Briefly explain the factors of production and give an example of each.
What will be an ideal response?
Ques. 2Suppose the tax rate on the first 10,000 of income is 0 percent; 10 percent on the next 20,000; 20 percent on the next 20,000; 30 percent on the next 20,000; and 40 percent on income over 60,000. Family A has an income of 55,000.
What is the tax liability of Family A? A) 16,500
B) 6,600
C) 7,500
D) 3,400
Ques. 3A mixed economic system is best described as an economy with a mix of
A) state and federal governments.
B) domestic and foreign buyers.
C) free markets and government control.
D) for-profit organizations and not-for-profit organizations.
Ques. 4The law of demand implies that the demand curve
A) has a negative slope.
B) has a positive slope.
C) shifts to the right when the price of a good increases.
D) shifts to the left when the price of a good decreases.
Ques. 5Briefly explain the difference between the concepts of scarcity and shortage.
What will be an ideal response?
Ques. 6A situation in which a market economy leads to too few or too many resources going to a particular economic activity is known as
A) competition.
B) excessive competition.
C) destructive competition.
D) a market failure.
Ques. 7People often complain about price gouging after a disaster such as a hurricane. Suppose the government successfully prevented price increases due to the disaster. We would expect
A) reconstruction to take longer because the quantity supplied of new materials would increase more slowly.
B) reconstruction to take less time because the demand for materials would increase faster.
C) reconstruction never to occur.
D) reconstruction to take less time because the government could rebuild more quickly when people are not in the way.
Ques. 8Suppose that the demand curve for apples is downward sloping and the price per bushel increases from 6.50 to 7.50. We would then expect
A) the demand for apples to decrease.
B) the quantity of apples demanded to fall.
C) the demand curve to shift toward the origin.
D) the quantity of apples demanded to increase.
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