According to the Law of Supply

when prices rise producers produce more

What two sectors make up the circular flow model of a market economy?

the household and business (firms) sectors

Which of the following is a responsibility of a small business owner?

must engage in fair business practices

In the United States economy, one purpose of government is to

make regulations to allow business to compete fairly

How does new technology affect economic growth?

creates growth by increasing the productivity of labor

In the U.S. free enterprise system the role of government can be described as

provides vital services and some necessary regulations

Which of the following is NOT a characteristic of the free enterprise system?

government decides what businesses will produce

The 3 economic questions society must answer are what to produce, who consumes the goods and

how should goods and services be produced

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2nd six weeks test

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Questions 19

Answers

1
Government regulations restricting businesses from operating in residential areas are
construction laws
building use laws
historic preservation laws
zoning laws
2
The three terms to describe the U.S. economic system are free enterprise, capitalism and
competition
economic freedom
government regulated
free market
3
According to the Law of Supply
rising prices have no effect on supply
when prices rise producers produce less
when prices rise producers produce more
high prices influence producers to use few raw materials
4
In a free enterprise system, the basic questions are answered by
Presidential policies
Congress
the marketplace
the government
5
increased productivity in business contributes to
lower wages
a reduced supply of goods
decreased risk for business
economic growth
6
What two sectors make up the circular flow model of a market economy?
the labor and entrepreneur sectors
the household sector and the government
the household and business (firms) sectors
the business sector and the government
7
Which of the following is a responsibility of a small business owner?
donating to community charities
employing teenagers
must engage in fair business practices
advertising in local papers
8
According to the Law of Demand
when prices rise demand falls
when prices rise demand remain the same
when prices fall demand remains the same
when prices fall demand increases
9
Which economic philosopher supported government spending and taxing to stimulate the economy?
Friedrich Hayek
Adam Smith
Milton Friedman
John Maynard Keynes
10
How does trade relate to growth?
opens up markets worldwide
reduced availability of products
trade has little impact on growth
reduces gobalization
11
Situation where the price has reached a level where quantity supplied equals quantity demanded
surplus
shortage
price ceiling
equilibrium
12
When the price of Good A increases and consumer buy more of Good B, what is this called?
advertising effect
substitution effect
income effect
equilibrium effect
13
In the United States economy, one purpose of government is to
make regulations to allow business to compete fairly
decide what to produce
set prices
hire employees
14
How does new technology affect economic growth?
creates growth by increasing the productivity of labor
restricts growth because it's expensive
creates safe working environments
restricts growth by making workers learn a new job
15
According to the law of supply and demand, increasing supply and decreasing demand results in
lower prices
higher interest rates
lower taxes
higher taxes
16
In the U.S. free enterprise system the role of government can be described as
provides most public services and heavily regulates business
provides no services and no regulations
provides a few services and offers guidelines to businesses
provides vital services and some necessary regulations
17
Which of the following is NOT a characteristic of the free enterprise system?
variety of goods
creation of wealth
individual freedom of producers and consumers
government decides what businesses will produce
18
The 3 economic questions society must answer are what to produce, who consumes the goods and
how should goods and services be produced
who is going to pay for the goods and services
why should we produce the goods and services
19
Which of the following is an example of an oligopoly?
a farmer's market
American automobile industry
US Postal Service
Foot Locker

2nd six weeks test Flashcards | StudBud