Multiple Choice Question
1. Who is most likely to value a new pickup truck?
a. A recent college graduate with a new child
b. A financially comfortable construction manager
c. A college student getting ready to move
d. A wealthy Fortune 500 executive
2. Which of the following is not an example of the government’s role in helping create wealth?
a. Assessing property taxes
b. Recording property transactions
c. Providing federal courts to adjudicate contract disputes
d. Assigning street addresses
3. When are parties likely to engage in transactions?
a. If they both gain from the transaction
b. If the sale price is above the seller’s value and below the buyer’s value
c. When the total gains from trade are greater than zero
d. All of the above
4. The existence of underemployed assets:
a. Is inefficient because not all assets are being put to their highest use.
b. Implies the potential for money-making opportunities.
c. Provides the opportunity for wealth-creating transactions.
d. All of the above
5. In a transaction for a good valued at $100,000 by a buyer and $95,000 by a seller, what amount of tax would result in an unconsummated transaction?
a. Any tax amount would result in an unconsummated transaction.
b. A tax of $1,500
c. A tax of $5,500
d. It depends on how much the parties are willing to pay (and accept) for the good.