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

Competition and Free Enterprise Answers

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1
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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.
2
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Which group creates regulations in mixed-market economies?

A
consumers
B
governments
C
monopolies
D
producers
3

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?

C
Carol and the local officials can set the prices of her cakes.
C
Carol can use the money from her business to achieve her goal.
C
Carol can participate in a barter system for goods to goods.
C
Carol can meet a regulation for the number of local services.
4

In free-enterprise systems around the world, there are

A
no restrictions on business ownership or business activity.
B
some restrictions on business activity but not on business ownership.
C
some restrictions on business ownership but not on business activity.
D
some restrictions on business ownership and business activity.
5

What are aspects of a free-enterprise system? Check all that apply.Private ownership of property is severely restricted.The government has a lot of power and influence.There are few limits on the use of private property.Consumers make all of their economic choices.Producers make all of their economic choices.

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.
6

advancesupportlimitterminate

A
advance
B
support
C
limit
D
terminate
7

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

Question illustration
p
producer innovation in a market economy.
f
freedom in the free-enterprise system.
r
regulation by a government agency.
c
competition between businesses.
8

Innovation allows producers to

c
create goods that draw consumer attention.
f
follow restrictions that the government imposes.
a
avoid competing with similar businesses.
o
offer warranties for all of their products.
9

What is one downside for consumers to competition in a free-enterprise system?

C
Consumers must be knowledgeable.
C
Consumers have limited choices.
T
The quality of goods often suffers.
T
The price of goods often decreases.
10

Which is an example of regulation in the automobile industry?

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

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