1. In 2015, the total income of all U.S. residents was about
a.
$10 billion.
b.
$16 billion.
c.
$10 trillion.
d.
$16 trillion.
2. Most of the total income earned in the U.S. economy is ultimately paid to
a.
b.
c.
d.
3. Most of the total income earned in the U.S. economy is ultimately paid to
a.
landowners in the form of rent.
b.
owners of capital in the form of interest.
c.
households in the form of wages and fringe benefits.
d.
households in the form of welfare, disability, and Social Security payments.
4. Of the total income earned in the U.S. economy, approximately
a.
33 percent is earned by workers, and 67 percent is earned by landowners.
b.
50 percent is earned by workers, 25 percent is earned by landowners, and 25 percent is earned by owners of
capital.
c.
67 percent is earned by workers, and 33 percent is earned by owners of land and capital.
d.
90 percent is earned by workers, and 10 percent is earned by owners of land and capital.
5. Approximately how much of the income in the United States is earned by workers in the form of wages and fringe
benefits?
a.
25 percent
b.
50 percent
c.
67 percent
d.
90 percent
6. Because workers in the U.S. economy receive most of the total income earned, which of the following factors of
production is considered to be the most important?
a.
profit
b.
wages
c.
interest
d.
labor
7. Total income in the United States is comprised of
a.
wages only.
b.
wages and fringe benefits only.
c.
rents, profits, and interest payments only.
d.
wages, fringe benefits, rents, profits, and interest payments.
8. The inputs used to produce goods and services are called
a.
profit factors.
b.
marginal products.
c.
labor demands.
d.
factors of production.
9. Which of the following is an example of a factor of production?
a.
rent
b.
interest
c.
land
d.
Social Security payments
10. Which of the following is not an example of a factor of production?
a.
labor
b.
interest
c.
land
d.
capital
11. The factors of production are best defined as the
a.
output produced from raw materials.
b.
inputs used to produce goods and services.
c.
wages paid to the workforce.
d.
goods and services sold in the market.
12. Suppose that a college professor is creating an exam in her university office. Which of the following would be an
example of a factor of production used by the professor?
(i)
the professor’s time
(ii)
a computer software program into which the professor types the exam questions
(iii)
the physical space of the professors office where she works when creating the exam
(iv)
the interest on the professor’s home mortgage
a.
(i) only
b.
(i) and (ii) only
c.
(i), (ii), and (iii) only
d.
(i), (ii), (iii), and (iv)
13. Suppose that Chloe opens a dog grooming business in a local shopping center. Which of the following would be an
example of a factor of production used by Chloe?
(i)
her employees’ time
(ii)
brushes, combs, scissors, and clippers
(iii)
shampoo, water, and flea prevention treatments
(iv)
Chloe’s time spent on bookkeeping and bill paying
a.
(i) only
b.
(i) and (ii) only
c.
(i), (ii), and (iii) only
d.
(i), (ii), (iii), and (iv)
14. Capital, labor, and land
a.
have derived demands.
b.
are factors of production.
c.
are inputs used in the production of goods and services.
d.
All of the above are correct.
15. Which of the following is an example of a firm’s derived demand?
a.
The wage that a worker earns is a function of her human capital.
b.
A firm’s demand for college textbook study guide authors is inseparably linked to the supply of college
textbooks.
c.
Factors that increase the demand for labor will increase the equilibrium wage.
d.
All of the above are correct.
16. Which of the following is an example of a firm’s derived demand?
a.
Workers with higher levels of education earn more, on average, than workers with lower levels of education.
b.
Factors that decrease the demand for labor will decrease the equilibrium wage.
c.
A tractor manufacturer’s demand for assembly-line workers is inseparably linked to the supply of tractors.
d.
All of the above are correct.