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Unit 1
Directions:
Directions:
DDiirreeccttiioonnss::
Each of the passages below is followed by some questions. For each question there
are four answers marked [A], [B], [C] and [D]. Read the passages carefully and
choose the best answer to each of the questions. Then mark your answer on
ANSWER SHEET 1
ANSWER SHEET 1
AANNSSWWEERR SSHHEEEETT 11 by blackening the corresponding letter in the brackets with a
pencil.(40points)
Text1
Text1
TTeexxtt11
The American economic system is organized around a basically
private-enterprise, market-oriented economy in which consumers largely determine
what shall be produced by spending their money in the marketplace for those goods
and services that they want most. Private businessmen, striving to make profits,
produce these goods and services in competition with other businessmen; and the
profit motive, operating under competitive pressures, largely determines how these
goods and services are produced. Thus, in the American economic system it is the
demand of individual consumers, coupled with the desire of businessmen to maximize
profits and the desire of individuals to maximize their incomes, that together
determinewhatshallbeproducedandhowresourcesareusedtoproduceit.
An important factor in a market-oriented economy is the mechanism by which
consumer demands can be expressed and responded to by producers. In theAmerican
economy,this mechanismis provided by a pricesystem, a process in which prices rise
and fall in response to relative demands of consumers and supplies offered by
seller-producers. If the product is in short supply relative to the demand, the price will
be bid up and some consumers will be eliminated from the market. If, on the other
hand, producing more of a commodity results in reducing its cost, this wi
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