Podcast
Questions and Answers
What is another name for capitalism?
What is another name for capitalism?
Three features of a free contract economy are open opportunity, legal equality, and __________.
Three features of a free contract economy are open opportunity, legal equality, and __________.
the right to enter into agreements of one's choice
What is the driving force in a free enterprise system?
What is the driving force in a free enterprise system?
Profit motive
Producers, seeking __________, move their resources into the most productive areas.
Producers, seeking __________, move their resources into the most productive areas.
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The United States has a __________ economy, mixing government involvement with market forces.
The United States has a __________ economy, mixing government involvement with market forces.
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One role for the government is to provide __________, such as national defense.
One role for the government is to provide __________, such as national defense.
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Without a strong __________ in place, modern economies cannot function.
Without a strong __________ in place, modern economies cannot function.
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The government addresses problems created by a __________, such as pollution from a factory.
The government addresses problems created by a __________, such as pollution from a factory.
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What type of externality is associated with better health through vaccinations?
What type of externality is associated with better health through vaccinations?
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The government also makes direct __________ in the form of social security and unemployment compensation.
The government also makes direct __________ in the form of social security and unemployment compensation.
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What is open opportunity?
What is open opportunity?
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What does legal equality mean?
What does legal equality mean?
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What is free contract?
What is free contract?
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What is the difference in open opportunity?
What is the difference in open opportunity?
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What is the difference in legal equality?
What is the difference in legal equality?
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What is the difference in free contract?
What is the difference in free contract?
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What is the role of the profit motive in the American free enterprise system?
What is the role of the profit motive in the American free enterprise system?
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What describes the profit motive?
What describes the profit motive?
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How is a free enterprise system linked to economic freedom?
How is a free enterprise system linked to economic freedom?
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Give examples of three different economic freedoms in a free enterprise system.
Give examples of three different economic freedoms in a free enterprise system.
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What force acts as a balance to the profit motive in the American free enterprise system?
What force acts as a balance to the profit motive in the American free enterprise system?
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Explain how a free enterprise system works.
Explain how a free enterprise system works.
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Study Notes
Free Enterprise System
- Known as capitalism, relies on private ownership of productive resources.
Free Contract
- Characterized by open opportunity, legal equality, and the right to personal agreements.
Profit Motive
- Acts as a driving force in a free enterprise system, motivating entrepreneurs to engage in market activities.
Profit
- Producers aim for profit by shifting resources into productive areas, influenced by consumer choices.
Modified Free Enterprise Economy
- A blend of government involvement and market forces, addressing social issues capitalism alone cannot solve.
Public Goods
- Government's role includes providing essential services like national defense.
Infrastructure
- A strong infrastructure is essential for modern economies to operate effectively.
Negative Externality
- Problems like pollution are managed by the government to protect affected communities.
Positive Externality and Subsidy
- Government supports beneficial outcomes, such as public health through subsidies for vaccinations.
Public Transfer Payments
- Direct financial assistance from the government, including social security and unemployment benefits.
Open Opportunity
- Everyone has the ability to participate in the market through free choice.
Legal Equality
- Ensures that every individual has the same economic rights under the law.
Free Contract
- Individuals have the autonomy to enter into legal agreements of their choice.
Economic Freedom in Free Enterprise
- Includes the freedom to buy, sell, and own property of choice, allowing diverse market participation.
Competition
- Balances profit motives by driving down prices, ensuring fair pricing for consumers and profitability for producers.
Functioning of a Free Enterprise System
- Central to a capitalist economy, it thrives on open opportunity, reflecting diverse interests and fostering efficiency and productivity among individuals.
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Description
This quiz explores key concepts of the free enterprise system, including capitalism, profit motivation, and the role of government in a modified economy. You'll learn about public goods, externalities, and the importance of infrastructure in supporting economic activities.
