REVIEW

How did the enactment of NAFTA in 1994 affect the Texas economy?

• exports from Texas to Mexico more than doubled

• Texas saw a decrease in agricultural exports

• Texas experienced a significant rise in unemployment

• Texas became less reliant on trade with Mexico

What is the motivational force behind capitalism and in free enterprise?

• PROFIT

• Government Regulation

• Consumer Demand

• Labor Supply

A city in Texas is planning to invest in its tourism infrastructure to attract more international visitors. They are considering building new hotels, upgrading transportation, and promoting cultural events. What is the most likely positive outcome of this investment on the local economy?

• Increase in job opportunities and local business revenue.

• Decrease in local business revenue due to increased competition.

• Reduction in tourism-related jobs as businesses close.

• Increase in property taxes without any economic benefit.

A Texas-based tech startup has developed a new app that is gaining popularity. The startup has to decide whether to reinvest profits into expanding their workforce or to distribute profits as dividends to shareholders. What is the best economic rationale for the startup to reinvest its profits?

• To enhance long-term growth and competitiveness in the market.

• To provide immediate returns to shareholders.

• To reduce operational costs in the short term.

• To increase the startup's market share quickly.

A Texas farmer grows cotton and is considering whether to sell his products locally or export them to international markets. Recent changes in international trade agreements have reduced tariffs on U.S. cotton exports. What is the likely impact of this change on the farmer's decision-making?

• He will likely focus on exporting cotton to take advantage of the reduced tariffs.

• He will continue to sell locally as it is more profitable.

• He will stop growing cotton altogether due to market uncertainty.

• He will diversify into other crops instead of cotton.

A tech company based in Texas is debating whether to manufacture its new smartphone locally or outsource production to a factory in another country where labor costs are lower. They must consider the impact on production costs, delivery times, and market demand. Which of the following factors is most likely to influence the company's final decision?

• The cost of labor and materials in both locations.

• The brand reputation of the company.

• The color options available for the smartphone.

• The marketing strategy for the product.

A local farmer in Texas is experiencing a bumper crop of tomatoes this season. As a result, the supply of tomatoes in the market has significantly increased. Which of the following is the most likely effect on the price of tomatoes in the local market?

• The price of tomatoes will increase due to higher demand.

• The price of tomatoes will remain the same regardless of supply changes.

• The price of tomatoes will decrease due to increased supply.

• The price of tomatoes will fluctuate unpredictably.

Roy Cullen contributed to Texas' development by

• donating some of his oil fortune to the University of Houston

• investing in local agriculture

• building new highways across the state

• establishing a tech startup in Austin

A Texas oil company faces increased competition from renewable energy sources globally. As a result, it must decide how to adjust its business strategy. Which of the following strategies would best position the company to remain competitive in the changing market?

• Diversify investments into renewable energy technologies.

• Increase oil production to lower prices.

• Focus solely on traditional fossil fuels.

• Invest in marketing to promote oil products.

What type of economy allows people to own and run their own businesses?

• Planned economy

• Free enterprise system

• Socialist economy

• Mixed economy