NEW
Font size
WorksheetsAmerican Free Enterprise System
Total questions: 34
Worksheet time: 17mins
The money left after production costs are subtracted from revenue is called
Free rider
Profit
Subsity
Scarcity
A person who chooses to, and is free to, open a grocery store is participating in a
command economy
centrally-planned economy
free enterprise economy
traditional economy
Most people are inspired to start a business by the
free contract clause
marginal benefit
open opportunity clause
profit motive
What is the role of producers?
make the product
buy the product
carry out government program
increase the profit of other retail stores
Which is an example of competition changing the marketplace?
a chain bookseller forcing many individual booksellers to go out of business
a chain hot dog restaurant failing to make a large profit
a chain coffee shop having no effect on individual coffee shops
a chain restaurant expanding its menu to include desserts
Free contract means that people can chose
for themselves what legal agreements to enter into
for themselves what positive externalities to support
to enter and compete in the marketplace
to enter into open opportunities
The incentive to improve material well-being by seeking to gain from economic activities is called
legal equality
marginal benefit
open opportunity
profit motive
Government restricts free enterprise through
deregulation
income redistribution
public policy
goods and services
In the marketplace, producers are looking to
buy goods for personal use
earn a profit
find incentives
find the latest fad
Open opportunity helps to ensure that everyone is free to
be efficient
invest in stocks
start businesses
maximize production
Producers determine the allocation of scarce resources by seeking
incentives and responding to consumer votes on a product
incentives and responding to all open opportunities
profits and responding to consumer votes on a product
profits and responding to all open opportunities
Consumers "vote" by choosing
a product over competing products
a resource over other resources
to become entrepreneurs
to keep away from fad products
If dry pasta began to receive more consumer votes through increased purchases, producers likely would
allocate fewer resources into the production of dry pasta
allocate more resources into the production of dry pasta
increase the amount of frozen pasta being produced
decrease the types of dry pasta being produced
Which is an example of allocating resources based on profit?
A bakery earns a profit by baking excellent muffins
A coffee shop earns a profit, making the owner a millionaire
An ice cream shop takes a loss, but other ice cream shops still open
An Italian restaurant earns a profit, causing other Italian restaurants to open
Typically, when households are shown on the right side of a circular flow model of a modified free enterprise system, businesses are located
on the left
in the center
at the top
at the bottom
The center of a typical circular flow model showing a modified free enterprise system is occupied by
businesses
products
government
resources
A modified free enterprise system
is dominated by elements of the command economic system
is dominated by elements of the traditional economic system
has no government involvement in the economy
has some government involvement in the economy
In modified free enterprise system, the government makes money by
taxes
making products
buying products
resource market
In modified free enterprise system, the government produces
nothing
public goods
businesses
households
Which is a modified free enterprise economy?
an economy that emphasizes a communist approach more than free enterprise
an economy that emphasizes a traditional approach more than free enterprise
an economy that has a few regulations in a free enterprise
an economy that has no regulations that adjust free enterprise
A market failure occurs when people who are not part of a marketplace interaction
are not affected by it
make no profit from it
benefit from of it
pay none of the costs of it
Public goods are funded by
charitable donations collected by the government
profits made by private businesses
profits made by public companies
taxes collected by the government
A person who does not pay for a service but benefits from it is called a(n)
free consumer
free rider
investment risk
subsidy risk
Street lighting is an example of a
local service
public good
private product
government subsidy
A common way of dealing with the free rider problem is for
the free riders to provide the good or service
the government to provide the good or service
individuals to provide the good or service
private business to provide the good or service
An example of a toll good is a(n)
antique store that charges high prices
highway that can be used without payment
public park with an entrance fee
swimming pool open to the public free of charge
An externality is a side effect of a transaction that affects
both the producer and the buyer
someone other than the buyer or producer
the buyer but not the producer
the producer but not the buyer
A public transfer payment happens when the government transfers income from
donors to recipients who do not provide anything in return
donors to recipients who provide something in return
taxpayers to recipients who do not provide anything in return
taxpayers to recipient who provide something in return
Goods and services that are necessary for society
free rider
positive externality
infrastructure
public subsidy
The U.S. government often makes transfer payments to
the aged and disabled
healthy people with high incomes
people over 50 years of age
the wealthiest people
A capitalist system is also known as a
Communist
Socialist
Free enterprise system
Traditional
Which is vital to a free enterprise system?
Government
Dow Jones
Profit
Competition
What role does the government play in the free enterprise system?
None
Limited
Large
All
Side effect of the transaction that affects someone other than the producer or the buyer.
Externality
Positive Economics
Profit
Competition
