The Economic System 2

What is scarcity in economic terms?

• Abundance of resources

• Lack of a particular resource

• Both A & B

• None of the above

What do business owners need and usually compete for in a market economy?

• Government support

• Resources

• Social programs

• Military contracts

What term describes the desire to make money in a market economy?

• Competition

• Scarcity

• Profit motive

• Command economy

___________ is an economic system in which the productive resources-farms, factories, machines, and so on-are owned by private citizens.

• Communism

• Capitalism

• Both A & B

• None of the above

Which economic system allows for the most individual freedom in economic decision-making?

• Traditional economy

• Command economy

• Free Market economy

• All of the above

What motivates individuals to provide goods and services in a market economy?

• prizes

• Profit motive

• Social responsibility

• presents

(A) ____________ is a situation in which a single company or entity controls the entire market for a particular good or service.

• communism

• capitalism

• monopoly

• All of the above

What is a key feature of free market economy?

• Government ownership of resources

• Central planning of production

• Individual freedom in economic decisions

• Limited competition among businesses

How does competition among sellers affect prices in a free market?

• It lowers prices

• It raises prices

• It has no effect on prices

• All of the above

Which economic principle states that businesses suffer from shortage of resources?

• Law of supply

• Law of demand

• Law of scarcity

• None of the above