American Free Market Test Review

What does the interaction between supply and demand decide?

• consumer preferences

• price of goods and services

• mixed economies

• free markets

What is consumption?

• that which determines price

• that which is given up when a choice is made

• making of goods and services

• using of goods and services

Seth has considered three different ways to spend his Saturday: go to the beach, start on his homework, or mow yards for extra money. Although he enjoys the beach, it is his third choice. He also decides he has plenty of time to do his homework on Sunday, so homework is his second choice. He decides that mowing yards is his best choice. What is the opportunity cost?

• buying gasoline for the lawnmower

• making money by mowing lawns on Saturday

• seeing his friends at the beach on Saturday

• getting his homework done on Saturday

What type of economic system does the United States have?

• mixed

• traditional

• free market

• command

What economic principle most likely determined by the price?

• capital

• scarcity

• demand

• consumption

Scarcity refers to-

• what is given up when a choice is made

• things used to change economic behavior

• the inability to satisfy all wants at the same time

• the factors of production

Which is a characteristic of a command economy?

• consumers often face a lack of choice

• investment is encouraged by the promise of profit

• economic decisions are based on custom

• the role of the government in the economy is restricted by law

What kind of economy does Sally live?

• command economy

• traditional economy

• mixed economy

• free market economy

A partnership is owned by-

• one person

• two or more people

• the government

• a group of investors

An entrepreneur is a person who-

• manages financial investments

• enforces government regulations for business

• sets the interest rates at banks

• takes the risk of production to make a profit