AnswersAISD Economics 2026-27Resources and Scarcity

Competition and Free Enterprise Answers

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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.
2
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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.
3

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.
4

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

A
following a federal regulation.
B
lowering prices for customers.
C
reducing the risk for consumers.
D
creating a new or better product.
5

[BLANK]

A
advance
B
support
C
limit
D
terminate
6

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
7

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.
8

What are aspects of a free-enterprise system? Check all that apply.

A
Private ownership of property is severely restricted.
B
The government has a lot of power and influence.
C
There are few limits on the use of private property.
D
Consumers make all of their economic choices.
E
Producers make all of their economic choices.
9

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.
10

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

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