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1. A. An economic system is a nations system for allocating its resources among its citizens. Economic systems differ in terms of who owns or controls the four basic factors of production: labor, capital, entrepreneurs, and natural resources. In planned economies, the government all or most factors. In market economies, which are based on the principles of capitalism, individuals control the factors of production. Most countries today have mixed market economies that are dominated by one of these systems but include elements of the other. The process of privatization is an important means by which many of the world's planned economies are moving toward mixed market systems.
2. A. The most common forms of business ownership are the sole proprietorship, the partnership, the cooperative, and the regular corporation. Each form has several advantages and disadvantages. The form under which a business chooses to organize is crucial because it affects both long-term strategy and day-to-day decision making. In addition to advantages and disadvantages, entrepreneurs must consider their preferences and long-range requirements
3. B. The difference forms of competition advantage are critical to international business. With an absolute advantage, a country engages in international trade because it can produce a product more efficiently than any other nation. But more often, countries trade because they enjoy comparative advantages: They can produce some items more efficiently than they produce other items. The import-export balance including the balance of trade and the balance of payments, and exchange rate differences in nationa ...