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WorksheetsS25TH - Economic Systems and the Business Environment
Total questions: 65
Worksheet time: 33mins
Name
Class
Date
1.
True or False. Each day in the United States, thousands of new businesses are born.
a)
True
b)
False
2.
True or False. Most new businesses in the U.S. survive and earn good profits.
a)
True
b)
False
3.
True or False. Understanding the business environment and adapting the business to that environment is a critical factor in separating the success stories from the tales of business failure.
a)
True
b)
False
4.
True or False. Most businesses are organizations that try to earn a profit.
a)
True
b)
False
5.
True or False. Businesses earn a profit if their revenue is less than their expenses.
a)
True
b)
False
6.
True or False. When interest rates are low, fewer people can afford to buy houses, cars, and other big-ticket items that normally require borrowing money.
a)
True
b)
False
7.
True or False. Technology often helps businesses improve their own internal processes.
a)
True
b)
False
8.
True or False. Advances in technology can hurt a business, or even drive them out of business.
a)
True
b)
False
9.
True or False. The United States has one of the highest standards of living in the world.
a)
True
b)
False
10.
True or False. The United States has one of the highest quality of life in the world.
a)
True
b)
False
11.
Which of these is NOT included in measuring the quality of life:
a)
consumer price index (CPI)
b)
life expectancy
c)
educational standards
d)
health
e)
sanitation
12.
True or False. All businesses try to make a profit.
a)
True
b)
False
13.
True or False. 501(c)(3) organizations pay income taxes, just like for-profit businesses.
a)
True
b)
False
14.
Which of these is NOT one of the four traditional factors of production that are common to all productive activity:
a)
natural resources
b)
labor
c)
capital
d)
entrepreneurship
e)
tarrifs
15.
Which of these is not one of the main types of economic systems:
a)
free market economy
b)
planned economy
c)
tragedy of the commons
d)
mixed economy
16.
True or False. In recent years, more countries have shifted toward free-market economic systems and away from planned economies.
a)
True
b)
False
17.
Which of these is normally true about countries with socialist economic systems:
a)
They provide their citizens with a higher level of services,
b)
Their taxes are higher than capitalistic companies
c)
Their unemployment rates are higher than capitalistic companies
d)
All of these are true
e)
None of these are true
18.
In a free market economy, the supply and demand for products is mostly driven by:
a)
Traffic signals
b)
Uber drivers
c)
Price signals
d)
The stock market
e)
The IRS
19.
When prices rise, normally:
a)
Supply increases
b)
Supply decreases
c)
Demand increases
d)
Demand decreases
20.
When prices decrease, normally:
a)
Supply increases
b)
Supply decreases
c)
Demand increases
d)
Demand decreases
21.
People who take a benefit without paying are called:
a)
Teenagers
b)
Free Riders
c)
Public Riders
d)
Riders on the Storm
e)
Criminals
22.
True or False. One reason we have taxes is that some services are so essential, we shouldn't let people opt out.
a)
True
b)
False
23.
A "public good" has:
a)
non-exclusion
b)
non-rivalry
c)
Both of these
d)
Neither of these
24.
Non-exclusion means:
a)
People who don't pay still get the benefit
b)
Only the people who pay get the benefit
c)
Both of these
d)
Neither of these
25.
The Tragedy of the Commons is:
a)
The idea that goods that everyone has free acces to are often misused and exploited.
b)
The idea that high school students prefer to go out for lunch, instead of eating in the commons
c)
The idea that the Common Man can't earn a liveable wage.
d)
Fanfare for the Common Man, by Emmerson Lake & Palmer.
26.
When people other than the producer or consumer of a good or service are made worse off by the good or service, that is called a:
a)
negative externality
b)
positive externality
c)
neutral externality
d)
horizontal externality
e)
vertical externality
27.
Economists often consider education to be a
a)
Positive externality
b)
Negative externality
c)
Public good
d)
Tragedy of the commons
28.
Economists often consider pollution to be a:
a)
Positive externality
b)
Negative externality
c)
Public good
d)
Tragedy of the commons
29.
Which of these is NOT a true statement about externalities:
a)
They provide the justification for almost everything that the government does.
b)
Governments often provide subsidies when there is a positive externality.
c)
Governments often impose taxes when there is a negative externality.
d)
A free market system only creates positive externalities - not negative externalities.
e)
A free market system creates both positive externalities and negative externalities.
30.
In a pure free market economy, the primary role of government does NOT include:
a)
Enforcing the rule of law
b)
Protecting people's property rights
c)
Making sure that everyone can earn a liveable wage
31.
For goods or services that are scarce, which THREE these things are true:
a)
The price will increase
b)
The price will reduce demand for the product
c)
The price will increase the supply of the product
d)
The price will fall
e)
The price will increase demand for the product
32.
If there is too much of a good, which THREE these things are true:
a)
The price will fall
b)
The price will increase demand for the product
c)
The price will decrease the supply of the product
d)
The price will be increase
e)
The price will reduce demand for the product
33.
Which of these is NOT a true statement about free market systems:
a)
Producers and consumers act in the best interest of society as a whole.
b)
Consumers directly communicate what they need or want, and producers directly respond to those needs and wants.
c)
Producers and consumers act in their own best interest.
d)
Resources are allocated efficiently, based on demand for products and services
34.
Adam Smith argued that, in a free market system:
a)
consumers act in their own self-interest when deciding what to buy
b)
producers act in their own self interst when deciding what to produce or sell
c)
consumers and producers fulfill the best interest of society as a whole
d)
All of these.
e)
None of these.
35.
Adam Smith's argument about how the free market system efficiently serves the best interest of society as a whole is called the:
a)
Invisible hand
b)
Visible hand
c)
Government hand
d)
Free market hand
e)
Learned Hand
36.
Which of these does competition in a free market system often achieve:
a)
The profit incentive motivates companies to reduce the resources used to produce goods and services.
b)
The profit incentive motivates companies to goods and services that consumers need or want.
c)
The profit incentive motivates companies to innovate and improve.
d)
All of these are true.
e)
None of these are true.
37.
Why do most government agencies lack an economic incentive to become more efficient?
a)
They don't have competition.
b)
They don't have a profit motive.
c)
Both of these are reasons.
d)
Neither of these are reasons - government agencies are normally more efficient than private businesses.
38.
Which of these is NOT true in a command or centrally planned economy:
a)
The government decides how resources should be used.
b)
The government directs production through state-owned enterprises.
c)
Competition drives efficiency and innovation.
39.
Which of these do some economists give as a justification for command or centrally planned economies?
a)
Free market systems create highly unequal outcomes, with the rich getting richer and the poor getting poorer.
b)
The government can redistribute income so that it is more equal.
c)
The government can decide what is best for society.
d)
All of these are justifications.
40.
Which TWO of these are more likely in a free market economy than in a command economy?
a)
Equality
b)
Investments for the common good
c)
Efficiency
d)
Innovation
41.
Which TWO of these are more likely in a command economy than in a free market economy?
a)
Equality
b)
Investments for the common good
c)
Efficiency
d)
Innovation
42.
True or False. Most countries are either pure free market economies or pure central/command economies.
a)
True
b)
False
43.
Which economic system do all the economists agree is best?
a)
Free market
b)
Central/Command
c)
Mixed
d)
None of these - economists don't agree on which system is best.
44.
As new technology emerges, companies:
a)
Can benefit from them
b)
Can face challenges competing with them
c)
Both of these
d)
Neither of these
45.
Which of these is NOT a demographic factor that plays a role in the target market for businesses:
a)
Tariffs
b)
Age
c)
Gender
d)
Race
e)
Education level
46.
Paying attention to environmental factors can help businesses ______.
a)
All of these
b)
Protect the environment
c)
Keep existing customers
d)
Add new customers
e)
Increase profits
47.
In 1,000 BC, the average person was ___
a)
Poor
b)
Hungry
c)
Both of these
d)
Neither of these
48.
What do economists call the increase in wealth that came with the industrial revolution?
a)
The hockey stick
b)
The croquet mallet
c)
The baseball bat
d)
The hockey puck
49.
True or False. People today are incredibly rich, compared to our ancestors.
a)
True
b)
False
50.
True or False. Before the industrial revolution, most people built most of what they used.
a)
True
b)
False
51.
Which of these are true about most people in modern times?
a)
They only do one job.
b)
They consume things that are made by many different people
c)
Both of these
d)
Neither of these
52.
What did Adam Smith try to explain in Wealth of Nations?
a)
Adam Smith didn't write Wealth of Nations, John Maynard Keynes did.
b)
How more people were able to build wealth, starting in the late 1800's.
c)
The impact that the industrial revolution had on the environment.
d)
The impact that industrial revolution had on working conditions in factories.
53.
(Addisyn) True or False: Capitalism often leads to better and more diverse products, keeps prices stable, and increases the efficiency of producers
a)
True
b)
False
54.
(Emily) True or False: Services are tangible items manufactured by businesses, like cell phones, laptops, or shoes.
a)
True
b)
False
55.
(Galia) True or False: Physicians, lawyers, hair stylists, car washes, and airlines all provide services.
a)
True
b)
False
56.
(Mya) T/F: Businesses are organizations that try to earn a profit by selling goods and services to customers.
a)
True
b)
False
57.
(Sarah) T/F: The United States has one of the highest quality of life in the world.
a)
True
b)
False
58.
(Hezekiah)True or False: tools, machinery, equipment, and buildings used to produce goods and services and get them to the consumer are known as capital.
a)
True
b)
False
59.
(Zayden) True of False As the income taxes that consumers pay increases, consumers have less money to spend on goods and services, and this can decrease demand and the profit that businesses can earn.
a)
True
b)
False
60.
(Nathanyal) T/F: The U.S. Government is the largest not-for-profit group in the United States.
a)
True
b)
False
61.
(Aunders) MC: _____ is the average income earned per family.
a)
A. Cost of Living
b)
B. Standard of Living
c)
C. Household Income
62.
(Lucy) True or False. When interest rates are low, fewer people can afford to buy houses, cars, and other big-ticket items that normally require borrowing money.
a)
True
b)
False
63.
(Andrew) T/F: Most new businesses survive and make good profits.
a)
True
b)
False
64.
(Kamila) Multiple Choice: Physical conditions in the enviroment that can impect a business is called ___ forces
a)
A- Climate Forces
b)
B- Forest Forces
c)
C- Enviromental Forces
d)
D- Tourism Forces
65.
(Joanna) MC: Four traditional of factors of production that are common are:
a)
A: Land, Labor, Leader, Capital goods
b)
B: CEO, Earth, Leadership, Items
c)
C: The universe, The company, Machines, Notes
d)
D: land, labor, Capital, Entrepreneurship
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