Competition and Free Enterprise

Question 1

Innovation allows producers to

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create goods that draw consumer attention.

Question 2

Carol has decided to advertise her custom-baked cakes in the local paper in the hopes that her sales could go towards purchasing a home.Which incentive of the free enterprise system would help Carol?

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Carol can use the money from her business to achieve her goal.

Question 3

In a competitive market, a furniture company decides to use cheaper materials to decrease production costs and pass on the savings. This is an example of

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lowering prices for customers.

Question 4

Which is an example of regulation in the automobile industry?

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the creation of fuel-efficiency standards for cars

Question 5

In a free-enterprise system, producers decide

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how much to charge.

Question 6

Which situation is the best example of regulation in an economic system?

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A state agency has been created to monitor the production and distribution of sports drinks.

Question 7

In a free-enterprise system, consumers decide

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which services to buy.

Question 8

Competition happens when two or more businesses

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fight for the same benefit or gain.

Question 9

Which situation is the best example of competition in an economic system?

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A small CD store slashed its prices to attract customers from a larger store that sells CDs and DVDs.

Question 10

This photo shows a label that appears on food products in the United States.This label is an example of

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regulation by a government agency.

Competition and Free Enterprise Answers

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