AP ECONOMICS CHAPTER 5 QUIZ

1. The functional dit!i"ution of inco#e !efe! to the$

A. di%iion of inco#e "et&een 'e!onal ta(e) conu#'tion e('enditu!e) and a%in*.
+. di%iion of inco#e on the "ai of indut!, ou!ce) fo! e(a#'le) a*!icultu!e) t!an'o!tation) #inin*) etc.
C. dit!i"ution of inco#e to "aic !eou!ce clae) that i) &a*e) !ent) inte!et) and '!ofit.
-. &a, inco#e i dit!i"uted a#on* 'ecific houehold o! 'endin* unit.
.. /ited in decendin* o!de! of !elati%e i0e) houehold di%ide thei! total inco#e a#on*$
A. conu#'tion e('enditu!e) a%in*) and ta(e.
+. a%in*) conu#'tion e('enditu!e) and ta(e.
C. conu#'tion e('enditu!e) ta(e) and a%in*.
-. ta(e) conu#'tion e('enditu!e) and a%in*.
1. /ited in decendin* o!de! of !elati%e i0e) total conu#'tion 'endin* i co#'!ied of$
A. nondu!a"le *ood) du!a"le *ood) and e!%ice.
+. e!%ice) nondu!a"le *ood) and du!a"le *ood.
C. e!%ice) du!a"le *ood) and nondu!a"le *ood.
-. du!a"le *ood) nondu!a"le *ood) and e!%ice
2. E"ene0e! li3e to deco!ate the e(te!io! of hi houe fo! the Ch!it#a holida,. If hi nei*h"o! en4o, the di'la, then it ha
c!eated$
A. a ne*ati%e e(te!nalit,) and *o%e!n#ent hould !e'ond ", u"idi0in* holida, di'la,.
+. a ne*ati%e e(te!nalit,) and *o%e!n#ent hould !e'ond ", ta(in* holida, di'la,.
C. a 'oiti%e e(te!nalit,) and *o%e!n#ent hould !e'ond ", u"idi0in* holida, di'la,.
-. a 'oiti%e e(te!nalit, and *o%e!n#ent hould !e'ond ", ta(in* holida, di'la,.
5. Unli3e a '!i%ate *ood) a 'u"lic *ood$
A. '!oduce no e(te!nal "enefit o! e(te!nal cot.
+. ha no o''o!tunit, cot.
C. ha "enefit that a!e a%aila"le to all) !e*a!dle of 'a,#ent.
-. i cha!acte!i0ed ", !i%al!, and e(cluda"ilit,.
5. A 6uai7'u"lic *ood i$
A. a 'u"lic *ood that i '!oduced '!ofita"l, ", '!i%ate fi!#) &ithout *o%e!n#ent u"id,.
+. one cha!acte!i0ed ", non!i%al!, and none(cluda"ilit,.
C. one cha!acte!i0ed ", !i%al!, "ut not e(cluda"ilit,.
-. a *ood fo! &hich e(cluion could ta3e 'lace "ut that ha uch la!*e 'illo%e! "enefit that *o%e!n#ent '!o%ide it to '!e%ent an
unde!allocation of !eou!ce.
8. An e(a#'le of a 6uai7'u"lic *ood i$
A. 'u"lic hi*he! education.
+. an auto#o"ile.
C. a -9- 'la,e!.
-. national defene.
:. ;hich lit '!o%ide) in o!de!) e(a#'le of a '!i%ate *ood) a 'u"lic *ood) and a 6uai7'u"lic *ood<
A. a &eathe! &a!nin* ,te#) a -9- 'la,e!) hi*he! education.
+. hi*he! education) a -9- 'la,e!) a &eathe! &a!nin* ,te#.
C. a &eathe! &a!nin* ,te#) hi*he! education) a -9- 'la,e!.
-. a -9- 'la,e!) a &eathe! &a!nin* ,te#) hi*he! education.
=. >o%e!n#ent? econo#ic !ole i co#'licated ", the fact that$
A. 'u"lic *ood entail no o''o!tunit, cot.
+. the 'u"lic ecto! cannot "ae deciion on #a!*inal cot and #a!*inal "enefit.
C. econo#ic deciion a!e #ade in a 'olitical conte(t.
-. the #a!*inal utilit, of 'u"lic *ood !ie !athe! than fall.
1@. ;hich of the follo&in* i an e(a#'le of a 'u"lic *ood<
A. a fi!e&o!3 di'la,
+. a hotdo*
C. a "a!"e6ue *!ill
-. a 'e!onal co#'ute!
11. An e(a#'le of a 'u"lic *ood i$
A. a #o%ie theate!.
+. a f!ei*ht t!ain.
C. the &a! on te!!o!i#.
-. -ine,land.
1.. The f!ee7!ide! '!o"le# i that$
A. f!ee 'u"lic t!an'o!tation i o%e!c!o&ded.
+. 'eo'le &ill not %olunta!il, 'a, fo! o#ethin* that the, can o"tain &ithout 'a,in*.
C. *o%e!n#ent u''lie *ood at no cha!*e to 'eo'le &ho can affo!d to 'a, fo! the#.
-. 'u"lic *ood often c!eate la!*e e(te!nal cot.
11. If the a**!e*ate inco#e of houehold i A1@@ "illion) conu#'tion i A.1@ "illion) and 'e!onal ta(e a!e A5@ "illion) then
'e!onal a%in*$
A. i A8@ "illion.
+. i A1@ "illion.
C. i A2@ "illion.
-. cannot "e dete!#ined f!o# the info!#ation *i%en.
12. Econo#it define du!a"le *ood a thoe '!oduct e('ected to lat at leat BBBBB ,ea!CD.
A. 1
+. 1
C. 5
-. 1@
15. /i#ited lia"ilit, a''lie to$
A. 'a!tne!hi'.
+. '!o'!ieto!hi'.
C. all co!'o!ation.
-. financial co!'o!ation "ut not to #anufactu!in* co!'o!ation.
15. /i#ited lia"ilit, #ean that$
A. c!edito! ha%e no le*al clai# on the 'e!onal aet of a '!o'!ieto!.
+. co!'o!ation cannot "e ued.
C. c!edito! ha%e no le*al clai# on the 'e!onal aet of a co!'o!ate toc3holde!.
-. co!'o!ation ha%e a le*al life inde'endent of thei! o&ne! and #ana*e!.
18. The Pu!e Eood and -!u* Act i an illut!ation of$
A. *o%e!n#ental '!o%iion of 'u"lic *ood.
+. the !edit!i"utional function of *o%e!n#ent.
C. *o%e!n#ental '!o%iion of a uita"le le*al f!a#e&o!3 fo! the #a!3et ,te#.
-. *o%e!n#ental action dei*ned to enhance co#'etition.
1:. >o%e!n#ent #a, leen inco#e ine6ualit, ",$
A. '!o%idin* t!anfe! 'a,#ent to the 'oo!.
+. di!ectl, #odif,in* #a!3et '!ice a) fo! e(a#'le) ", eta"lihin* a le*al #ini#u# &a*e.
C. uin* the ta( ,te# to ta( the &ealth, !elati%el, #o!e hea%il, than the 'oo!.
-. doin* All of thee.
1=. ;elfa!e chec3 and food ta#' a!e e(a#'le of BBBBBBBBBBBBB ued ", the *o%e!n#ent to !edit!i"ute inco#e.
A. t!anfe! 'a,#ent.
+. #a!3et inte!%ention.
C. ta(ation.
-. co!'o!ate u"idie.
.@. In a co#'etiti%e #a!3et$
A. de#and &ill not al&a, !eflect all e(te!nal "enefit.
+. de#and &ill al&a, !eflect all e(te!nal "enefit.
C. u''l, &ill al&a, !eflect all e(te!nal cot.
-. u''l, &ill al&a, !eflect all e(te!nal "enefit.
.1. Ne*ati%e e(te!nalitie a!ie$
A. &hen fi!# 'a, #o!e than the o''o!tunit, cot of !eou!ce.
+. &hen the de#and cu!%e fo! a '!oduct i located too fa! to the left.
C. &hen fi!# FueF !eou!ce &ithout "ein* co#'elled to 'a, fo! thei! full cot.
-. onl, in ca'italitic ocietie.
... Poiti%e e(te!nalitie !efe! to$
A. "enefit that acc!ue to 'a!tie othe! than the '!oduce! and "u,e! of a *ood.
+. the "enefit that !eou!ce u''lie! o"tain f!o# the '!oduction and ale of a *ood.
C. the "enefit that a conu#e! !ecei%e f!o# "u,in* a *ood.
-. the co#"ined "enefit that "u,e! and elle! !ecei%e f!o# a %olunta!, #a!3et t!anaction.
.1. An e(te!nal cot o! e(te!nal "enefit i alo 3no&n a aCnD$
A. #a!*inal "enefit.
+. '!inci'al7a*ent '!o"le#.
C. t!anfe! 'a,#ent.
-. 'illo%e!.
.2. E(te!nalitie$
A. !elate to cot onl,.
+. !elate to "enefit onl,.
C. !elate to "oth cot and "enefit.
-. ha%e "een le*ilated out of e(itence.
.5. ;hen the '!oduction o! conu#'tion of a *ood in%ol%e an e(te!nalit,$
A. !eou!ce a!e necea!il, o%e!allocated to the '!oduct.
+. !eou!ce a!e necea!il, unde!allocated to the '!oduct.
C. o#eone not in%ol%ed in "u,in* o! ellin* the *ood i affected.
-. the #a!3et &ill efficientl, allocate !eou!ce to it '!oduction.
.5. If the '!oduction of a *ood o! e!%ice c!eate i0a"le 'oiti%e e(te!nalitie) *o%e!n#ent #i*ht co!!ect fo! the$
A. unde!allocation of !eou!ce to it '!oduction ", i#'oin* an e(cie ta(.
+. o%e!allocation of !eou!ce to it '!oduction ", i#'oin* an e(cie ta(.
C. unde!allocation of !eou!ce to it '!oduction ", *!antin* a u"id,.
-. o%e!allocation of !eou!ce to it '!oduction ", *!antin* a u"id,.
.8. Eo! &hich of the follo&in* *ood o! e!%ice &ould a *o%e!n#ent u"id, "e #ot li3el, to i#'!o%e the allocation of
!eou!ce<
A. &heat
+. cance! !eea!ch
C. ne&'a'e! 'u"lihin*
-. to,
.:. Pollution$
A. hould "e co!!ected ", the u"idi0ation of offendin* fi!#.
+. i not an econo#ic '!o"le# "ecaue it i e(te!nal to the #a!3et ,te#.
C. i an e(a#'le of '!i%ate '!oduction cot.
-. i an e(a#'le of an e(te!nal cot.
.=. ;hich of the follo&in* i #ot li3el, to "e acco#'anied ", e(te!nal "enefit<
A. the cont!uction of a nuclea! 'o&e! 'lant
+. tud,in* in the li"!a!,
C. eatin* dinne! at an e('eni%e E!ench !etau!ant
-. "ein* i##uni0ed fo! #eale
1@. Suie li%e in a do!# and li3e to 'la, loud #uic in he! !oo#. He! nei*h"o! Ga!a en4o, the a#e t,'e of #uic and *et
'leau!e f!o# Suie tu!nin* u' the #uic. He! othe! nei*h"o!) Ale() can?t tand Suie? #uic and *et #ad &hen he tu!n it u'
fo! all to hea!. ;hen Suie 'la, he! #uic loudl,) he c!eate$
A. a 'oiti%e e(te!nalit, fo! Ga!a) and a ne*ati%e e(te!nalit, fo! Ale(.
+. a ne*ati%e e(te!nalit, fo! Ga!a) and a 'oiti%e e(te!nalit, fo! Ale(.
C. 'oiti%e e(te!nalitie fo! "oth Ga!a and Ale(.
-. ne*ati%e e(te!nalitie fo! "oth Ga!a and Ale(.
Ge,
1. C
.. C
1. +
2. C
5. C
5. -
8. A
:. -
=. C
1@. A
11. C
1.. +
11. +
12. +
15. C
15. C
18. C
1:. -
1=. A
.@. A
.1. C
... A
.1. -
.2. C
.5. C
.5. C
.8. +
.:. -
.=. -
1@. A