American Economics

What type of economic system does the United States favor?

• Traditional

• Command

• Market

• Wants and Needs

In a command economy, most of the capital, tools, and production equipment are

• outdated.

• privately owned.

• owned by the government.

• unregulated.

The issue of scarcity of natural resources

• demands government intervention.

• results from governmental regulations of industry

• is not a problem in the United States

• helps determine their value.

The law of supply states that

• businesses will provide more products when they can sell them at higher prices,

• businesses will provide fewer products when they can sell them at higher prices.

• consumers will purchase fewer products when they must buy them at higher prices.

• consumers will purchase fewer products when they can buy them at lower prices.

The law of demand states that

• businesses will provide more products when they can sell them at higher prices.

• businesses will provide fewer products when they can sell them at higher prices.

• consumers will purchase fewer products when they must buy them at higher prices.

• . consumers will purchase fewer products when they can buy them at lower prices.

An essential factor of a free market economy is

• profit.

• government assistance.

• competition.

• availability of resources.

If one large company owned all of the hotels in one country, that company would have a

• nonprofit organization.

• monopoly.

• free market.

• dividend.

Last Christmas a popular toy was sold out all over town. When a local toy store received a shipment, it advertised the toy at twice its normal price. The store doubled the price due to

• scarcity.

• competition.

• increased productivity.

• a monopoly.

The U.S. economic system can best be described as a mixed economy because

• there is a competition for resources and profit amongst businesses.

• there are both small and large businesses.

• businesses operate freely but must follow certain government regulations.

• businesses follow the laws of supply and demand.

A small, family-owned bakery is an example of a

• sole proprietorship.

• corporation.

• conglomerate.

• nonprofit organization.