Answers26-27 Ignite Economics-KY-EconomicsIntroduction to Economics

Competition and Free Enterprise Answers

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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?

A
Carol and the local officials can set the prices of her cakes.
B
Carol can use the money from her business to achieve her goal.
C
Carol can participate in a barter system for goods to goods.
D
Carol can meet a regulation for the number of local services.
3
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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

In a free-enterprise system, consumers decide

A
how to set prices.
B
which goods to export.
C
which services to buy.
D
how to use materials.
5

Which is an example of regulation in the automobile industry?

A
the creation of fuel-efficiency standards for cars
B
the installation of satellite radio systems in some cars
C
the usage of multiple-year warranties to cover repairs
D
the production of hybrid models that conserve gasoline
6

Jose realized that the only dining options in his community are at local restaurants where the wait time is often excessive. He decides to purchase and operate his own food truck in the area. Which indicates that Jose is exercising free enterprise?

A
Jose allows the other dining establishments to set his menu.
B
Jose shares ownership with the local government which will also determine its location.
C
Jose can control how he conducts his food truck business.
D
Jose parks his food truck five miles from the closest eat-in restaurant to avoid competition.
7

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

Question illustration
A
producer innovation in a market economy.
B
freedom in the free-enterprise system.
C
regulation by a government agency.
D
competition between businesses.
8

Why does the US government create regulatory agencies? Check all that apply.

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
9

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.
10

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

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