Importance of Entrepreneurship in the Economy

Which of the following is a problem a nation might attempt to solve through its economic system?

• limited supply of goods and services

• democracy

• entrepreneur’s profit motive

• all of the above

The equilibrium price is

• the price set by the government

• the price at which supply equals demand

• the price at which exports equal imports

• the price set by the foreign exchange rate

Profit is beneficial to entrepreneurs because

• profit builds wealth and financial independence

• profit is the equilibrium quantity on a supply and demand curve

• profit is a barrier to international trade

• profit is the answer to one of the fundamental questions of economics

A market economy is also called

• socialism

• capitalism

• free enterprise system

• b and c

The profit motive is

• the money left over after expenses are subtracted from sales

• the economics of one unit

• a reason entrepreneurs take on business risks

• profi t calculated as a percentage of expenses

Which of the following statements about competition is false?

• competition motivates entrepreneurs to introduce new products to consumers

• competition between suppliers drives prices upward

• competition between consumers benefits suppliers

• competition occurs between suppliers and between consumers

Importing and exporting are activities primarily associated with

• nonprofit organizations

• the profit motive

• the economics of one unit

• the global economy

The economics of one unit is a calculation of

• the equilibrium quantity on a supply curve

• how many items an entrepreneur has for sale

• the profit or loss associated with a unit of sale

• foreign demand for an entrepreneur’s product

The United States economy is best described as

• a pure market economy in which the government plays no role in the economy

• a pure command economy in which the government controls the economy

• a mixed economy in which suppliers and consumers play the primary role

• a socialist economy in which suppliers and consumers play the primary role

Which of the following challenges poses a business risk to entrepreneurs who want to conduct international trade?

• tariffs that must be paid to import goods

• cultural differences between nations

• trade barriers

• all of the above