AnswersEA Academy Civics 9The Economy of the US

The Economy of the US Answers

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1
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Why was The Wealth of Nations an important publication?

A
It outlined Adam Smith’s theories that formed the basis of capitalism.
B
It called for economic and political independence for the American colonies.
C
It required the US government to pay for private property taken for public use.
D
It outlawed companies from interfering with trade or forming monopolies.
2
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A mountain community has difficulty getting reliable electricity. High winds and fallen trees often result in power failures due to downed electrical transmission lines. In response, the community decides to invest in wind turbines to generate electricity locally rather than rely on the regional power company.

A
civil rights
B
decentralization
C
antitrust laws
D
price setting
3

Which scenario best illustrates the dangers of a monopoly for consumers?

A
Jasmine is looking for a new sweater. She wants one that is a dusty blue to go with a new pair of blue jeans. She finds nice sweaters in three stores, but only one store has the shade of blue she wants.
B
Marcus needs a new pair of running shoes. He only likes one brand and one style of shoe in that brand. He is upset when he cannot find the shoe he wants in his size in any store in town or online.
C
Ana uses one brand of peanut butter because it is the brand her grandmother uses. She is shocked when she discovers that a company has bought that brand and is discontinuing it in favor of their own.
D
Lek has a rare medical condition. Company X has developed a pill that is an effective treatment. It is the only company that can make the medicine. The company charges an extremely high price for each pill.
4

Read the excerpt from the Declaration of Independence:"That these United Colonies are, and of Right ought to be Free and Independent States . . . and that as Free and Independent States, they have full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do.” –The Declaration of Independence, 1776

A
levy war
B
conclude peace
C
contract alliances
D
establish commerce
5

Amira owns a small restaurant in an area of town that has a mixture of businesses and private homes. Like other neighborhood businesses, she’s having trouble attracting customers because of limited places to park. The city council has been unresponsive to complaints by business owners in the area. City council elections are next month, and Amira is anxious to vote for a new council member.

A
The candidate is not affiliated with either of the country’s main political parties.
B
The candidate pledges to protect the economic interests of small-business owners.
C
The candidate lives in a neighborhood that includes small businesses and homes.
D
The candidate is the first choice of the current members of the city council.
6

What role does the Federal Trade Commission (FTC) play in the US economy?

A
It works to prevent monopolies and unfair business practices.
B
It helps establish market prices for all US goods and services.
C
It takes the place of the Supreme Court in cases involving trade.
D
It increases competition by encouraging companies to merge.
7

Which statement would Adam Smith most likely agree with?

A
Private ownership of property creates a society based on unequal access to wealth.
B
The government has a responsibility to create and maintain a successful economy.
C
Competition harms buyers and sellers in a market economy.
D
Capitalism and a free-market economy are not compatible.
8

Which scenario is addressed by the Fifth Amendment to the US Constitution?

A
The government takes land from private owners to build a series of cell-phone towers to improve cell reception. The owners are paid for their land.
B
A land developer buys three farms along a stretch of highway to create a planned community with houses and stores in a rural area outside a major city.
C
A group of homeowners sell their property along an interstate highway to a hotel company that wants to build a new hotel near the highway’s off-ramp.
D
A group of investors buy a small, nearly deserted town in the mountains with the idea of creating an amusement park, golf course, and luxury hotel.
9

How did Ida M. Tarbell contribute to the establishment of antitrust laws in the early 1900s?

A
She condemned the use of the Sherman Act as antibusiness.
B
She helped establish the Federal Trade Commission (FTC).
C
She wrote a series of articles about the Standard Oil Company.
D
She argued against the need to limit monopolistic practices.
10

Which scenario illustrates unfair business practices?

A
A clothing boutique puts on an annual summer sale. To attract customers, it places a large “SALE” sign in its window and hangs a banner across the front of the store announcing the sale. During the week of the sale, fewer customers are seen at the two other clothing stores that are on the same block.
B
Farm Z ships a thousand boxes of produce each week during the summer. The company promised a trucking company that it will only ship goods using their trucks if the trucking company cuts its shipping rate in half. The trucking company agrees and then raises shipping prices for the other farms in the area.
C
A small company that manufactures custom dog collars and leashes decides to merge with a small company that makes unique dog toys and bedding. The two companies decide to use the name of the collar and leash company because it has a larger following online and a better website.
D
Company E manufactures environmentally safe cleaning products. It has evidence that one of its competitors is marketing its products as “Earth friendly,” even though the products contain damaging chemicals. Company E files a complaint with the appropriate government agency.

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