Question 1

Which of the following is not primarily a function of the federal government?

Accepted Answer

Higher education primarily falls under the jurisdiction of state and local governments, not the federal government.

Question 2

A group of farmers in southwestern Pennsylvania bought a pesticide-free pasture.They sold their locally raised organic beef in the butcher shop they owned together.This group of farmers would be identified as a(n):

Accepted Answer

The group of farmers who are working together to produce organic beef and sell it in their shared butcher shop are operating as a producer cooperative, which is a type of business organization where members work together to market and sell their products. This allows them to pool their resources, share costs, and promote their goods more effectively than they would be able to do as individual farmers.

Question 3

Which of the following is the best example of a public good?

Accepted Answer

Public goods are goods that are non-excludable (meaning people cannot be excluded from using them) and non-rivalrous (meaning one person's use of them does not diminish their availability to others). Police services fit this description as they are available to all members of society and one person's use of police services does not diminish their availability to others.

Question 4

You are more likely to repair a leaky drainpipe yourself than hire a plumber:

Accepted Answer

If the opportunity cost of your time decreases, it means that you have more free time available to spend on activities like repairing a leaky drainpipe. In this situation, it may be more cost-effective to do the repair yourself rather than hiring a plumber.

Question 5

The Salvation Army is an example of a(n):

Accepted Answer

The Salvation Army is a well-known not-for-profit organization that provides assistance and support to people in need, including homeless individuals and families, disaster victims, and those struggling with addiction or poverty. They rely on donations and volunteers to carry out their mission, rather than making a profit.

Question 6

Despite specialization and comparative advantage,household production still exists because for some households:

Accepted Answer

Household production persists when it is less costly for households to produce goods or services at home than to purchase them in the market. This can be due to various factors, including the savings on the cost of labor, transportation, or the premium prices of market goods.

Question 7

Household production is more likely to occur when:

Accepted Answer

Household production is more likely to occur when it requires few specialized resources because households typically do not have access to a wide range of specialized resources or technologies that are required in market production. Therefore, they are more likely to engage in household production using basic resources that they already have at hand.

Question 8

The funds to pay for police protection are usually raised through taxation because:

Accepted Answer

The answer of The funds to pay for police protection...

Question 9

Household production is more likely to occur when:

Accepted Answer

Household production is more likely to occur when the individual or household desires more control over the final product. This may include the desire for a specific taste or quality, or simply the satisfaction of producing something oneself.

Question 10

Natural monopolies occur when:

Accepted Answer

Natural monopolies occur when one firm can produce goods or services at a lower cost than multiple firms due to economies of scale. This gives them a competitive advantage and makes it difficult for new firms to enter the market and be profitable.

Question 11

You are more likely to hire your teenage child than a landscaping firm to mow your lawn:

Accepted Answer

Opportunity cost refers to the value of the next best alternative forgone. If the teenager has fewer opportunities for income and enjoys mowing the lawn, then their opportunity cost of mowing the lawn is low. On the other hand, the landscaping firm has specialized tools, equipment, and a skilled workforce that can be used for higher-paying jobs. Therefore, the opportunity cost of mowing the lawn for the landscaping firm is higher than that of the teenager. Hence, the homeowner is more likely to hire the teenager than the landscaping firm to mow the lawn.

Question 12

Household production is more likely to occur when:

Accepted Answer

Household production is more likely to occur when the opportunity cost of household work is relatively small. This means that the value of the household work is not high enough to justify the cost of market production. For example, if the cost of hiring a gardener to maintain a small garden is high, it may be more cost-effective for the homeowner to do the gardening themselves. Conversely, if the cost of hiring a gardener is relatively low, the homeowner may choose to pay for the service rather than doing it themselves.

Question 13

Which of the following is a reason why government is a participant in a market-oriented economy?

Accepted Answer

Government intervention is required to ensure contract enforcement and protect private property, which are essential for the functioning of a market economy.

Question 14

Contracts are enforced by:

Accepted Answer

Contracts are typically enforced by the government through the judicial system. If one party fails to fulfill their obligations under the contract, the other party can bring a lawsuit to seek enforcement and damages. Courts can use their legal authority to compel parties to comply with the terms of the contract or award compensation to the injured party.

Question 15

You are more likely to hire a plumber to repair a leaky drainpipe:

Accepted Answer

If the opportunity cost of your time has increased, it means that your time has become more valuable and should be spent on activities that generate higher returns for you. In this case, hiring a plumber to repair a leaky drainpipe would be a better use of your time and resources than attempting to fix it yourself. This is because plumbing repair work requires specialized skills, knowledge, and tools that you may not have, and it could take you much longer to complete the task than a professional plumber.

Question 16

Which of the following is not an example of a business operated by a consumer cooperative?

Accepted Answer

Sunkist is a farm cooperative owned and operated by citrus growers, not a consumer cooperative. The other options (grocery store, apartment building, health plan, electric power facility) are all examples of businesses that can be operated by consumer cooperatives.

Question 17

Government antitrust laws were designed to:

Accepted Answer

The answer of Government antitrust laws were designed to:
...

Question 18

Which of the following is not a reason why some production continues in households?

Accepted Answer

The answer of Which of the following is not a...

Question 19

One thing that is not true about cooperatives is that they:

Accepted Answer

The answer of One thing that is not true about...

Question 20

Which of the following is a defining characteristic of a public good?

Accepted Answer

A defining characteristic of a public good is that it is non-excludable, meaning that once it is produced, it is impossible to prevent people from accessing it. This is why it is freely available to everyone. It is not necessarily produced or distributed by the government, nor is the decision to produce it always made through a voting process. It can be produced and distributed by private firms, but with government regulations to ensure that it remains non-excludable. The fact that it is purchased by government agencies is not a defining characteristic of a public good.

Quiz 3: Economic Decision Makers

Which of the following is not primarily a function of the federal government?

A group of farmers in southwestern Pennsylvania bought a pesticide-free pasture.They sold their locally raised organic beef in the butcher shop they owned together.This group of farmers would be identified as a(n) :

Which of the following is the best example of a public good?

You are more likely to repair a leaky drainpipe yourself than hire a plumber:

The Salvation Army is an example of a(n) :

Despite specialization and comparative advantage,household production still exists because for some households:

Household production is more likely to occur when:

The funds to pay for police protection are usually raised through taxation because:

Household production is more likely to occur when:

Natural monopolies occur when:

You are more likely to hire your teenage child than a landscaping firm to mow your lawn:

Household production is more likely to occur when:

Which of the following is a reason why government is a participant in a market-oriented economy?

Contracts are enforced by:

You are more likely to hire a plumber to repair a leaky drainpipe:

Which of the following is not an example of a business operated by a consumer cooperative?

Government antitrust laws were designed to:

Which of the following is not a reason why some production continues in households?

One thing that is not true about cooperatives is that they:

Which of the following is a defining characteristic of a public good?