Answer the following questions.

1)Match the terms with the definitions.

monopoly

natural monopoly

startup

oligopoly

cartel

natural monopoly

startup

oligopoly

competition

_______a component of a free enterprise system that createsincentive for business owners to provide products and services

_____rivals that deal in similar products or services

______complete control over a product or market with little orno competition

_______an industry with few competitors and high entry barriers

______a situation in which competitors work together toartificially set prices

______an international monopoly

_____creates a large market with many options for theconsumers

______a competitive advantage not legally or purposefullycreated

_____competitive advantage created or protected by law

______a new company started by an entrepreneur

2)Select THREE facts about the Sherman Antitrust Act.

It was signed into law by President Harrison in 1890

It established that the government had a duty and right to regulate the economy.

The Act split up the Standard Oil Company.

It outlawed all railroad and utility monopolies.

It only applied to interstate laws and was weak and easily avoidable.

It was signed into law during the Grant administration.

3)Select TWO facts about the Clayton Antitrust Act.

The Federal Trade Commission (FTC) was created by the Act.

It broke up some harmful monopolies while leaving others alone.

The Act stopped monopolies formed to build weapons during World War I.

President Taft signed the Act into law.

4)Select the best answer.

All Americans are allowed to pursue ___ as far as their creativity, talent, and hard work allow.

profit

laws

monopolies

taxes

5)Select the best answer.

When there is a lack of ___, entrepreneurs and companies may try to take advantageof consumers.

products

competition

private property

services

enterprise

6)Select the best answer.

Which answer is an example of competitors colluding to artificially set prices?

A restaurant owner borrows a refrigerator from a competitor.

Four antique stores in the Old Towne district pitch in for a television ad.

Three pet stores have a sale on the same weekend.

Food vendors at a state fair agree to set similar prices.

7)Select the best answer.

___ allows the greatest freedom and security for consumers.

A cartel

A monopoly

Private property

Perfect competition

The Supreme Court

8)Select the best answer.

Which of these does competition ensure in a free enterprise economy?

absurdly high prices

reasonable prices and options for different goods and services

guaranteed access to goods and services

limited options for goods and services

a complete lack of government involvement

9)Match the companies with the types of monopolies.

cartel

ownership monopoly

natural monopoly

legal monopoly

_____American Telephone and Telegraph (AT&T)

_____OPEC

______U.S. Post Office

______Solomon's Mines, home of the world's onlypurple diamonds

10)Why is the pursuit of profit legitimate?

The pursuit of profit is legitimate because some people handle wealth better than others.

The pursuit of profit is legitimate because the government needs revenue sources to tax.

The pursuit of profit is legitimate because everyone has a right to earn a living, and entrepreneurs and companies take on risk when they provide goods and services.

The pursuit of profit is not legitimate

11) Select TWO ways that technology increases the likelihood of profit and economic growth.

Technology increases the productivity of workers. The more a worker can produce, the more profit can potentially be earned as a result.

Technology spurs economic growth by helping workers find new, more efficient ways to produce.

Technology makes everything more complex, thus providing opportunity for tech companies to earn more profit.

Technology encourages the diversification of industries, leading to greater profit.