Economics Review

Which of the following is an example of the effects of competition in the economy?

• A gas station goes out of business because of a fire.

• A gas station raises its prices because of an oil shortage.

• A gas station lowers its prices when the price of oil goes down.

• A gas station lowers its prices when a new gas station opens up next door.

Which of the following describes an entrepreneur?

• A person who is hired to work in a factory.

• A person who organizes, operates, and assumes the risk for a business venture.

• A person who organizes loans the money to a new business just getting started.

• A person who invests in businesses to make money.

Why would a person be willing to risk losing money in starting a new business?

• the person makes bad financial decisions

• The person does not care if he or she loses money

• The business is guaranteed to make money

• The person believes the business has a greater chance of succeeding than failing.

Which of the following is an example of the effects of competition in the economy?

• The price of oranges goes up when Florida has a drought.

• Shoppers have to pay sales tax on all items they buy

• Retired people receive payments from the government.

• A small hardware store closes when a large Home Depot store opens nearby.

Tom grows vegetables and sells them to the local neighbors. They have always liked Tom's vegetables, but a new grocery store opened around the corner. The store sells vegetables too, and many of Tom's neighbors shop there instead. This means that the demand of Tom's vegetables has gone down.

• True

• False

Identify a person who gets paid directly from tax dollars.

• an older store clerk

• an airplane pilot

• a school principal

• a newspaper writer

Why are fire departments considered a public service?

• The government makes sure firefighters considered are qualified

• they often include a group of local volunteers

• Fire departments will help all citizens of the public

• They are created and funded by the government

Which is a service produced by the public sector?

• police services

• hair salon services

• internet services

• car repair services

Which service in the community is usually produced by the private sector?

• electricity

• road repair

• banking

• education

Which of the following is a private good or service?

• the parks and recreation department

• a landscape architect

• Lake Michigan

• the agricultural extension agency