there are over 150 countries
b.
households, because they demand goods and services and supply resources
Households act as suppliers when they provide
a.
goods and services to firms and governments
b.
resources to firms and governments
c.
tax payments to governments
d.
the demand for only what firms supply or make available
e.
money to firms in exchange for goods and services
b.
resources to firms and governments
Households act as demanders when they demand
a.
that corporate executives and government officials be held accountable for their actions
b.
dividends from the stocks they hold
c.
interest and capital gains from the bonds they hold
d.
goods and services from firms and the government
e.
payment for the goods and services they sell to firms and governments
d.
goods and services from firms and the government
Households act as demanders when they
a.
vote for President
b.
recieve dividends from the stocks they hold
c.
recieve interest and capital gains from the bonds they hold
d.
buy a car from the local car dealer
e.
recieve payment for resources they provide to a Fortune 500 company
d.
buy a car from the local car dealer
The movement of households from rural to urban settings reduced the degree of specialization in household production.
a.
True
b.
False
a. true
As the real wage increases, the opportunity cost of working outside the home increases.
a.
True
b.
False
a. true
The movement in U.S. population from the farms to urban areas was caused primarily by
a.
each member of a farm family specializing in a particular set of tasks
b.
a sharp increase in farm productivity
c.
a decline in the demand for labor in urban areas
d.
a sharp decline in the demand for agricultural products
e.
increased education among married women
b.
a sharp increase in farm productivity
In the United States since World War II, there has been
a.
a dramatic increase in the population living in rural areas
b.
a decline in the number of women in the labor force
c.
a decrease in the opportunity cost of working in the home
d.
more specialization of production within households
e.
a dramatic increase in the number of married women in the labor force
e.
a dramatic increase in the number of married women in the
labor force
Which of the following is one of the chief reasons for the increased number of married women in the U.S. work force?
a.
The marginal cost of working in the labor force has increased.
b.
Jobs provide greater independence and self-worth.
c.
The opportunity cost of household work has increased.
d.
The sunk cost of household appliances has risen to the point that women must work to make payments on them.
e.
Women spend more time in the market as a result of the increasing division of labor in household production.
c.
The opportunity cost of household work has increased.
Which of the following is a result of increased real wages in the United States?
a.
a decrease in the quantity of services demanded by households
b.
an increase in the opportunity cost of remaining employed in the home
c.
a decrease in the opportunity cost of working outside the home
d.
a decline in the number of households providing labor outside the home
e.
reduced use of labor-saving devices in households
b.
an increase in the opportunity cost of remaining employed in
the home
One explanation for the increased participation of married women in the U.S. labor force is that
a.
fewer women are being trained for household work by the public school system
b.
rapid growth in the service sector has provided additional job opportunities for women
c.
the cost of professional day care has increased
d.
couples are having more children
e.
husbands earn more today than they did previously
b.
rapid growth in the service sector has provided additional
job opportunities for women
If the real wage decreases, the opportunity cost of working in the home will
a.
increase
b.
decrease
c.
not be affected
d.
increase as long as worker productivity also rises
e.
increase only if households want to maintain their standard of living
b.
decrease
The increased labor force participation of married women in the United States is most often explained by
a.
declining productivity in agricultural production
b.
a rise in average household size
c.
increased education and an increased demand for labor
d.
the decreased opportunity cost of working in the home
e.
declining productivity in household production
c.
increased education and an increased demand for labor
Harold, a delivery man, washes and irons his own shirts. Sarah, his boss, sends her clothes to a laundry. Which is the most plausible economic explanation for this difference?
a.
Harold must enjoy ironing more than Sarah does.
b.
Harold must be better at ironing than Sarah is.
c.
The opportunity cost of ironing is greater for Harold.
d.
Harold probably has an absolute advantage in ironing.
e.
Sarah has a higher opportunity cost of laundering her clothes than Harold does.
e.
Sarah has a higher opportunity cost of laundering her clothes
than Harold does.
The term "utility" means
a.
satisfaction
b.
a low-valued good
c.
productivity
d.
adaptability
e.
efficiency
a.
satisfaction
The statement "Households maximize utility" means that households
a.
try to be as useful as possible to the economy
b.
are only interested in maximizing their earnings
c.
are assumed to buy useful things before they buy luxuries
d.
are only interested in acquiring material wealth
e.
are assumed to do what they think will increase their satisfaction
e.
are assumed to do what they think will increase their satisfaction
The objective of the household is to
a.
maximize household wealth
b.
own as much land as possible
c.
save as much money as possible
d.
acquire as many goods as possible
e.
maximize utility
e.
maximize utility
Economists generally assume that
a.
firms act to maximize the dividends paid to stockholders
b.
households act to maximize their wealth
c.
households act to maximize utility
d.
firms act to maximize revenue
e.
both households and firms act to minimize expenditures
c.
households act to maximize utility
Roxanne and Eileen live in an apartment building with a laundry room in the basement. Roxanne does her laundry at home, spending $4 and 5 hours per week. Eileen sends her laundry out, spending $20 and 15 minutes per week transporting the laundry. On the basis of the information given, which one of the following must be true?
a.
Roxanne earns more labor income than Eileen.
b.
Eileen earns more total income than Roxanne.
c.
Roxanne enjoys doing laundry; Eileen does not.
d.
Eileen has less laundry than Roxanne.
e.
Eileen and Roxanne attach different utilities to time spent doing laundry.
e.
Eileen and Roxanne attach different utilities to time spent
doing laundry.
Mark and Charles are roommates at college. Each has written a 25-page term paper for the same English class. They are equally poor typists. Charles types his own paper and gets paid by Mark to type his, too. On the basis of the information given, which one of the following must be true?
a.
Mark is wealthier than Charles.
b.
Mark needs more time to study than Charles.
c.
Charles hates typing.
d.
Mark and Charles have different utilities for typing but place the same value on time.
e.
Mark's opportunity cost of typing is higher than Charles's.
e.
Mark's opportunity cost of typing is higher than Charles's.
Rationality in the household decision-making process means that
a.
all households make the same decisions
b.
everyone in the household agrees on all decisions
c.
households act in their own best interests
d.
households want to earn as much income as possible
e.
all households would make the same decisions given the same information on products qualities and prices
c.
households act in their own best interests
Personal income in the United States is primarily determined by selling labor services.
a.
True
b.
False
a. true
Which resource generates the largest share of the income in the United States?
a.
labor
b.
land
c.
capital
d.
entrepreneurial ability
e.
money
a. labor
Which of the following is an example of an in-kind transfer?
a.
welfare payments
b.
most Social Security benefits
c.
unemployment compensation payments
d.
food stamps
e.
charitable contributions
d. food stamps
Which of the following represents the largest source of income for U.S. households?
a.
personal interest
b.
proprietor's income
c.
wages and salaries
d.
rental income
e.
transfer payments
c.
wages and salaries
Which of the following represents the best example of proprietor’s income?
a.
the paycheck that Freeda brings home from her job as a computer programer
b.
the interest that Hans earns from the savings account he has with USA Bank
c.
the revenue that Janet has left over after she pays all the expenses associated with running her software development business
d.
the check that Hunter receives each month for leasing his land to the natural gas company that is drilling on his land
e.
the check that Trisha gets each month from the Social Security Administration
c.
the revenue that Janet has left over after she pays all the
expenses associated with running her software development business
Which of the following represents the best example of wages and salaries?
a.
the paycheck that Freeda brings home from her job as a computer programer
b.
the interest that Hans earns from the savings account he has with USA Bank
c.
the revenue that Janet has left over after she pays all the expenses associated with running her software development business
d.
the check that Hunter receives each month for leasing his land to the natural gas company that is drilling on his land
e.
the check that Trisha gets each month from the Social Security Administration
a.
the paycheck that Freeda brings home from her job as a
computer programer
Which of the following represents the best example of personal interest?
a.
the paycheck that Freeda brings home from her job as a computer programer
b.
the interest that Hans earns from the savings account he has with USA Bank
c.
the revenue that Janet has left over after she pays all the expenses associated with running her software development business
d.
the check that Hunter receives each month for leasing his land to the natural gas company that is drilling on his land
e.
the check that Trisha gets each month from the Social Security Administration
b.
the interest that Hans earns from the savings account he has
with USA Bank
Which of the following represents the best example of rental income?
a.
the paycheck that Freeda brings home from her job as a computer programer
b.
the interest that Hans earns from the savings account he has with USA Bank
c.
the revenue that Janet has left over after she pays all the expenses associated with running her software development business
d.
the check that Hunter receives each month for leasing his land to the natural gas company that is drilling on his land
e.
the check that Trisha gets each month from the Social Security Administration
d.
the check that Hunter receives each month for leasing his
land to the natural gas company that is drilling on his land
Which of the following represents the best example of a transfer payment?
a.
the paycheck that Freeda brings home from her job as a computer programer
b.
the interest that Hans earns from the savings account he has with USA Bank
c.
the revenue that Janet has left over after she pays all the expenses associated with running her software development business
d.
the check that Hunter receives each month for leasing his land to the natural gas company that is drilling on his land
e.
the check that Trisha gets each month from the Social Security Administration
e.
the check that Trisha gets each month from the Social
Security Administration
Luigi owns and operates a small restaurant. The income he receives from the restaurant is classified as
a.
saving
b.
proprietor's income
c.
wages and salaries
d.
rental income
e.
dividends
b.
proprietor's income
Raghib teaches mathematics at Camford University and receives $40,000 per year. His spouse, Noraini, works as a self-employed computer programmer and charges $40 per hour. Which of the following is true?
a.
Raghib's income is personal interest; Noraini's is wages
b.
Raghib's income is a salary; Noraini's is personal interest
c.
Both Raghib and Noraini receive proprietor's income
d.
Both Raghib and Noraini receive wage or salary income
e.
Raghib's income is a salary, and Noraini's income is a proprietor's income
e.
Raghib's income is a salary, and Noraini's income is a
proprietor's income
Households supply four basic types of resources. They include all of the following except
a.
natural resources
b.
final goods and services
c.
capital
d.
entrepreneurial ability
e.
labor
b.
final goods and services
Which of the following is the best example of the ownership of the resource called capital
a.
John Smith’s ownership of 10 shares of a manufacturer of farm tractors
b.
Pogo O’Reilly’s ownership of 10 shares of a natural gas extraction company
c.
Helen Restock’s ownership of a $10,000 savings bond
d.
Abe Hawthorne’s college degree in marketing
e.
Ann Stump’s creative, risk-taking personality
a.
John Smith’s ownership of 10 shares of a manufacturer of farm tractors
Which of the following is the best example of the ownership of the resource called land
a.
John Smith’s ownership of 10 shares of a manufacturer of farm tractors
b.
Pogo O’Reilly’s ownership of 10 shares of a natural gas extraction company
c.
Helen Restock’s ownership of a $10,000 savings bond
d.
Abe Hawthorne’s college degree in marketing
e.
Ann Stump’s creative, risk-taking personality
b.
Pogo O’Reilly’s ownership of 10 shares of a natural gas
extraction company
Which of the following is the best example of the ownership of the resource called labor
a.
John Smith’s ownership of 10 shares of a manufacturer of farm tractors
b.
Pogo O’Reilly’s ownership of 10 shares of a natural gas extraction company
c.
Helen Restock’s ownership of a $10,000 savings bond
d.
Abe Hawthorne’s college degree in marketing
e.
Ann Stump’s creative, risk-taking personality
d.
Abe Hawthorne’s college degree in marketing
Which of the following is the best example of the ownership of the resource called entrepreneurship
a.
John Smith’s ownership of 10 shares of a manufacturer of farm tractors
b.
Pogo O’Reilly’s ownership of 10 shares of a natural gas extraction company
c.
Helen Restock’s ownership of a $10,000 savings bond
d.
Abe Hawthorne’s college degree in marketing
e.
Ann Stump’s creative, risk-taking personality
e.
Ann Stump’s creative, risk-taking personality
The fastest-growing component of U.S. personal consumption is services.
a.
True
b.
False
a. true
Household income is spent on all of the following except one. Which is the exception?
a.
services
b.
tax payments
c.
durable goods
d.
nondurable goods
e.
dividends
e. dividends
Which of the following is an example of a durable good?
a.
food prepared at home
b.
food eaten at a restaurant
c.
high-fashion clothing
d.
binoculars
e.
motor oil
d.
binoculars