Understanding the U.S. Business System
True or False

1 .       Profits are the difference between a business's revenues and the taxes it has to pay. 


2 .       Physical resources are the physical and mental capabilities of people as they contribute to economic production. 


3 .       In a market economy, both buyers and sellers enjoy freedom of choice (within certain limits). 


4 .       In the output markets, firms buy resources from households, which then supply those resources. 


5 .       Supply is the willingness and ability of producers to offer a good or service for sale. 


6 .       A surplus results when the quantity demanded exceeds the quantity supplied. 


7 .       When there are a few large sellers in an industry and entry into the industry is difficult due to the large capital investment needed, an oligopoly exists. 


8 .       Socialism is an economic system in which the government owns and operates all factors of production. 


9 .       The philosophy of laissez-faire is the idea that government should pass laws to protect business in the economy. 


10 .       Advances in technology and the development of the factory system in the eighteenth century marked the beginning of the Entrepreneurial Era in business history. 


11 .       In a market economy, businesses decide what inputs to buy, what to make and in what quantities, and what prices to charge. 


12 .       Under Socialism, the government of a country owns and operates selected major industries while allowing smaller businesses in other industries to be privately owned.  


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