The Market Economy (Part 1) Question Preview (ID: 13140)


The Market Economy. TEACHERS: click here for quick copy question ID numbers.

The fixed costs of a business
a) include monthly rent
b) include advertising costs
c) do not include the cost of insurance
d) are based on the price of supplies

The forces of supply and demand determine
a) price in a market economy
b) none of these
c) whether government controls prices
d) price in a command economy

An entrepreneur should make a change if the marginal benefit of the change is
a) less than its marginal cost
b) greater than its marginal cost
c) less than a variable cost
d) at the equilibrium quantity

When there are many different suppliers producing similar goods,
a) there is not competition
b) buyers can shop around for the best deal
c) supply will never equal demand
d) there is a monopoly

In a command economy,
a) there is very little choice in what is available
b) all of these
c) the government determines what products and services are produced
d) people are not always able to obtain exactly what they want

An entrepreneur uses the concept of marginal benefit to
a) change a competitive market to a monopoly
b) increase demand for a product or service
c) decide whether a business change is desirable
d) change a fixed cost to a variable cost

The demand curve shows that the quantity consumed of a good or service
a) increases as price decreases
b) is not affected by price
c) decreases as price decreases
d) increases as price increases

In making business decisions, an entrepreneur should consider all of the following except
a) marginal benefits
b) marginal costs
c) opportunity costs
d) opportunity benefits

When figuring out the price to charge for a product or service, an entrepreneur should consider
a) the cost of materials
b) all of these
c) fixed costs
d) the cost of labor

In a market economy, individual choice
a) does not influence how items are produced
b) creates scarcity
c) has no effect on the production of goods or services
d) creates the market for a good or service

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