1. as a factor of production, how is a capital created?
a. by adding land to entrepeneurship
b. by adding human labor to land
c. by removing land from services
d. by using labor to create services

3. if consumers start to believe they need a product, what is likely to happen?
a. the demand becomes less elastic
b. the demand becomes more elastic
c. the supply decreases
d. the price decreases

4. which of the follwoing commodities is a good?
a. a swimming lesson
b. a desk
c. house cleaning
d. dog walking

5. if your company uses a nonprice competition strategy, what should you focus on?
a. lowering prices
b. differentiation
c. creating direct competitors
d. the public sector.

6. a market economy is regulated by the interactions betweeen which two things?
a. good and services
b. producers and consumers
c. product-based and service-based businesses
d. public and private sectors.

7. if the demand for a product decreases, what is likely to happen?
a. the supply is likely to increase
b. the demand is likely to be inelastic
c. the price is likely to increase
d. the price is likely to decrease

8. a producer is someone who
a. makes a commodity available for sale or exchange
b. buys or trades in order to recieve a commodity
c. is in the market for a commodity
d. recieves a commodity from a business

9. which of the following is an indirect competitor for a company that makes chocolate chip cookies?
a. another company that makes chocolate chip cookies
b. a company that makes potato chips
c. a company that makes baking pans
d. a company that makes brownies

10. what is likely to happen if the price of a product goes up?
a. the supply is likely to increase
b. the supply is likely to decrease
c. the demand is likely to cause scarcity
d. the demand is likely to increase

11. what does scarity force people to do?
a. produce commodities
b. make choices
c. consume products
d. increase inflation

12. which f the following is a sign of a strong economy?
a. an increase in gdp
b. a shrinking economy
c. an increase in unemployment
d. a decrease in spending power

13. in capitalism, what does competition do for consumers?
a. it limits the number of choices consumers have
b. it prevents consumers from being entrepreneurs
c. it lets consumers create monopolies
d. it keeps prices fair for consumers

14. what is an increase in competition likely to do to the demand?
a. increase the demand
b. decrease the demand
c. make the demand less elastic
d. make the demand more elastic

15. if a planned economy, prices of commodities are controlled by
a. supply and demand
b. producers and consumers
c. the government
d. private enterprises