A1. Match the definitions on the right to the words on the left.

No. 1 has been done as an example

1 governed 4 a short journey undertaken in order to deliver or collect

something, often on someone else's behalf.
2 contend 6 (of an event, situation, or condition) not occurring very
often.
3 at will 10 a train of freight cars.
4 errand(s) 12 buy or obtain (an object or asset) for oneself.
5 barrier(s) 8 believe in and follow the practices of.
6 rare 1 conducted the policy, actions, and affairs of (a state,
organization, or people).
7 impediment(s) 9 a method or way of doing something
8 adhere 11 the business or service of acting as a broker (a person
who buys and sells goods or assets for others).
9 means 3 at whatever time or in whatever way one pleases.
10 freight 13 demanding (an amount) as a price fromat someone for a
service rendered or goods supplied.
11 brokerage(s) 5 something immaterial that impedes or separates; obstacle
12 acquire 7 a hindrance or obstruction in doing something.
13 charging 2 struggle to surmount (a difficulty or danger).

A2. Match the definitions on the right to the words on the left.

1 flaw(s) 5 gave support, confidence, or hope to (someone).

2 drawback(s) 9 furnish with something that grows or stimulates growth
or development
3 relieve 7 become or make larger or more extensive.
4 transformed 11 (especially of food, money, or some other resource)
insufficient for the demand.
5 encouraged 8 directed toward a particular end or object.
6 excel 12 come between so as to prevent or alter a result or course
of events.
7 expand(s) 3 release (someone) from duty by taking their place.
8 channeled 13 a policy or attitude of letting things take their own
course, without interfering.
9 seed 10 offering goods or services at a lower price than (a
competitor).
10 undercutting 4 made a thorough or dramatic change in the form,
appearance, or character of.
11 scarce 1 a mark, fault, or other imperfection that mars a substance
or object.
12 intervene 6 extremely good; outstanding.
13 laissez-faire 2 a feature that renders something less acceptable; a
disadvantage or problem.
B. Answer the following questions based on the above text:

1. What is a free market economy?

a free market economy is one that is governed strictly by the forces of supply and
demand with no governmental influence
2. What are the examples of economic exchange?
Buying vegetables for a set price from a grower at a farm stand is one example of
economic exchange. Paying someone an hourly wage to run errands for you is
another example of an exchange
3. What prevent a truly free market exchange?
Sales taxes, tariffs on imports and exports, and legal prohibitions—such as the age
restriction on liquor consumption
4. Why is capitalist economy the freest?
because ownership is in the hands of individuals rather than the state.
5. What are Socialist economies?
Socialist economies, where the government may own some but not all the means of
production (such as the nation's freight and passenger rail lines), can also be
considered market economies as long as market consumption is not heavily regulated
6. Why are not Communist governments considered market economies?
Because the government dictates supply and demand.
7. What is meant by private ownership of resources?
Individuals, not the government, own or control the means of production, distribution,
and exchange of goods, as well as the labor supply
8. What is the role of banks and brokerages?
banks and brokerages exist in order to supply individuals with the means to acquire
goods and services
9. Why is a market-based economy preferred?
Competition leads to innovation, profit is encouraged, bigger is often better, there are
no guarantees
10. What is meant by competition leads to innovation?
As producers work to satisfy consumer demand, they also look for ways to gain an
advantage over their competitors
11. Where does profit go to?
Some of those profits benefit individuals or investors, while other capital is channeled
back into the business to seed future growth
12. Why is it said that bigger is often better?
In economies of scale, large companies with easy access to large pools of capital and
labor often enjoy an advantage over small producers that don't have the resources to
compete
13. What is the purpose of government’s intervention?
There are no guarantees, its citizens have no promise of financial success in a market
economy.