5.02 Economic Systems and their effects on Business

Countries whose governments provide citizens with free medical care, education, and other benefits often are referred to as which type of state?

• Military
• Capitalist
• Consumer
• Welfare

Which is an example of a speculative business risk?

• A special promotion fails to increase sales.
• A supplier's shipment is lost in transit.
• A cashier gives unauthorized discounts to friends.
• A customer is injured at a business and sues the company.

Which is a problem associated with communist command economies?

• There is no competition.
• There are high taxes.
• Supply and demand control what will be produced.
• Individuals run the risk of losing their businesses.

In a private enterprise economic system, the interaction of supply and demand primarily determines:

• Government regulation
• Economic choices
• The extent of pollution
• Product prices

A vendor is extending credit to the Jones Company in return for the Jones Company's agreement to use the vendor as the sole source of its supplies. What federal act is the vendor and the Jones Company violating?

• Celler-Kefauver Act
• Clayton Act
• Sherman Act
• Robinson-Patman Act

The basic role of the United States government is to:

• Limit business startups
• Maintain control of prices
• Increase production
• Protect U.S. citizens

In business terms, what is profit?

• A risky venture
• A good investment
• A holiday bonus
• A monetary reward

For a business, income remaining after payment of expenses is:

• Loss
• Capital
• Profit
• Debt

Which represents a natural risk for the owner of a delivery service?

• Snowstorm
• Accident
• Rising prices
• Government intervention

A major characteristic of a market economy is which type of ownership of property?

• Monopolistic
• Limited
• Government
• Private