Social Security taxes are paid by
A) employers only.
B) employees only.
C) both employers and employees.
D) neither employers nor employees.
Ques. 2If the production possibilities curve is a downward sloping straight line, then
A) resources are highly specialized, making it difficult to use them for alternative uses.
B) technological change has increased.
C) production is efficient only when producing at the mid-point.
D) all resources must be perfectly adaptable for alternative uses.
Ques. 3A nation's technological gains have increased labor productivity and, as a result, the average number of hours worked each week has been falling. How do Gross Domestic Product (GDP) calculations account for this shortening of the average workweek?
A) Real Gross Domestic Product (GDP) does not factor in an increase in leisure time but per capita real Gross Domestic Product (GDP) does.
B) Neither real Gross Domestic Product (GDP) nor per capita real Gross Domestic Product (GDP) includes the increase in leisure time that results, so the nation's actual economic growth will be overstated.
C) Gains in leisure time are dollar-valued and included in real per capita Gross Domestic Product (GDP) gains.
D) Gains in leisure time are not included in Gross Domestic Product (GDP), so any increase in real per capita Gross Domestic Product (GDP) will understate the nation's actual economic growth.
Ques. 4If the government spends less than what it receives in taxes during a given interval, then the result is
A) a balanced budget.
B) an entitlement.
C) unrealized public debt.
D) a government budget surplus.
Ques. 5An economic model should capture
A) the essential relationships that help to analyze the problem.
B) all possible variables that apply to the problem.
C) only social value related variables.
D) all of the above.
Ques. 6Is it possible to see gains in a nation's real standard of living without any positive economic growth?
A) No, a nation's standard of living cannot improve without economic growth.
B) Yes, but only if the government prints more money so people feel rich.
C) Yes, if workers can produce the same level of output in fewer work hours, so that more leisure time could push up the real standard of living.
D) None of the above: Economic growth has nothing to do with a nation's standard of living.
Ques. 7In the above figure, the demand curve for Good A shifts from D1 to D2 in Graph A when the price of Good B changes from P1 to P2 in Graph B. We can conclude that
A) Good A and Good B are substitutes.
B) Good A and Good B are complements.
C) Good A is a normal good but Good B is an inferior good.
D) Good A and Good B are unrelated.
Ques. 8Refer to the above figure. An external cost exists. The amount of that cost is represented by
A) P2.
B) Q1.
C) the vertical distance between point A and the supply curve S1.
D) the distance between C and A.
Ques. 9The largest source of receipts for the federal government is
A) corporate income taxes.
B) personal income taxes.
C) capital gains taxes.
D) Social Security taxes.
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