Vocabulary
________ is the lack of resources to meet people's wants or needs.
scarcity
What type of economic system does the United States have?
A. traditional
B. free market
C. command
D. wants and needs
B. free market
A small, family-owned bakery is an example of a
A. sole proprietorship.
B. corporation.
C. conglomerate.
D. nonprofit organization.
A. sole proprietorship
In a corporation, stockholders
A. have little or no say in the business.
B. elect the board of directors.
C. make no profit if the business succeeds.
D. are responsible for their share of the debt if the business fails.
B. elect the board of directors.
The issue of scarcity of natural resources
A. demands government intervention.
B. results from governmental regulations of industry.
C. is not a problem in the United States.
D. helps determine their market value.
D. helps determine their market value
_____ is the money a business has left after it has paid its expenses.
profit
An essential factor of a free market economy is
A. profit.
B. government assistance.
C. competition.
D. availability of resources.
C. competition
What is a disadvantage unique to a partnership?
A. All profits of the business belong to the owners.
B. Personal property can be lost if the business fails.
C. More than one person provides capital.
D. Daily operations can suffer due to disagreements
D. Daily operations can suffer due to disagreements
A corporation's board of directors does all of the following EXCEPT
A. set the corporation's policies.
B. decide what dividends to pay.
C. appoint corporate officers.
D. manage daily business operations.
D. manage daily business operations.
Capital is
A. land and other natural resources.
B. money used to pay salaries.
C. manufactured goods used to make other goods.
D. all money coming into a business.
C. manufactured goods used to make other goods.
_____ is a small business owned by one person
sole proprietorship
The law of supply states that
A. businesses will provide more products when they can sell them at higher prices.
B. businesses will provide fewer products when they can sell them at higher prices.
C. consumers will purchase fewer products when they must buy them at higher prices.
D. consumers will purchase fewer products when they can buy them at lower prices.
A. businesses will provide more products when they can sell them at higher prices.
Some goods can be produced more efficiently by larger companies. Such a situation is called
A. a trust.
B. a monopoly.
C. an economy of scale.
D. free enterprise.
C. an economy of scale
Which of the following is not one of the four factors of production?
A. entrepreneurship
B. labor
C. natural resources
D. wealth
D. wealth
The duty of a corporation’s board of directors is to
A. keep the corporation from paying dividends.
B. pay off debts if the corporation fails.
C. represent stockholders in making decisions for the corporation.
D. oversee the day-to-day operations of the corporation.
C. represent stockholders in making decisions for the corporation.
______ are groups that provide goods and services without wanting to earn profits for stockholders.
All Americans enjoy the following economic freedoms EXCEPT the freedom to
A. buy and sell various goods.
B. fix prices.
C. own property.
D. earn a profit.
B. fix prices.
Corporations are owned by
A. partners
B. stockholders
C. managers
D. entrepreneurs
B. stockholders
An entrepreneur
A. is an important part of creating society’s wealth.
B. often puts up his or her own capital and labor to start a business.
C. assumes all the risks of a business to try to make a profit.
D. all of the above
D. all of the above
The free-enterprise system means that Americans
A. are able to run their businesses in the way they think is best.
B. are entitled to receive free products from stores.
C. do not have to pay taxes during their first year in business.
D. depend on the government to tell them how to operate.
A. are able to run their businesses in the way they think is best.
_____ is the manufactured goods used to make other goods or services
capital
If one large company owned all of the hotels in one country, that company would have a
A. nonprofit organization
B. monopoly
C. free market
d. dividend
B. monopoly
Last Christmas a popular toy was sold out all over town. When a local toy store received a shipment, it advertised the toy at twice its normal price. The store doubled the price due to
A. scarcity.
B. competition.
C. increased productivity.
D. a monopoly.
A. scarcity
You have purchased several shares in a company. During its second year of operation, the corporation builds up numerous debts, and ultimately fails. What will most likely happen?
A. You will be held at least partially responsible for the corporation's debts.
B. The most money you will lose is what you paid for your shares.
C. The officers of the company will be held responsible for the corporation's debts.
D. The corporate assets will be sold and reinvested in the company.
B. The most money you will lose is what you paid for your shares.
When a company has very high profits,
A. the government may intervene.
B. the market price of its stock usually increases.
C. it is known as a conglomerate.
D. it is charging too much for its goods and services.
B. the market price of its stock usually increases.