2022 State FBM

Federal income tax rates in the United States increase with levels or brackets of income. What economic term is used to describe this type of tax rate structure?

• Autocratic

• Regressive

• Progressive

• Democratic

In the market for lemons, what determines the market price?

• The quantity of lemons produced

• The quantity of lemons purchased

• The price of limes

• The supply of lemons and the demand for lemons

Bill owns a house that has an assessed value of $180,000 and an estimated market value of $200,000. If the property tax rate on his house is 2%, how much will Bill have to pay in property tax on his house for the year?

• 0.02 * ($200,000 – $180,000)

• 0.02 * $180,000

• 0.02 * ($200,000 + $180,000)

• 0.02 * $200,000

Based on the economic concept of “time value of money”, $1 today

• Is worth less than $1 five years from now

• Is worth the same $1 five years from now

• May be worth more or less than $1 five years from now and it will depend on the interest rate

• Is worth more than $1 five years from now

The foregone rental income to a farmer who operates his own farm instead of renting it would be known as:

• An opportunity cost

• A fixed cost

• Hidden income

• A liability

The part of a loan that is repaid during a year is what type of payment?

• Interest

• Principal

• Mortgage

• Installment

What are the two general types of inputs used in a production process?

• Liquid and non-liquid

• Short run and long run

• Fixed and variable

• Those supplied and those demanded

A current asset is one that:

• Is currently being used by a business firm

• Has been paid for by the business owner

• Has been purchased within the past year by the business owner

• Can be converted into cash fairly easily within one year

The ability to convert assets into cash is known as:

• Solvency

• Profitability

• Liquidity

• Elasticity

If Boudreaux Farms is breaking even, they are operating where:

• Total revenues = total costs

• Marginal costs = marginal revenue

• Cash receipts = cash expenses

• Assets = liabilities