1. A market-directed economy:

a. ensures that voters and politicians agree what problem has to be solved first

b. makes efficient use of resources

c. concentrates solely on profit generation

d. spreads income evenly among the population

2. Michael Soles--owner of Soles Shoe Store--recently discovered that shoe stores in his trading area have an average markup of 40%. Upon investigation, Michael found that his average markup is $15 on shoes that he sells for $45. This suggests that:

a. Michael has higher-than-average costs

b. Michael is pricing his products higher than his competitors are

c. Michael is taking a smaller average markup than his competitors are

d. Michael's markups in dollar amounts are about the same as his competitors.