The role of businesses is to produce and distribute goods and services that people need and want.

True or False: The most basic of needs is security.

Both types of wants—economic and noneconomic—form the basis of an economy.

Needs and wants are unlimited.

True or False: Economic resources are not factors of production.

Services must be provided to you at the time you need them—they cannot be stored.

Capital resources include buildings and equipment.

All economic resources have a limited supply.

All businesses that exist in the United States today began as an entrepreneurial idea.

Needs include all of the following except

Things that you think you must have in order to be satisfied are called

The psychologist who developed a theory on the hierarchy of needs was.

According to the theory of hierarchy of needs, people must satisfy lower-level needs before they can focus on higher-level needs.

Earning a college degree is an example of satisfying which of the following areas of needs?

Products you can see and touch are called

The three types of economic resources that an entrepreneur may use to create useful goods and services are called

Raw materials supplied by nature are

Which of the following would not be considered a capital resource?

In the U.S. economy, entrepreneurs fulfill consumers’ wants and needs, provide employment, help change the way people live and conduct business.

Directions: Place a T for True or an F for False in the Answers column to show whether each of the following statements is true or false. 1. Entrepreneurship thrives in a market economy.

The traditional economy is used in developed countries.

A mixed economy often results when a country shifts away from a command economy toward a market economy.

The U.S. economic system is best described as a traditional economy.

The rivalry among businesses to sell their goods and services is called competition.

Two factors that commonly enter into economic decision making are scarcity and opportunity cost.

The value of the next-best economic alternative is the trade-off cost.

Directions: Place a T for True or an F for False in the Answers column to show whether each of the following statements is true or false. 8. The functions of business operate independently of each other.

The primary reason a business exists in a market economy is to earn a profit.

Which of the following is not one of the three basic questions that all economies must answer?

In a command economy, there is very little choice for consumers in what is available, individuals may not always be able to obtain exactly what they want, the government determines what, how, and for whom goods are produced.

In a market economy, individual choice ___ creates the market for a good or service.

Today, China operates under a ___ economy.

The U.S. economic system is based on all of the following principles except

In the U.S. economy, competition forces a business to

Scarcity exists because

All of the following are a function of business except

All of the following are components of the marketing mix except

Directions: Place a T for True or an F for False in the Answers column to show whether each of the following statements is true or false. 1. The supply curve for a market economy shows that as the price of a product or service rises, suppliers are willing to produce more of the good or service.

The demand curve for a market economy shows that as the price of a product or service rises, individuals are willing to consume more of the good or service.

Demand elasticity occurs when demand for a product is affected by its price.

Inelastic demand occurs when a change in price creates more demand.

Fixed costs must be paid even if a company has no sales.

When the quantity of a good or service produced increases, variable costs remain the same.

Directions: Place a T for True or an F for False in the Answers column to show whether each of the following statements is true or false. 7. Marginal benefit measures the advantages of producing one additional unit of a good or service.

In a market with perfect competition, a small number of businesses gain the majority of total sales revenue.

It is difficult for new businesses to enter a market with an oligopoly market structure.

A supply curve shows that the quantity produced increases as price increases.

A demand curve shows that the quantity consumed increases as price decreases.

The fixed costs of a business include monthly rent.

If an entrepreneur’s variable cost for each unit produced is $1.35, how much would the fixed costs increase if 30 additional units were demanded each day?

When a business owner decides to grow the business he or she needs to consider the

Market structures are distinguished by all of the following except

Which of the following is not one of the four major market structures?

Which of the following market structures are retail stores and restaurants found in?