31) Which factor of production does human capital enhance?
i. land
ii. labor
iii. capital
A) i only
B) ii only
C) iii only
D) i and ii
E) i, ii, and iii
Skill: Level 2: Using deinitions
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
32) Human capital can be increased through
A) investment in new technology.
B) education, on-the-job training, and work experience.
C) investment in new machinery.
D) decreases in population.
E) increasing the nation’s production of consumption goods.
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
33) The United States possesses a large amount of human capital. As a result of this fact, in
the United States there is a
A) large amount of machinery and equipment.
B) large number of people and a great deal of land.
C) highly skilled and educated labor force.
D) large number of kind and generous humans.
E) large amount of machinery (capital) that is run by people (humans).
Skill: Level 2: Using deinitions
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
11
34) Jan is attending college and studying to be an investment broker. To improve her
chances of employment following college, she has interned at a top brokerage irm during
the last two summers. Jan’s internship has increased her
A) natural labor.
B) human capital.
C) consumption services.
D) natural resources.
E) entrepreneurship capital.
Skill: Level 4: Applying models
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
35) Which of the following is NOT directly related to human capital?
A) a college education
B) a summer internship
C) knowledge of computer programing
D) an MRI machine
E) an understanding of real estate markets
Skill: Level 2: Using deinitions
Section: Checkpoint 2.1
Status: New
AACSB: Application of knowledge
36) Human capital ________ as you work. As a result, the ________ of goods and services
________.
A) increases; quantity; increases.
B) declines; quality; increases.
C) improves; quality; does not change.
D) does not change; quality; does not change.
E) decreases; quantity; decreases.
Skill: Level 2: Using deinitions
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
12
37) Capital, as a factor of production, refers to
A) money, stocks, and bonds.
B) the production technology used by irms.
C) the tools and instruments used to produce other goods and services.
D) the production factors imported from abroad.
E) stocks and bonds, but not money.
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
38) The total value of capital in the United States is around
A) $50 trillion.
B) $10 trillion.
C) $79 trillion.
D) $100 trillion.
E) $145 trillion.
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
39) Capital is a factor of production. Which of the following is an example of capital?
i. $1,000 in money
ii. 100 shares of Microsoft stock
iii. $10,000 in bonds issued by General Motors
iv. a drill press in your local machine shop
A) i and ii
B) ii only
C) iii only
D) iv only
E) ii and iii
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
13
40) Capital is a factor of production. An example of capital as a factor of production is
A) money.
B) stocks.
C) bonds.
D) machines.
E) education.
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
41) One of the productive resources is capital. Capital includes
A) money borrowed from a bank.
B) a company’s stocks and bonds.
C) tools, buildings, and machine tools.
D) toys, t-shirts, CD players, and pencils.
E) money in a savings account at a bank.
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
42) A newspaper printing press is an example of
A) a capital good.
B) a factor of production.
C) something that inluences labor productivity.
D) a good that was once an output of the production process.
E) All of the above are correct.
Skill: Level 2: Using deinitions
Section: Checkpoint 2.1
Status: New
AACSB: Application of knowledge
14
43) Which of the following is NOT considered capital?
A) an assembly line at a General Motors plant
B) a computer used by your instructor for presentations in class
C) stocks and bonds that are sold by Pepsico
D) the furniture in the President’s oice
E) a nail gun used for building houses
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
44) Entrepreneurship, as a factor of production, refers to
A) the technology used by irms.
B) the human capital accumulated by workers.
C) the value of the irm’s stock.
D) the human resource that organizes labor, land, and capital.
E) the capital the irm uses.
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
45) The productive resource that organizes labor, land, and capital is
A) human capital.
B) inancial capital.
C) entrepreneurship.
D) government.
E) capital.
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
15
46) Payments to the factors of production are
A) rent, mortgage, interest, and bonds.
B) rent, interest, bonds, and proit or loss.
C) rent, wages, interest, and proit or loss.
D) rent, wages, proit or loss, and bonus.
E) land, labor, capital, and entrepreneurship.
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
47) ________ paid for the use of land; ________ paid for the services of labor; and ________
paid for the use of capital.
A) Rent is; wages are; interest is
B) Rent is; interest is; wages are
C) Interest is; wages are; proit is
D) Mortgages are; interest is; wages are
E) Rent is; wages are; proit is
Skill: Level 2: Using deinitions
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
48) The income paid for the use of land is called
A) rent.
B) wages.
C) interest.
D) proit.
E) land capital.
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
16
49) The income paid to labor is called
A) rent.
B) wages.
C) interest.
D) proit.
E) human capital.
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
50) Which factor of production is paid “interest”?
A) land
B) labor
C) capital
D) entrepreneurship
E) human capital
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
51) The owners of the resource ________ are paid ________.
A) land; wages
B) labor; proit
C) capital; rent
D) capital; interest
E) entrepreneurship; wages
Skill: Level 2: Using deinitions
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
17
52) Which factor of production is paid “proit”?
A) land
B) labor
C) capital
D) entrepreneurship
E) human capital
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
53) The functional distribution of income measures which of the following?
A) how federal tax revenues are related to the business function that employs taxpayers
B) the distribution of earnings by the factors of production
C) the proportion of income generated by the four types of expenditures on goods and
services
D) the distribution of income among households
E) the distribution of income among nations
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
54) In the United States, the productive factor that, as a group, receives the largest
fraction of the nation’s total income is
A) labor.
B) capital.
C) consumption goods and services.
D) entrepreneurship.
E) land.
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
18
55) According to the functional distribution of income, in the United States,
A) capital earns most of the income.
B) labor earns most of the income.
C) land earns most of the income.
D) entrepreneurs earn most of the income.
E) the income earned by capital and labor are approximately equal.
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
56) The data show that more than 60 percent of the total income earned in the United
States goes to
A) labor.
B) land.
C) capital.
D) entrepreneurship.
E) proit.
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
57) The majority of the income earned in the United States is paid in
A) rent.
B) wages.
C) interest.
D) proit.
E) dividends.
Skill: Level 2: Using deinitions
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
19
58) The personal distribution of income measures which of the following?
A) how federal tax revenues are related to the type of businesses that employs the
taxpayers
B) the distribution of earnings by the factors of production
C) proportion of income generated by the four types of expenditures on goods and services
D) the distribution of income among households
E) the distribution of income among nations
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
59) In the United States, the poorest 20 percent of households earn roughly ________
percent of total income.
A) 20
B) 10
C) 15
D) 3
E) 0.5
Skill: Level 1: Deinition
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
60) The personal distribution of income in the United States shows that
A) income is equally distributed.
B) the poorest 20 percent of individuals receive approximately 20 percent of total income.
C) the richest 20 percent of individuals receive approximately 50 percent of total income.
D) the poorest 60 percent of individuals receive approximately 50 percent of total income.
E) the richest 20 percent of individuals receive approximately 25 percent of total income.
Skill: Level 3: Using models
Section: Checkpoint 2.1
Status: Old
AACSB: Relective thinking
20