Foundations of Macroeconomics, 7e (Bade/Parkin)
Chapter 2 The U.S. and Global Economies
2.1 What, How, and For Whom?
1) Items that are purchased by individuals for their own enjoyment are called
A) consumption goods and services.
B) capital goods.
C) government goods and services.
D) exports of goods and services.
E) private goods.
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
2) Items bought by individuals to provide personal enjoyment are termed
A) consumption goods.
B) personal goods.
C) consumption or investment goods.
D) standard goods.
E) pleasure goods.
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
3) What would be an example of a consumption good?
A) Antonio, the manager of the local Taco Hut, purchases a new deep fryer.
B) The local driver’s license oice purchases a new digital camera and printer.
C) Rhianna gets a haircut.
D) Jake buys an iPhone.
E) Donald Trump purchases furniture for his oice.
Skill: Level 2: Using deinitions
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
1
4) Which of the following is a consumption good or service?
A) a personal computer purchased in order to play games at home
B) a United Airline ticket counter
C) the Endeavor space shuttle
D) a United Parcel Service truck delivering Christmas gifts
E) a satellite dish installed by Cox Cable to download programs that are then distributed
through its cable system
Skill: Level 2: Using deinitions
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
5) What would be an example of a consumption service?
A) Rhianna gets a haircut.
B) Jake buys an iPhone.
C) Antonio, the manager of the local Taco Hut, purchases a new deep fryer.
D) The local driver’s license oice purchases a new digital camera and printer.
E) Donald Trump purchases furniture for his oice.
Skill: Level 2: Using deinitions
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
6) The largest share of total production in the United States is
A) consumption goods and services.
B) capital goods.
C) government goods and services.
D) exported goods and services.
E) imported goods and services.
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
2
7) Items bought by businesses to help produce other goods and services are called
A) consumption goods and services.
B) capital goods.
C) government goods and services.
D) exports of goods and services.
E) productive goods.
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
8) Which of the following is NOT a consumption good?
A) Nike swimming trunks
B) marriage counseling services
C) a UPS truck
D) a Subway sandwich
E) a U.S. government bond
Skill: Level 2: Using deinitions
Section: Checkpoint 2.1
Status: New
AACSB: Application of knowledge
9) An item that is purchased to increase businesses’ productive resources is
A) an export.
B) a government good.
C) a capital good.
D) a consumption good.
E) a productive good.
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
3
10) What would be an example of capital good?
A) Jeanette buys a new dress.
B) The local driver’s license oice purchases a new digital camera and printer.
C) Antonio, the manager of the local Taco Hut, purchases a new deep fryer.
D) Apple sells computers to Japan.
E) Rhianna gets a haircut.
Skill: Level 2: Using deinitions
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
11) The diference between consumption and capital goods is that
A) only big corporations can aford capital goods.
B) capital goods are used to produce additional goods while consumption goods are not.
C) capital goods are provided by the government.
D) consumption goods can be enjoyed by many people at the same time.
E) it is illegal to export capital goods.
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
12) Which of the following is NOT an example of a capital good?
A) a miner’s cap
B) a GPS tracking device
C) an airport kiosk
D) a U.S. government bond
E) a stethoscope
Skill: Level 2: Using deinitions
Section: Checkpoint 2.1
Status: New
AACSB: Application of knowledge
4
13) Goods and services bought by the government account for about ________ percent of
total production.
A) 2
B) 8
C) 17
D) 35
E) 67
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
14) What would be an example of a government good?
A) Jake buys an iPhone.
B) The local driver’s license oice purchases a new digital camera and printer.
C) Antonio, the manager of the local Taco Hut, purchases a new deep fryer.
D) Donald Trump purchases furniture for his oice.
E) Rhianna gets a haircut.
Skill: Level 2: Using deinitions
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
15) Goods produced in the United States and sold in other countries are called
A) exports.
B) imports.
C) foreign goods.
D) capital goods.
E) capital account goods.
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
5
16) An export good is a good produced
A) in the United States and sold to foreigners living in the United States.
B) by foreigners in the United States and purchased by U.S. households.
C) in another country and purchased by U.S. residents.
D) in the United States and sold in other countries.
E) in another country and purchased by foreigners not residing in the United States.
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
17) Computers and insurance coverage produced in the United States and sold to people in
other nations are categorized as
A) U.S. consumption goods and services.
B) foreign capital goods.
C) U.S. government goods and services.
D) U.S. exports of goods and services.
E) U.S. imports of goods and services.
Skill: Level 2: Using deinitions
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
18) The Colorado Ski Shop sold 60 ski jackets to a Belgian company’s headquarters located
in Paris, France. The ski jackets are a
A) U.S. export good.
B) capital good.
C) government good.
D) U.S. consumption service.
E) U.S. import.
Skill: Level 2: Using deinitions
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
6
19) Over the past 70 years, which of the following has occurred?
i. The service sector has grown so that now about 80 percent of workers are now
employed in the service industry.
ii. The manufacturing sector has shrunk, so now about 20 percent of workers are now
employed in the production of goods.
iii. The percentage of workers employed in the service industry has increased steadily.
A) i, ii and iii
B) i and iii
C) ii only
D) i only
E) ii and iii
Skill: Level 2: Using deinitions
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
20) Which of the following is NOT considered one of the factors of production?
A) land
B) labor
C) capital
D) technology
E) entrepreneurship
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
21) Which of the following correctly lists the categories of factors of production?
A) land, labor, capital, and entrepreneurship
B) land, buildings, capital, and entrepreneurship
C) labor, machines, buildings, capital, and entrepreneurship
D) forests, ish, buildings, capital, and entrepreneurship
E) labor, money, stocks, and bonds
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
7
22) Which of the following is NOT a factor of production?
A) money
B) capital
C) land
D) entrepreneurial ideas
E) labor
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: New
AACSB: Relective thinking
23) Goods and services are produced by using four factors of production:
A) land, labor, capital, and entrepreneurship.
B) land, labor, money, and equipment.
C) natural resources, human resources, inancial assets, and entrepreneurial resources.
D) labor, human capital, physical capital, and inancial capital.
E) land, labor, capital, and money.
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
24) Factors of production are the
A) goods that are bought by individuals and used to provide personal enjoyment.
B) goods that are bought by businesses to produce productive resources.
C) productive resources used to produce goods and services.
D) productive resources used by government to increase the productivity of consumption.
E) goods and services produced by the economy.
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
8
25) The productive resource that includes all the “gifts of nature” is called
A) land.
B) labor.
C) capital.
D) entrepreneurship.
E) land if undeveloped and capital if developed.
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
26) Economists classify energy and water as part of which factor of production?
A) land
B) labor
C) capital
D) entrepreneurship
E) land if undeveloped and capital if developed
Skill: Level 2: Using deinitions
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
27) As a factor of production, oil reserves are counted as
A) land.
B) labor.
C) capital.
D) entrepreneurship.
E) inancial capital.
Skill: Level 2: Using deinitions
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
9
28) Over time, the percentage of total employment in services has ________ and in
agriculture, employment has ________.
A) increased; increased
B) decreased; increased
C) stayed about the same; decreased
D) stayed about the same; increased
E) increased; decreased
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
29) Which of the following has been the largest contributor to increases in the quantity of
labor in the Unites States during the past 50 years?
A) The proportion of men taking paid jobs has increased.
B) The proportion of women taking paid jobs has increased.
C) The proportion of young adults entering college has decreased.
D) The proportion of seniors taking early retirement has decreased.
E) None of the above because the quantity of labor has actually decreased.
Skill: Level 2: Using deinitions
Section: Checkpoint 2.1
Status: New
AACSB: Relective thinking
30) The concept of human capital describes
A) human skills, that is, the quality of labor.
B) human population, that is, the quantity of labor.
C) the number of machines per employed worker.
D) the number of workers per operating machine.
E) the number of machines (capital) that have been produced by people (humans).
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
10