Question

2. Which economic system is based mostly on supply and demand with little government control?
o a) Command
o b) Traditional
o c) Market
o d) Mixed
3. What is one benefit of voluntary trade between countries?
o a) It increases trade barriers
o b) It benefits both buyers and sellers
o c) It makes products more expensive
o d) It decreases specialization
4. Which of the following is an example of a trade barrier?
o a) Specialization
o b) Tariff
o c) Entrepreneurship
o d) Human capital
5. What is the main role of entrepreneurship in an economy?
o a) To create natural resources
o b) To start new businesses and create jobs
o c) To prevent trade

Answer 1

2. c) Market — based on supply and demand with little government control.

3. b) It benefits both buyers and sellers — voluntary trade allows gains from specialization and exchange.

4. b) Tariff — a tax on imports that restricts or raises the cost of trade.

5. b) To start new businesses and create jobs — entrepreneurs organize resources, innovate, and generate employment.