WorksheetsBE 2.03-2.05
Total questions: 120
Worksheet time: 3600secs
Which of the following items is found in all economic systems:
Technology
Participants
Substistence
Dollars
The most common medium of exchange in modern economic systems is
Barter
Capital
Credit
Money
One of the reasons that a country needs an economic system is because it
Is independent of other nations
Has limited wants and needs
Has a limited supply of resources
Has immigrants from several countries
Which of the following types of economic systems adopts the fewest new ideas and improvement:
Communist command
Socialist command
Market
Traditional
In an economy, the government controls the economic system and does not allow private ownership of the means of production and distribution.
Traditional
Market
Socialist command
Communist command
Government owns some basic means of production, but there is private ownership of business under
Communism
Capitalism
Socialism
Entrepreneurship
In a economy, individuals and businesses own the means of production and distribution with limited government regulation.
Market
Traditional
Socialist command
Communist command
An example of a country that has a socialist command economy is
Japan
Sweden
China
North Korea
Which of the following cultures has a traditional economic system:
Amazon Rainforest communities
Villages in the Rocky Mountains
Rural areas in Demark
Cuban neighborhoods
A country that currently has a communist command economic system is
Japan
Denmark
North Korea
India
What type of economic system is used in the United States?
Market
Socialist command
Traditional
Communist command
The way in which an economic system answers the basic economic questions depends upon the country's
Supply
Government
Demand
Products
In a traditional economic system, the question of what to produce is answered by producing
What the government chooses
What customers need and want
What supply dictates
What has always been produced
In a communist command economy, who decides how the economic questions will be answered?
Businesses
Individuals
Government
A venture team
In a socialist economic system, who tends to answer the question of how products will be produced?
Government and business
Government and individuals
Business and individuals
Tradition and government
What action do consumers take that determines what will be produced in a market economy?
Apply for jobs
Cast economic votes
Produce products
Comparison shop
Lack of economic growth is a major problem for economic systems.
Traditional
Communist command
Market
Socialist command
Communist command economies are most likely to experience which of the following problems:
Shortage of capital investment
Surplus of consumer goods
Poor quality products
High income taxes
A major problem for individuals and private businesses in a socialist command economy is
Lack of competition
Taxes
A shortage of consumer goods
Profit
Which of the following is a potential problem in market economies:
No competition
Total government control
Production quotas for businesses
Financial loss
Every society must develop a system for deciding how it will use its resources so that it can
Minimize risk
Meet people's needs
Prevent problems
Control production
Who answers the basic economic questions in a private economic system?
Government agencies
Influential citizens
Businesses and Individuals
Entrepreneurs and producers
One of the results of freedom in the marketplace is that
Businesses use resources efficiently
People and businesses can own things of value
People can buy anything they can afford that can legally be sold
Government decides how to use an individual's private property
Alex owns a guitar, several books, and a telescope. Alex's possessions are examples of
Private property
Economic resources
Capital goods
Equal distribution
Which of the following is a benefit of the freedom to own private property:
It helps limit our economic choices
It encourages businesses to be cooperative
It encourages people to save and invest
It allows people to do anything they want to do
The basic role of the United States government is to
Protect U.S. citizens
Maintain control of prices
Increase production
Limit business startups
In a private enterprise economic system, consumers can choose from a variety of products as a result of
The collection of taxes
Limited government control
Inflation
Competition
Which of the following statement best describes the way that the U.S. economic system functions:
Individuals are the primary decision makers, while businesses are the regulators
Individuals and businesses are the primary decision makers, and there is no regulator
The government is the primary decision maker, and occasionally it becomes the regulator
Individuals and businesses are the primary decision makers, while the government is the regulator
The economic basis for the private enterprise economic system is
Competition
The profit motive
The marketplace
Supply and demand
The private enterprise economic system is often described as a(n)
Pure system
Controlled system
Entrepreneur system
Price-directed system
Which of the following is a disadvantage of private enterprise:
Elimination of poverty
Periods of unemployment
Careful use of resources
Equal distribution of income
Private enterprise is based on the idea that everyone is better served when
Businesses regularly increase their prices
Individuals are free to set their own goals
Government determines where individuals will work
Economic resources are controlled by the government
One of the benefits of economic freedom is that it provides individuals with
Equality in the workplace
The opportunity for success
The right to buy anything
A good standard of living
One of the freedoms provided to individuals by the private enterprise system is the freedom to choose
Which taxes they will pay
How much they will be paid
Where they will work
Which laws they will obey
Why are entrepreneurs important in a private enterprise system?
They get rid of competition
They use resources inefficiently
They encourage the development of new products
They are responsible for deceptive advertising
One of the differences between private enterprise and other types of economic systems is that in other systems, workers
May be prohibited from improving their standard of living
Are able to make a wide variety of economic choices
Are allowed to change jobs whenever they want to do so
Can go to work for themselves if they are dissatisfied
Malinda owns a home, and instead of living in it, she decides to rent it out to make more money. Which economic freedom does this illustrate?
Freedom to own, use, buy, and sell private property
Freedom to compete for jobs
Freedom to choose which laws to obey
Freedom to control all the money you earn
For which of the following do workers compete in a private enterprise system:
Skills
Benefits
Profits
Jobs
Individuals put limits on their own economic freedom by
Making personal economic choices
Competing with others
Complying with the law
Deciding to learn new job skills
One of the factors that directly limits the economic freedom of individuals in a private enterprise system of government
Indecision
Production
Services
Taxation
In business terms, what is profit?
A good investment
A holiday bonus
A monetary reward
A risky venture
If expenses are greater than income, there’s no
risk.
guarantee.
reward.
sales.
In business terms, income is the money
supplied.
spent.
received.
produced.
The amount of money paid for raw materials and products sold is called
cost of goods.
net profit.
operating expense.
gross profit.
The money spent to run a business is called
operating expense.
gross profit.
cost of goods.
net profit.
Gross profit shows business owners the difference between what they’ve
estimated and invoiced.
paid and risked.
received and billed.
spent and received.
Business owners are usually interested in net profit because they want to know what they can
risk.
produce.
keep.
supply.
Besides motivation, what does profit provide business owners in particular?
Influence
Determination
Satisfaction
Energy
Which of the following is a general benefit profit provides:
More products
Higher prices
Better supplies
Better wages
Each purchase strengthens the economy by encouraging
trade.
expansion.
competition.
investment.
Profitable businesses often help improve their local communities by
increasing salaries of executives.
building facilities in other cities.
investing in foreign companies.
contributing to charitable causes.
If no profit is generated for an extended period, a business must
reduce expenses.
lay off employees.
invest wisely.
shut down.
Which of the following is a situation in which people are out of work and can’t afford “extra” purchases:
Bad economy
Bad investment
Negative circumstance
Unexpected event
A popular product is said to be
late.
out of style.
available.
in demand.
Which of the factors that affect profit are usually able to be controlled?
Pricing and billing
Expenses and billing
Income and expenses
Expenses and pricing
Businesses must be careful about increasing the prices of their goods to increase profits because the result may be that they
lose sales to competitors.
have to find new suppliers.
lose their stockholders.
increase their operating expenses.
Which activities are likely to increase a firm’s profit?
Increasing sales and decreasing expenses
Decreasing sales and increasing expenses
Increasing supplies and decreasing production
Decreasing supplies and increasing production
When employees are working faster or better, they are increasing their
benefits.
value.
efficiency.
wages.
To use resources wisely, business owners must reduce
risk.
waste.
reward.
wages.
For each new product it offers, a business seeks
buyers.
lenders.
investors.
sellers.
In business terms, what is profit?
a good investment
A holiday bonus
a monetary reward
A risky venture
If expenses are greater then income, there's no
reward
risk
sales
guarantee
In business terms, income is the money
produced
supplied
spent
received
The amount of money paid for raw materials and products sold is called
operating expenses
cost of goods
net profit
gross profit
The money spent to run a business is called
operating expense
cost of goods
net profit
gross profit
Gross profit shows business owners the difference between what they’ve
spent and received
paid and risked
received and billed
estimated and invoiced
Business owners are usually interested in net profit because they want to know what they can
produce
supply
keep
risk
Besides motivation, what does profit provide business owners in particular?
determination
satisfaction
energy
influence
Which of the following is a general benefit profit provides:
more products
better wages
higher prices
better supplies
Each purchase strengthens the economy by encouraging
expansion
investment
trade
competition
Profitable businesses often help improve their local communities by
investing in foreign companies
building facilities in other cities.
contributing to charitable contributions
increasing salaries of executive
If no profit is generated for an extended period, a business must
lay off employees
reduce expenses
invest wisely
shut down
Which of the following is a situation in which people are out of work and can’t afford “extra” purchases:
unexpected event
bad investment
negative circumstances
bad economy
A popular product is said to be
in demand
late
out of style
available
Which of the factors that affect profit are usually able to be controlled?
income and expenses
expenses and pricing
pricing and billing
expenses and billing
Businesses must be careful about increasing the prices of their goods to increase profits because the result may be that they
have to find new suppliers
lose sales to competitors
increase their operating expenses
lose their stockholders
Which activities are likely to increase a firm’s profit?
Increasing sales and decreasing expenses
Increasing supplies and decreasing production
decreasing sales and increasing expenses
Decreasing supplies and increasing production
When employees are working faster or better, they are increasing their
wages
benefits
value
efficiency
To use resources wisely, business owners must reduce
risk
reward
waste
wages
For each new product it offers, a business seeks
sellers
lenders
investors
buyers
In business terms, what is profit?
a good investment
A holiday bonus
a monetary reward
A risky venture
If expenses are greater then income, there's no
reward
risk
sales
guarantee
In business terms, income is the money
produced
supplied
spent
received
The amount of money paid for raw materials and products sold is called
operating expenses
cost of goods
net profit
gross profit
The money spent to run a business is called
operating expense
cost of goods
net profit
gross profit
Gross profit shows business owners the difference between what they’ve
spent and received
paid and risked
received and billed
estimated and invoiced
Business owners are usually interested in net profit because they want to know what they can
produce
supply
keep
risk
Besides motivation, what does profit provide business owners in particular?
determination
satisfaction
energy
influence
Which of the following is a general benefit profit provides:
more products
better wages
higher prices
better supplies
Each purchase strengthens the economy by encouraging
expansion
investment
trade
competition
Profitable businesses often help improve their local communities by
investing in foreign companies
building facilities in other cities.
contributing to charitable contributions
increasing salaries of executive
If no profit is generated for an extended period, a business must
lay off employees
reduce expenses
invest wisely
shut down
Which of the following is a situation in which people are out of work and can’t afford “extra” purchases:
unexpected event
bad investment
negative circumstances
bad economy
A popular product is said to be
in demand
late
out of style
available
Which of the factors that affect profit are usually able to be controlled?
income and expenses
expenses and pricing
pricing and billing
expenses and billing
Businesses must be careful about increasing the prices of their goods to increase profits because the result may be that they
have to find new suppliers
lose sales to competitors
increase their operating expenses
lose their stockholders
Which activities are likely to increase a firm’s profit?
Increasing sales and decreasing expenses
Increasing supplies and decreasing production
decreasing sales and increasing expenses
Decreasing supplies and increasing production
When employees are working faster or better, they are increasing their
wages
benefits
value
efficiency
To use resources wisely, business owners must reduce
risk
reward
waste
wages
For each new product it offers, a business seeks
sellers
lenders
investors
buyers
Which of the following is one of the main principles of the private enterprise system:
Monopoloies
Competition
Price fixing
Exclusive agreements
Burger King and McDonald's are examples of
Regulated monopolies
Unregulated businesses
Dissimilar firms
Direct competitors
If a consumer chooses to go to the movies rather than to a pizza parlor, then the movie theater and the pizza parlor are
Direct competitors
Indirect competitors
Engaging in prospecting
Engaged in price competition
Most businesses put their greatest competitive efforts into competing
Locally
Nationally
With direct competitors
When with indirect competitors
An electronics store charges less for a new television than other electronics store. The store is engaging in competition.
Price
Nonprice
Unethical
Sales
When Maura purchased a new car, she was able to get part of the purchase price back from the car's manufacturer. The car's manufacturer engaged in
Price fixing
Non-price competition
Clearance sales
Offering rebates
Offering high quality, large assortments, and free shipping are examples of
Rebates
Nonprice competition
Price fixing
Price competition
A business that advertises a special sale as well as its delivery service is using a combination of competition.
Price and nonprice
Direct and indirect
Perfect and monopolistic
Local and national
Which of the following statements about perfect competition is correct:
There is a limited supply of goods and services
Businesses have a good deal of control over the market
Products vary from seller to seller
Is is used as a benchmark to compare real market structures against
What type of market structure is most commonly found in a private enterprise economy?
Perfect competition
Regulated monopolu
Oligopoly
Monopolistic competition
The automobile industry, the pharmaceutical industry, and the oil industry are all examples of
Market structures
Perfect competition
Oligopolies
Monopolistic competition
Which of the following are qualities of monopolies:
High prices and low production
Low production and much competition
High prices and much competition
Low prices and little competition
In many places, trash pickup is legally controlled by just one company. This is known as
A regulated monopoly
Price discrimination
Price competition
Nonprice competition
Which of the following pieces of legislation prevents monopolies from forming and hinders price fixing:
Clayton Act
Robinson-Patman Act
Sherman Antitrust Act
Celler-Kefauver Antimerger Act
One way that competition benefits business is by encouraging the creation of
New companies
More regulations
Unrelated firms
Limited resources
What motivates businesses to produce efficiently and sell effectively?
The desire to spend money
The hope of making a profit
The need for recognition
The chance to start a trend
One of the ways that competition benefits customers is by encouraging businesses to
Develop fewer new products to sell
Increase the price of their products
Improve their existing products
Reduce the number of their services
Which of the following is a direct benefit to consumers of the effects of competition:
Higher product prices
Wider product selection
Wise use of resources
Fewer new businesses in the market
Because of competition, people in our society enjoy
A narrower selection of goods and services
Fewer changes in existing goods and services
Government control of our economic system and businesses
A higher standard of living than that of people in many other countries
One way that competition helps build a prosperous society is by
Replacing small businesses with large ones
Creating government legislation
Creating new jobs
Increasing the money supply
