Question

Which of the following statements accurately explains how an element of the
free enterprise system has impacted the Texas economy? (1 point)

Limited Government: When railroads created a monopoly and charged farmers
O unreasonable shipping rates, the Texas government created the Railroad
Commission to regulate the industry and ensure fair rates.

Profit Margin: Boom-and-bust cycles have impacted all industries in Texas
O except the oil and gas industry, which has consistently made profits due to high
demand since the Spindletop oil strike in 1901.

Supply and Demand: After the Civil War, a surplus of cattle and high demand for
beef in the North increased prices and led to a boom in the Texas cattle industry.

Global Competition: Economic profits in Texas decreased significantly after the
O North American Free Trade Agreement gave Mexico an unfair advantage over
Texas businesses near the border.

Answer 1

The Supply and Demand statement is correct.

After the Civil War Texas had huge herds of cattle and rising demand for beef in the North (plus growing rail access), which raised prices for Texas ranchers and produced the late-19th-century cattle boom.

(Option 1 describes a real event—the Railroad Commission was created to curb railroad abuses—but it isn’t an example of “limited government.” Options 2 and 4 are inaccurate.)