Economy- Chapter 3

What best describes the role of government in a free enterprise system?

Control business activities.
Decide what companies will be formed and then allow the managers to run them.
Allow individuals to operate their businesses in ways they think will maximize their profits.
Require companies to disclose information to consumers.

Allow individuals to operate their businesses in ways they think will maximize their profits.

Select the term: Goods and services provided by the government for free or at greatly reduced prices

macroeconomics
free rider
poverty threshold
private sector
in-kind benefits

in-kind benefits

Which program provides enforcement of civil rights laws?

Consumer Product Safety Commission
Unemployment Insurance
Temporary Assistance for Needy Families
Equal Employment Opportunity Commission

Equal Employment Opportunity Commission

Which is a critical rule for determining whether something is a public good?

The benefit to each individual who uses the facility is greater than the cost.
The benefits of the facility are greater for the society than for the individuals using it.
The total benefits to society are greater than the total cost.
The total cost is small for each individual taxpayer.

The total benefits to society are greater than the total cost.

Which is a private organization that attempts to influence public officials to act or vote in ways that will benefit the group’s members?

market research group
free enterprise group
public policy group
interest group

interest group

Select the term: Government aid to the poor

market failure
business cycle
public policy
externality
welfare

welfare

Select the term: The study of the behavior and decision making of entire economies

macroeconomics
free rider
poverty threshold
private sector
in-kind benefits

macroeconomics

Select the term: The part of the economy that involves the transactions of individuals and businesses

macroeconomics
free rider
poverty threshold
private sector
in-kind benefits

private sector

Select the term: Laws and standards on topics of public interest

market failure
business cycle
public policy
externality
welfare

public policy

Select the term: An income level below that which is needed to support families or households

macroeconomics
free rider
poverty threshold
private sector
in-kind benefits

poverty threshold

What is a positive externality?

a way to generate trade that will benefit people who are from other countries
an economic side effect that generates additional benefits
a cash flow that will benefit both the government and the businesses who interact with it
an extra payment to welfare recipients

an economic side effect that generates additional benefits

Which is not an example of a public good?

shopping malls
national parks
highways
municipal libraries

shopping malls

Select the term: A period of macroeconomic expansion followed by a period of contraction

market failure
business cycle
public policy
externality
welfare

business cycle

Select the term : An economic side effect of a good or service that generates benefits or costs to someone other than the person deciding how much to produce or consume

market failure
business cycle
public policy
externality
welfare

externality

What is the difference between a business cycle compared to day-to-day market fluctuations?

The day-to-day ups and downs of the market can be much more extreme than a business cycle.
The day-to-day fluctuations are more likely to have an impact on people’s finances.
A business cycle is usually more restricted, whereas market fluctuations are worldwide.
A business cycle is a major, prolonged fluctuation rather than a day-to-day movement.

A business cycle is a major, prolonged fluctuation rather than a day-to-day movement.

Select the term: Someone who would not choose to pay for a certain good or service, but who would get the benefits of it anyway if it were provided as a public good.

macroeconomics
free rider
poverty threshold
private sector
in-kind benefits

free rider

What effect does new technology usually have on an economy?

It makes the economy stronger and more efficient.
It reduces the dependence of the economy on business.
It slows an economy down for at least a while.
It reduces the available jobs.

It makes the economy stronger and more efficient.

Why does the government use its powers to make sure that businesses disclose so much information to the public?

to make buyers more knowledgeable and safer
to make it hard for businesses to make an excess profit
to make it easier for consumers to save money
to make it easy for businesses to have good information

to make buyers more knowledgeable and safer

Select the term: A situation in which goods are not fairly distributed

market failure
business cycle
public policy
externality
welfare

market failure

What does the Temporary Assistance for Needy Families (TANF) program provide?

retirement income for the elderly
cash to the states to help run their welfare programs
compensation to all who lose jobs
cash to workers injured on the job

cash to the states to help run their welfare programs

How do consumers most effectively make their desires known to businesses?

through buying products
by protesting and boycotting products
through mail and phone surveys
by hiring lobbyists and joining consumer groups

through buying products

A person who consumes a good or service but does not pay for it is called ____________ .

a free rider
a volunteer user
a private consumer
an entrepreneur

a free rider

What protections does OSHA give to people in the United States?

regulations on workplace safety and information about hazards in the workplace
consumer protection in buying foods
regulations about clean environment
protection for certain key industries such as logging

regulations on workplace safety and information about hazards in the workplace

What is one benefit provided by Social Security?

medical care for the indigent
cash transfers to workers injured on the job
compensation for all who lose jobs
retirement income for the elderly

retirement income for the elderly

Which program helps support people who have retired?

Equal Employment Opportunity Commission
Social Security
Consumer Product Safety Commission
Environmental Protection Agency

Social Security