Unit 6 - Private Enterprise Practice Test

Every society must develop a system for deciding how it will use its resources so that it can

• meet people’s needs.
• minimize risk.
• prevent problems.
• control production.

Who answers the basic economic questions in a private enterprise economic system?

• Businesses and individuals
• Government agencies
• Influential citizens
• Entrepreneurs and producers

One of the results of freedom in the marketplace is that

• people can buy anything they can afford that can legally be sold.
• businesses use resources efficiently.
• people and businesses can own things of value.
• government decides how to use an individual’s private property.

Alex owns a guitar, several books, and a telescope. Alex’s possessions are examples of

• private property.
• economic resources.
• capital goods.
• equal distribution.

Which of the following is a benefit of the freedom to own private property:

• It encourages people to save and invest.
• It helps limit our economic choices.
• It encourages businesses to be cooperative.
• It allows people to do anything they want to do.

Which of the following statements best describes the way that the U.S. economic system functions:

• Individuals and businesses are the primary decision makers, while the government is the regulator.
• Individuals are the primary decision makers, while businesses are the regulators.
• Individuals and businesses are the primary decision makers, and there is no regulator.
• The government is the primary decision maker, and occasionally it becomes the regulator.

The basic role of the United States government is to

• protect U.S. citizens.
• maintain control of prices.
• increase production.
• limit business startups.

In a private enterprise economic system, consumers can choose from a variety of products as a result of

• competition.
• the collection of taxes.
• limited government control.
• inflation.

The economic basis for the private enterprise economic system is

• the profit motive.
• competition.
• the marketplace.
• supply and demand.

The private enterprise economic system is often described as a(n)

• price-directed system.
• pure system.
• controlled system.
• entrepreneur system.