Homework Economics Help FOr Aplia Chapter 4 Private And Public Sectors 2?

Question

1. The table below shows the functional distribution of an economy.


Category Percentage of Total Income

Wages and salaries 65%
Proprietors' income 12%
Corporate profits 9%
Interest 8%
Rents 6%


Which of the following can we tell from the table?



A. The bulk of the economy's income goes to pay for labor.

B. Proprietors' income makes up a substantial percentage of total income.

C. Personal income is equally distributed.

D. Personal income is unequally distributed.

2. The United States is often referred to as a service-oriented economy because _____________________.



A. A majority of consumer expenditures goes to paying for nondurable goods, such as food and clothing

B. A majority of consumer expenditures goes to paying for services

C. The government provides equal and unbiased income redistribution services to both the rich and the poor

D. The government provides services, such as the postal service and national defense

Jeremiah raises bullfrogs to be sold in pet stores. As it turns out, this is an extremely lucrative business. Unfortunately, Jeremiah's previous attempts at entrepreneurship landed him in tens of thousands of dollars of debt. He needs to raise some money in order to buy a bigger aquarium for the frogs, so Jeremiah suggests to a friend of his that they become business partners. His friend, however, is wary of getting himself into a situation in which he might be responsible for Jeremiah's debts. What can Jeremiah do to alleviate this fear?



A. Admit that his friend is probably better off not going into business with him and give up

B. Offer his friend a higher stake in the business

C. Suggest that they form a corporation

4. Which of the following choices characterizes a corporation?



A. Ownership of a corporation resides with one person who is responsible for all debts incurred by the business.

B. A corporation has multiple owners, each with unlimited liability.

C. The liability of the corporate stockholders is limited to the value of the stock they own.

5. Suppose you're selling a home. You have hired Sam, a real estate agent, to help you get the best possible price. As compensation, Sam will receive 3% of the selling price. He believes that the most the house will sell for is $250,000. Think for a minute about the incentives your real estate agent faces. Sam can sell the house in a few days by putting it on the market at $240,000, or he can advertise it for $260,000 and, after negotiating with prospective buyers, sell it for $250,000. The process of negotiation will take a couple of weeks.

If Sam is patient and persistent, you gain substantially--an additional $10,000. Yet, Sam's gain from persisting is relatively small. At his 3% commission, Sam gets $7,200 for selling at $240,000 and $7,500 for selling at $250,000. He only gets an extra $300 for the additional effort required to attract the most suitable buyer. That's a fairly weak incentive, considering he could have moved on to the next $7,200 commission had he not been focusing time and energy into selling your home.

In this case, your incentives and those of your realtor are not perfectly aligned. This is an example of the:



A. Residual claimant

B. Proprietorship

C. Explicit cost

D. Principal-agent problem

Answer 1

A) The Bulk of the economy goes to pay for Labor.



B) A majority of consumer based expenditures go toward paying for services (Think house cleaning, car wash, auto mechanic, Real Estate Brokers, Stock Brokers, golf courses..)



C) Form a corporation... (LLC Limited Liability Corporation)because.....



C) The liability of stockholders is limited to the value of stock they own.



C) Principal-Agent Problem



By the Way that last question was taken word for word from the book Freakonomics. Just an FYI if you want to impress your teacher.

Answer 2

They don't. That article talks about averages not specifics. If you want to compare a private sector janitor with public sector janitor I'd say you are probably right. The public sector janitor would make more. But now if want to compare a private sector engineer to a public sector engineer you would be way off the mark. The government engineer makes no where near what a private sector engineer makes. and I think you'd find this true for all highly educated, highly trained professions. Now do most public sector jobs offer better benefits? Yes. That is the only drawing card the public sector can offer to get qualified people since they can not come close to competing on straight salaries alone.

Answer 3

you guys are so smart i bet these stump you!!!!!!



6.1. The government, and not a private firm in the market system, levies a tax on consumers and businesses for its provision of a public good, such as national defense.







A. Redistributing income



B. Maintaining competition



C. Promoting stability



D. Reallocating resources









6.2. Families with an annual income under $20,000 receive monthly transfer payments from the government.







A. Maintaining competition



B. Reallocating resources



C. Redistributing income



D. Promoting stability









6.3. The government decides that it would cut taxes in an attempt to lead the economy out of a serious recession.







A. Maintaining competition



B. Redistributing income



C. Reallocating resources



D. Promoting stability





Which one of the following situations represents a case of a positive externality?







A. A paid tutor instructing Antonio in economics as fellow classmate Cathy listens in without anybody knowing it



B. Using a leaf blower on your yard early on a Sunday morning



C. A rock concert held next to the library during final exam week



D. One person smoking cigars among several nonsmokers in a closed room







Goods are rival if:







A. It is possible to prevent an individual from using the good



B. The quantity of the good is affected by the price a consumer pays for the good



C. It is NOT possible to prevent an individual from using the good



D. Consumption of a good by one person decreases consumption by another person







Which of the following is an example of a public good?







A. Cable television



B. A soda from a vending machine in a government building



C. A streetlight



D. A movie playing at a theater







Consider the economic activity surrounding the War on Terror in the context of a circular flow diagram that includes both the public sector (government) and private sector (firms and households). Which of the following is an example of the government interacting directly with the product market as part of the war effort?







A. The government raises income taxes to help pay for the War on Terror.



B. The government pays wages to soldiers to fight in the Middle East.



C. The government funds security measures for ports, both in the United States and abroad, to help ensure that firms can safely import and export goods during a period of global instability.



D. The government contracts with civilian companies, like Federal Express, to help airlift supplies to the Middle East.







In 2006, payroll taxes amounted to 15.3% of wages up to $94,200, and 2.9% on all additional earnings.



For example, if someone earned $100,000, the total amount paid in payroll taxes would be 15.30% of $94,200 plus 2.90% of $5,800, for a total of about $14,580.



(Note that this would be split evenly between the worker and the employer--that is, the worker's $100,000 income would be reduced by only $7,290.)



11.1. Susan earns $50,000 per year. How much do she and her employer combined pay in payroll taxes, as a fraction of her income?







A. 3.90%



B. 12.40%



C. 15.30%



D. 19.10%





In 2006, payroll taxes amounted to 15.3% of wages up to $94,200, and 2.9% on all additional earnings.



For example, if someone earned $100,000, the total amount paid in payroll taxes would be 15.30% of $94,200 plus 2.90% of $5,800, for a total of about $14,580.



(Note that this would be split evenly between the worker and the employer--that is, the worker's $100,000 income would be reduced by only $7,290.)



11.2. Joyce earns $100,000 per year. How much do she and her employer combined pay in payroll taxes, as a fraction of her income?







A. 16.24%



B. 14.58%



C. 15.30%



D. 12.40%



In 2006, payroll taxes amounted to 15.3% of wages up to $94,200, and 2.9% on all additional earnings.



For example, if someone earned $100,000, the total amount paid in payroll taxes would be 15.30% of $94,200 plus 2.90% of $5,800, for a total of about $14,580.



(Note that this would be split evenly between the worker and the employer--that is, the worker's $100,000 income would be reduced by only $7,290.)



11.3. This tax is:







A. Progressive



B. Regressive



C. Proportional (neither progressive nor regressive)







In general, local governments raise most of their revenues through ______ and spend these revenues primarily on _________.







A. Property taxes; education



B. Corporate income taxes and excise fees; public safety



C. Personal income taxes; welfare, health and hospitals



D. Sales and excise taxes; road construction