Answers26-27 Ignite Economics-KY-EconomicsCompetition and Free Enterprise

Competition and Free Enterprise Answers

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Why does the US government create regulatory agencies? Check all that apply.to create fair competition between producersto limit the knowledge of certain consumersto allow producers to have greater freedomto protect consumers’ health and safetyto prevent the formation of monopolies

A
to create fair competition between producers
B
to limit the knowledge of certain consumers
C
to allow producers to have greater freedom
D
to protect consumers’ health and safety
E
to prevent the formation of monopolies
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What is one downside for consumers to competition in a free-enterprise system?

A
Consumers must be knowledgeable.
B
Consumers have limited choices.
C
The quality of goods often suffers.
D
The price of goods often decreases.
3

Innovation allows producers to

A
create goods that draw consumer attention.
B
follow restrictions that the government imposes.
C
avoid competing with similar businesses.
D
offer warranties for all of their products.
4

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

A
A restaurant just opened down the block from a movie theater, and the restaurant owner hopes to attract diners after each movie.
B
A small CD store slashed its prices to attract customers from a larger store that sells CDs and DVDs.
C
A store that sells sneakers has offered a special deal to customers from a nearby health club.
D
A federal agency has been created to monitor the production and distribution of food supplements.
5

What kind of economy uses a free-enterprise system?

A
a closed economy
B
a command economy
C
a market economy
D
a traditional economy
6

Competition happens when two or more businesses

A
complement one another.
B
fight for the same benefit or gain.
C
work together to achieve success.
D
follow regulations from an agency.
7

A frozen foods company changes an ingredient to meet a new government standard. This is an example of

A
following a federal regulation.
B
lowering prices for customers.
C
reducing the risk for consumers.
D
creating a new product.

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