1.The more inelastic the demand for a good, the more any excise tax placed on the good will fall on __________ of that good.

consumers

distributors

providers

producers

2.According to the American Lung Association, increasing excise taxes on cigarettes is a win-win proposition. Why does the group state this?

Cigarette companies will be more likely to go out of business.

More adults will save money if they quit smoking.

Smokers will be punished for polluting the air.

Taxes collected will support important health programs.

3.What does elasticity measure in economic terms?

the time it takes a product to reach the target market

the way one variable responds to changes in other variables

the difference between the supply curve and the demand curve

the length of the supply curve

4.What is the meaning ofutilityin the field of economics?

the satisfaction a person receives from consuming a good or service

the degree of demand for a certain good or service

whatever a consumer wants it to be when consuming a good or service

how functional a good or service is

5.Economists believe that the larger the amount individuals expect to save, the longer they will continue to search. This means that a person will search longer for a cheaper price on a __________ than for a cheaper price on a __________.

van; truck

candy bar; soft drink

mountain bike; house

wedding cake; pound of apples

6.In the early days of economic discourse, a popular topic was "What determines value?" Which of the following economists wrote that value meant either "value in use" or "value in exchange"?

Lon Walras

Carl Menger

Alfred Marshall

Adam Smith

7.What are price ceilings?

minimum limits on prices established by a governmental unit

final limits on prices established by a governmental unit

limits that occur when the prices on goods are increased for consumers

upper limits on prices imposed by a governmental unit

8.Many externalities result from the fact that __________.

tort law is often unenforceable

a contract is too complicated

efficiency is more important than equity

property rights are not clearly defined

9.Identify the best example of a pure public good.

a vending machine full of soda

a state park

a church playground

a parking lot

10.A negative externality exists when __________.

all costs are taken into account in the demand curve

all costs are taken into account in the supply curve

the market demand curve is not the true demand curve

the marginal social costs are not taken into account in the supply curve