2.04 BE Economics Fall 2022

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

• government regulation.

• economic choices.

• the extent of pollution.

• product prices.

In business terms, what is profit?

• a risky venture

• a good investment

• a holiday bonus

• a monetary reward

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.

What is a business's net profit if it has $762,750 in income, $291,400 in operating expenses, and $238,930 in cost of goods?

• $368,730

• $232,420

• $471,350

• $523,820

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

• monopolistic

• limited

• government

• private

When manufacturers give back part of the purchase price of an item to the customer, the manufacturers are engaged in:

• price fixing.

• nonprice competition.

• clearance sales.

• offering rebates.

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

• snowstorm

• accident

• rising prices

• government intervention

A business selects goods or services to sell. Which type of risk is this business using?

• transferring risk

• controlling risk

• bypassing risk

• avoiding risk

The basic role of the United States government is to:

• limit business startups.

• maintain control of prices.

• increase production.

• protect U.S. citizens.