Economics Final Review

Which characteristic of the U.S. free enterprise system creates the incentive to work, save, and invest?

• A. Social Security system

• B. Voluntary exchanges

• C. Private property ownership

• D. Consumer sovereignty

One result of competition in a free enterprise system is —

• A. fewer consumer choices

• B. lower prices for products

• C. steady wages and incomes

• D. improved safety conditions

Which of the following is a basic characteristic of all economic systems?

• A. Price controls

• B. Wage incentives

• C. Small business owners

• D. Distribution of goods and services

Paying rent instead of purchasing tickets to a concert is an example of —

• A. scarcity

• B. property rights

• C. opportunity cost

• D. circular flow model

Which of the following best completes the diagram?

• Characteristics of Partnerships

• Characteristics of Free Enterprise

• Characteristics of Sole Proprietorships

• Characteristics of Corporations

One of the benefits of the U.S. free enterprise system is the —

• amount of choices for consumers

• guaranteed returns on investments

• lack of union participation by workers

• equal distribution of goods and services

Which of the following best describes the U.S. free enterprise system?

• Government price controls

• Nationalization of energy companies

• Markets that respond to consumer demand

• Public ownership of the factors of production

Scarcity is a basic economic problem because —

• A. resources are limited

• B. governments limit production

• C. opportunity costs limit demand

• D. people have trouble making choices

With a given amount of resources, a country with a comparative advantage will produce a product with —

• A. decreased demand

• B. lower opportunity costs

• C. cheaper natural resources

• D. higher quality specifications

Which of the following is the reason why countries specialize in particular trade products?

• A. Government regulations

• B. Variation in the size of markets

• C. Unequal distribution of resources

• D. Variety in the types of economic systems