An economic system is : (Multiple Choice)

An economic system is
 
  A) the universe of all resources.
  B) a way to create new resources.
  C) a mechanism to allocate scarce resources.
  D) an organization that generates profits.

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Ques. 2

Market failures
 
  A) prevent the price system from attaining economic efficiency.
  B) result in quantities and prices that are socially desirable.
  C) strengthen economic efficiency by forcing unprofitable firms to close.
  D) weaken the argument for government intervention in the economy.

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Ques. 3

Over the long run, a government's fundamental source of revenues is
 
  A) printing money.
  B) user fees and taxes.
  C) exports.
  D) gold sales.

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Ques. 4

All of the following are resources EXCEPT
 
  A) doctors because they perform services.
  B) the land the Statue of Liberty sits on.
  C) the computer in the student computer lab.
  D) money.

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Ques. 5

If both the demand for and the supply of computers are increasing, which of the following statements is TRUE?
 
  A) The consumer should buy a computer now since the price will be higher in the future.
  B) The consumer should wait and buy a computer later since the price will be lower in the future.
  C) The price of a computer will be the same in the future as it is now.
  D) It is impossible to know, given only this information, whether the prices of computers will go up or down in the future.

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Ques. 6

Distinguish between macroeconomics and microeconomics.
 
  What will be an ideal response?

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Ques. 7

As demand for MP3 music downloads increases, other things being equal, we can expect
 
  A) a decrease in both the relative price and quantity of MP3 music downloads.
  B) a decrease in the supply of MP3 music downloads.
  C) more MP3 music downloads to be produced.
  D) an excess number of MP3 music downloads in the market.

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Ques. 8

How do taxation and user charges compare as government revenue sources?
 
  A) Each generates about the same amount of government revenue.
  B) Revenues from taxation are much greater than revenues from user charges.
  C) User charges generate much more revenue than do taxes.
  D) We don't know because the government does not publish revenue figures broken down.