Ch2 Entrepreneurs in a Market Economy

Generally, as the price of a product decreases, demand will also decrease.

• True

• False

Mixed economies often result when countries shift away from command economies toward market economies.

• True

• False

Entrepreneurs invest in their communities by contributing to the local economy and by providing jobs.

• True

• False

Opportunity cost is the price an entrepreneur pays to have the opportunity to go into business—usually involving fees and startup costs.

• True

• False

Which of the following is true when demand is inelastic?

• There are no acceptable substitutes for a product that consumers need.

• The product fulfills a basic need, not just a want.

• The change in price is small in relation to consumers' income, so consumers will continue to buy the products.

• all of the above

Earning a college degree would belong in which stage of Maslow’s hierarchy of needs?

• self-actualization

• physiological

• social

• security

Which of the following would be considered a capital resource?

• the oil used to run machinery

• employees who work on an assembly line

• executives who decide how to operate a business

• a truck used to make deliveries

_____ exists when there is only one provider of a product or service.

• Perfect competition

• An oligopoly

• Monopolistic competition

• A monopoly

How does competition benefit consumers?

• it forces a business to improve products

• it encourages businesses to provide good customer service

• it provides an incentive for businesses to keep prices as low as possible

• all of the above

Your needs and wants

• are the same as everybody else’s

• never end

• can all be satisfied if you have enough money

• all of the above are true