Economics Unit 4 Test Review

Which of the following best defines an entrepreneur?

• A person who manages government resources

• A person who organizes resources to produce goods or services for profit

• A person who works only for wages

• A person who lends money to new businesses

Which of the following is an example of a capital resource?

• A factory building

• A farmer

• A forest

• A truck driver

Entrepreneurs earn profits when:

• Costs exceed revenue

• Revenues exceed costs

• They borrow money from the government

• They avoid paying taxes

Which of the following is a potential negative aspect of entrepreneurship?

• Unlimited earning potential

• Risk of financial loss

• Freedom to make decisions

• Ability to innovate

Which of the following government policies would most likely encourage entrepreneurship?

• High corporate taxes

• Complicated licensing regulations

• Access to research grants and startup funding

• Strict labor laws

An example of labor income would be:

• A dividend check from owning stock

• A paycheck earned from working at a store

• Rent paid by a tenant

• Profit from selling a business

A person who earns money from renting out property is earning income from:

• Labor

• Natural resources

• Capital

• Entrepreneurship

The main purpose of organizing productive resources is to:

• Eliminate competition

• Earn profits

• Limit supply

• Avoid government regulations

Which of the following is a positive aspect of entrepreneurship?

• Financial uncertainty

• Long hours and stress

• Ability to be innovative and independent

• Difficulty obtaining funding

A business that experiences higher costs than sales revenue will:

• Earn a profit

• Break even

• Incur a loss

• Increase efficiency