Chapter 10: The Role of Government in Our Economy
Chapter Practice Review Quiz
1.. What are the three levels of government in the C) when someone fails to live up to the terms of a United States? contract
A) federal, interstate, and local D) the enforcement of a contract by legal means
B) federal, regional, and state
6. Which gives you a legal right to own a song C) federal, state, and local
that you have written? D) federal, regional, and local
2. To what does the term intrastate commerce B) trademark
refer? C) patent
A) business that takes place between states D) contract
B) business that takes place within a state
7. For how long are you protected from someone C) government in counties and cities
copying your patented invention without asking D) state government
for your permission?
3. What is the biggest difference between a A) 2 years
monopoly and an oligopoly? B) 20 years
A) Consumers prefer monopolies because they C) 70 years
mean lower prices than oligopolies. D) forever
B) A monopoly limits choices for consumers; an
oligopoly expands choice. 8. How is a trademark different from a copyright
or a patent? C) There is no competition with an oligopoly as
there is with a monopoly. A) A trademark is protected by the government. D) An oligopoly is formed by a small number of B) A trademark protects the right to own and companies rather than just one. benefit from something.
C) A trademark can only be legally used by the 4. Which is NOT true of a monopoly? owner unless the owner grants permission. A) A trust is a group of companies that band D) A trademark is strongly associated with and together to form a monopoly and cut out identifies a product or a company. competition.
9. What does the FDA do? B) Antitrust laws allow the federal government to
break up a monopoly. A) It regulates the production process. C) A monoploy can lead to high prices because of B) It limits the amount of waste factories put out. a lack of competition. C) It regulates the production and sale of drugs. D) The government can not stop or regulate a D) It protects workers in the U.S. monopoly once it is has been formed.
10. Which is NOT an aspect of the government's 5. What is breach of contract? role in society?
A) when parties agree to the terms of a written A) providing key services
contract B) offering incentives to businesses and people B) the protection a contract provides to those who C) promoting social welfare
sign it D) making a profit on goods and services offered
11. Which is an example of a public good? A) a highway
C) laws regulating water treatment
D) the governor of a state
12. Which is NOT a way the government gets revenue?
B) transfer payments
D) money from government businesses
13. Which is NOT true of the U.S. government? A) It is the biggest employer.
B) It is the largest consumer.
C) It sometimes hires private businesses to work for it.
D) It does not encourage the development of small businesses.
14. Which is an example of something the local government pays for?
A) local streets
B) state police
C) federal highways
15. Which is the temporary elimination of a tax in order to encourage an activity?
B) tax revenue
C) tax incentive
Government provides services to the public Answer Keys:
as a whole for the good of society. 1. C
Feedback: Government in the United States 11. A
includes three levels: federal, state, and local. Feedback: A highway is a public good that
anyone can use. Public workers include 2. B
Feedback: Intrastate commerce refers to police and fire fighters, teachers, and business that takes place within the borders government officials. Public services include of one state. water and sewer treatment and setting safety
standards. 3. D
Feedback: The only practical difference 12. B
between a monopoly and a oligopoly is that Feedback: A transfer payment is provided by an oligopoly is formed by a small number of the government to its people to help them. companies rather than one, thus there may be Examples are veterans' or unemployment a small degree of competition. benefits.
4. D 13. D
Feedback: The government uses antitrust Feedback: The U.S. government encourages laws promote healthy competition in the the development of small businesses by economy and stop or regulate monopolies. offering them subsidies.
5. C 14. A
Feedback: When someone fails to live up to Feedback: The local government pays for the the terms of a contract, they have committed building of and upkeep of local streets. a breach of contract. 15. C
Feedback: The government offers tax 6. A
Feedback: According to the law, a person incentives to encourage or discourage certain creating an original work automatically holds activities.
the copyright to it. If you own a copyright,
others must get your permission from you
before using your work.
Feedback: A patent is a legal grant for the
sole right to own an invention granted by the
federal government for 20 years.
Feedback: A trademark often identifies a
product or a company name. The little symbol
after the name is an abbreviated symbol
meaning "registered trademark."
Feedback: The FDA, or Food and Drug
Administration, regulates the production and
sale of drugs in the U.S.
Feedback: Businesses offer goods and
services to people to make a profit.