Study your flashcards anywhere!

Download the official Cram app for free >

  • Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off

How to study your flashcards.

Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key

Up/Down arrow keys: Flip the card between the front and back.down keyup key

H key: Show hint (3rd side).h key

A key: Read text to speech.a key


Play button


Play button




Click to flip

16 Cards in this Set

  • Front
  • Back
The functional deistribution for the United States shows that the largest part of the nation's income is
a. wages and salaries
b. proprietors' income
c. corporate profits
d. interest and rents
The part of after-tax income which is not comsumed is defined as
a. saving
b. capital investment
c. wages and salaries
d. nondurable goods expenditure
If personal consumpton expenditures were 80% of income and personal taxes were 8% of income, then personal savings would be
a. 8% of income
b. 10% of income
c. 12% of income
d. 88% of income
Consumers products that have expected lives of three years or more are
a. durable goods
b. nondurable goods
c. quasi-public goods
d. services
A firm owns and operates a farm growing wheat, a flour-milling plant, and a plant that bakes and sells bakery products. This firm would best be described as
a. a horizontally integrated firm
b. a vertically integrated firm
c. a conglomerate
d. a monopoly
Limited liability is associated with
a. sole proprietorships
b. partnerships
c. free-riders
d. corporations
Which form of business can best effectively raise money captial
a. corporation
b. partnership
c. proprietorship
d. households
The separation of ownership and control in a corporation may create
a. a principal-agent problem
b. a free-rider problem
c. a monopoly
d. limited liability
One major means that government uses to deal with a monopoly is to
a. increase the demand for its product
b. decrease the supply of its product
c. stabilize incomes
d. regulate the firm
Government redistributes income through
a. limited liability
b. conglomerates
c. transfer payments
d. sole proprietorships
To redistribute income from high-income to low-income households, government might
a. increase transfer payments to high-income and decrease transfer payments to low-income households
b. increase the taxes paid by high-income and increase the transfer payments to low-income households.
c. increase the taxes paid by low-income and decrease the taxes paid by high-income households
d. decrease the taxes paid by high-income and decrease the transfer payments to low-income households
Which is the best example of a good or service providing the economy with a spillover cost
a. a textbook
b. and automobile
c. a business suit
d. and audit of a business firm's books
How does government correct for spillover benefits
a. by taxing consumers
b. by taxing producers
c. by subsidizing producers
d. by separating ownership from control
Quasi-public goods are goods and services
a. that are indivisible
b. that have large spillover costs
c. that have large splillover benefits
d. that would not be produced by private producers through the market system
Which pair represents the chief source of income and the most important type of expenditure of local governments
a. property tax and expenditures for highways
b. property tax and expenditures for education
c. sales and excise taxes and expenditures for public welfare
d. sales and excise taxes and expenditures for police, fire, safety, and general government
the marginal tax rate at the $70,000 level of taxable income is
a. 16.6%
b. 21.4
c. 25.0
d. 28.0