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Econ
ch 3 quiz
| Question | Answer |
|---|---|
| private goods features | 1. rival in consumption 2. exclusive |
| means that the amount consumed by one person is unavailable for others to consume | rival in consumption |
| suppliers can easily exclude those who don't pay | exclusive |
| examples of public goods | national defense the Centers for Disease Control neighborhood mosquito-control program |
| goods with two features (1) the amount consumed by one person is unavailable to others, and (2) non payers can easily be excluded | private goods |
| goods that, once produced, are available to all, but the producer cannot easily exclude non payers | public goods |
| one person's benefit does not reduce the amount available to others | nonrival in consumption |
| once the good is produced, the marginal cost of providing the good to an additional customer is zero; available for all to consume | nonexclusive |
| public goods are not provided thru the market sys bc of the problem of who would pay for them | true |
| public good features | 1. nonrival 2. nonexclusive |
| the gov provides public goods and funds them thru enforced taxation. | true |
| Some goods are nonrival but exclusive | true |
| Goods that a re nonrival but exclusive result from | monopolies |
| Some goods are rival but nonexclusive | true |
| goods that are rival in consumption but exclusion is costly | open-access goods |
| ex of open-access goods | fishing |
| private goods usually are provided by the private sector | true |
| natural monopolies are sometimes provided by the | government (ex: urban transit sys) |
| externalities | by-products of production and consumption |
| the private sector, operating on its own, produces too many negative externalities and too few positive externalities | true |
| by products of production or consumption that impose costs on third parties | negative externalities |
| by products of consumption/production that benefit third parties | positive externalities |
| Third parties are those who are neither the buyer nor the seller in a transaction | true |
| The problem w allocation income according to productivity is that some people are not very productive. | ex: indiv. born w mental/physical disabilities, age, poor health, little education, discrimination, bad luck, or demands of care giving.....etc |
| the middle income when incomes are ranked from lowest to highest | median income |
| the main reason household incomes differ is that the # of household members who are working differs | true |
| Age itself has an important effect on income | true |
| There is much income mobility among households | true |
| high income houses typically consist of | well-educated couples w both spouses employed |
| low income houses typically consist of | single mothers who are young, poorly educated, and not in the labor force |
| the ed gov determines the official poverty lvl and adjusts this benchmark over time to account for inflation | true |
| poverty is measured both in millions of people living below the official poverty lvl and in the % of the U.S. population below that lvl | true |
| a decline in the nation's total production that lasts at least six months | recession |
| The U.S official poverty lvl of income is many times greater than the average income for most of the world's population. | true |
| one way to measure poverty is based on | the martial status of the household |
| 3 trends of marital status | 1. female-headed families are more likely to be in poverty 2. poverty among children increase due to female-headed families 3. poverty rates trended down for all families btwn mid-1990s and rose in 2000s & increased during recession (2008-2009) |
| the government's first line of defense in fighting poverty is to promote job opportunities. | true |
| cash transfers for retirees, the unemployed, and others w a work history and a record of contributions to the program | social insurance |
| provides retirement income for those who have a work history and a record of making payments to the program | social security |
| another social insurance program, provides health insurance for short-term medical care, from age 65+, regardless of income | Medicare |
| government programs that provide money and in-kind assistance to poor ppl | income-assistance programs |
| programs that give money directly to recipients | cash transfer programs |
| non-cash forms of assistance | in-kind transfer programs |
| unlike social insurance programs, income-assistance programs do not require a work history or a record of contribution | true |
| 2 main cash transfer programs | 1. Temporary Assistance for Needy Families 2. Supplemental Security Income |
| In-kind Transfer programs | 1. medicaid |
| medicaid is the largest welfare program, costing more than all cash and other in-kind transfer programs combined | true |
| supplements wages of the working poor | earned-income tax credit |
| The biggest reform of the welfare sys came w the 1996 legislation that created | Temporary Assistance for Needy Families |
| the most important economic decision maker, consisting of all those who live together under one roof | household |
| a household's lvl of satisfaction, happiness, or sense of well-being | utility |
| a business unit or enterprise by a profit-seeking entrepreneur who combines resources to produce goods/services | firm |
| Development of large-sale production during the eighteenth century | Industrial Revolution |
| An entrepreneur by hiring specialists to make many sweaters rather than one, is able to reduce the transaction costs per sweater | yes |
| the cost of time and information required for exchange | transaction costs |
| the evolution of production | self-sufficient households to the cottage industry sys to the Industrial Rev. to a modern, large scale facility |
| cottage industry sys | specialized production occurred in the households |
| Industrial Rev. | handling most production under one factory roof |
| Technological developments, increased the productivity of each worker during Industrial Rev | true |
| Gains from international trade occur bc the opportunity cost of producing specific goods differs across countries | true |
| legal claim that guarantees an owner the right to use a resource or to charge for its use | private property rights |
| assigns property rights to original expressions of an author, artist, composer, or computer programmer | copyright |
| establishes property rights to unique commercial marks and symbols | trademark |
| ex of trademark | Nike Swoosh and McDonald's Golden Arches |
| laws that reduce anti competitive behavior and promote competition in markets where competition is desirable | antitrust laws |
| the fed gov use of taxing and public spending to influence the macroeconomy | fiscal policy |
| one firm that can serve the entire market at a lower per-unit cost than two or more firms can | natural monopoly |
| the Fed Reserve sys's attempt to control the money supply to influence the macroeconomic variables such as how much, how many ppl have jobs, and how fast the economy grows | monetary policy |
| Foreign economies can have a significant effect on the U.S. economy | true |
| Although much of the population worked on farms in 1850, there was specialization within the farm structure | true |
| throughout the years, households have become decreasingly self-sufficient | true |
| in the last half of the nineteenth century, many farmers gave up farming to move to cities bc | fewer farmers were needed |
| Which best illustrates the cottage industry sys? | A factory provides a household w cloth, which members use to produce shirts |
| Which of the following choices would maximize utility of a household? | A household repairs a leaky basement |
| there are four types of decision makers in the U.S. economy | households, firms, government, and the rest of the world |
| To decrease spending, which of these policies would the government enact | fiscal |
| an increase in the economy's average price lvl | inflation |
| What do firms accomplish tat self-sufficient households cannot? | Firms are able to reduce transaction costs for each good |
| Most business ppl would prefer to be monopolists | true |
| the gov tests firms' measurement standards to ensure the consumer is getting what he/she paid for | true |
| public utilities are government-owned and government-regulated monopolies | true |
| only the fed gov can influence fiscal policy | false; gov at all levels can affect fiscal policy |
| the gov may protect both private and intellectual (copyrights, trademarks) properties | true |
| the gov safeguards private property thru | legal rights of ownership |
| To combat rising inflation, gov could | increase taxes and reduce its spending |
| Which of the following regulates the safety of over-the-counter drugs? | the U.S. Food and Drug Admin |
| Which regulates monetary policy? | the Fed Reserve sys |
| To decrease spending, which of these policies would the gov enact? | fiscal |
| Which of these reflects the rise and fall of economic activity relative to the long-term growth trend of the economy? | economic fluctuations |
| the gov usually regulates open-access goods | true |
| the quality and quantity of an open-access goods deteriorate over time | true |
| medicaid funds medical care for those w incomes below a certain lvl who are elderly, blind, disabled, or are living in families w dependent children | true |
| Welfare is an example of a social insurance program | false |
| 2 parent families use welfare less often than single-parent | true; welfare for ppl who need it |
| fewer than 6 mil ppl lived below the poverty line in 2013 | false |
| earned-income tax credit benefits the wealthiest 10 percent of the country | false; helps poor |
| the qualifying lvl of income to be accepted by Medicaid varies by state | true |
| Supplemental Security Income may help support ppl addicted to drugs | true |
| Families are allowed to receive welfare benefits for more than one yr | true |
| Some states allow all welfare recipients to remain on welfare for more than 5 yrs | false |
| Which of the following would NOT receive social insurance benefit? | a single teenage mother w no employment history |
| At every age, ppl w more ____ earn more income on average than others | education |
| Which best defines a means-tested program? | a household's income and attests must fall below a certain lvl to qualify for benefits |
| What happens to the # of ppl living in poverty during a recession | the # increases |
| Which of the following is available to all but can be kept from nonpayers? | natural monopoly goods |
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