Newsela Free market

Read the following statement.

The government has the power to combat negative externalities.

Which sentence from the article BEST supports the statement above?

• For example, pollution created by a manufacturing plant can have a damaging effect on the health of those who live near the plant.

• Meanwhile, there are positive effects that come from maintaining a well-educated population, such as higher employment and higher average incomes.

• The government achieves this by using its funds to pay for agencies, such as the Environmental Protection Agency and the Federal Emergency Management Agency.

• These provide government funds in areas such as education and health care to generate more productive members of the economy.

Read the list of sentences from the article.

Many people believe it is the responsibility of the federal government to collect a portion of everyone's income and distribute it to the poorest people of the economy.

This is achieved through a range of programs, such as food assistance, unemployment benefits, free medical insurance and income supplements that transfer funds directly from taxpayers to proven low-income people and families.

In addition to Social Security, an important piece of federal income redistribution efforts is Medicare/Medicaid.

Conservatives argue that it is unfair that money earned by one person should be taxed and then given to others who did nothing to earn it.

Which two sentences taken together provide the BEST evidence to support the idea that people are divided on the benefits of redistribution?

• 1 and 3

• 1 and 4

• 2 and 3

• 2 and 4

Read the sentences from the section "Ensuring Stability."

Economic instability prevents growth, contributes to social and political tension, and threatens industry.

The legal and social framework upheld by federal activity serves as the basis for economic stability.

Which option BEST describes the relationship between the two sentences?

• The first sentence shows a cause and the second sentence gives an effect.

• The first sentence shows an effect and the second sentence gives a cause.

• The first sentence shows a problem and the second sentence gives a solution.

• The first sentence shows a solution and the second sentence gives a problem.

Read the sentences from the sections "Maintaining A Legal And Social Framework" and "Maintaining Competition."

Laws are needed to protect workers, consumers, investors and businesses from potentially unsafe or harmful behavior.

Foremost among them is preventing the formulation of unnatural monopolies, or monopolies created and maintained through illegal business practices, by enforcing antitrust laws.

Which option BEST describes HOW the sentences help develop a central idea of the article?

• Both sentences develop the idea that laws protect the U.S. economy.

• Both sentences provide examples of risky economic behavior.

• Both sentences highlight how laws can damage the U.S. economy

• Both sentences explain the dangers of monopolies for the economy.

How did the Internet affect how companies advertise to customers?

• Companies can now communicate directly with customers every day.

• New rules limit the information brands are given about customers.

• Advertisers have to figure out who is visiting specific websites.

• The Internet makes it harder for companies to reach customers.

According to the article, WHY do people like to buy fancy, new products?

• to increase the number of followers a customer has on social media

• to make sure they are the first person with an item

• to support brands that have the most reasonable prices

• to increase their cultural capital and social currency among other people

Read the following paragraph from the introduction [paragraphs 1-4].

In the 1980s, the French cultural philosopher Pierre Bourdieu proposed an idea that he called social capital. He saw social capital as a kind of status. It was based on the resources an individual could access through their family, friends and other kinds of networks. These resources could be used to explain success in certain social situations where money was not the only factor.

WHY did the author use the word "resources"?

• to explain how social capital passes between generations

• to suggest that social capital is about more than just money

• to show why brands are focused on earning social capital

• to argue that social capital has become increasingly important

Read the following paragraph from the section "Social Media Is Important In Consumers' Lives."

Social currency is now an economic concept. Economics is the study of how money and wealth are produced and used. As with cash and property, the economics of social currency are defined by a gap between the number of people who want access to a resource and the ability of the resource to fulfill that want. This means that social currency is defined by what economists call scarcity. Generally, the more a resource is scarce, the more it is valuable.

Which answer choice is the BEST definition of the word "scarcity" as used in the paragraph?

• expensive and exclusive

• a large amount

• in short supply

• new and desirable

What regulates a free market(pick all that apply)?

• Competition

• Consumers

• Price

• Self-Interest

Is there any pure Free market in the World?

• Yes

• No