Chapter 3 Review Free Enterprise Economics. 1 In a free enterprise economy, how is the following...
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Transcript of Chapter 3 Review Free Enterprise Economics. 1 In a free enterprise economy, how is the following...
![Page 1: Chapter 3 Review Free Enterprise Economics. 1 In a free enterprise economy, how is the following question answered. What goods will be produced? Producers.](https://reader035.fdocuments.net/reader035/viewer/2022062217/5697bfd31a28abf838cac30e/html5/thumbnails/1.jpg)
Chapter 3 ReviewFree Enterprise
Economics
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1In a free enterprise economy,
how is the following question answered. What goods will be produced?
Producers produce what consumer want to buy.
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2How will goods be produced
in a free enterprise economy?By individuals who own and
manage businesses.
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3For whom will goods be
produced in a free enterprise economy?
The consumers who are willing to buy them.
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4Under the right of ______ the
government can take ownership of land without the consent of the owner.
Eminent domain
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5How does competition
among producers benefit consumers?
Lower pricesBetter variety of productsProduct improvements
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6List an economic incentive
the federal government offers to citizens?
Tax breaks for home ownership, student loans
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7The amount of money left
over after all the costs of production have been paid.
Profit
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8The amount of money by
which total costs exceeds total revenue.
Loss
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9Any good that is owned by
an individual or business. Private property
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10The principles of conduct,
such as right and wrong, morality, and immorality, good and bad.
Ethics
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11List an argument for why free
enterprise is an ethical economic system.
People can chooseVariety of productsRewards depend on performanceFreedoms
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12List a reason against the free
enterprise economic system.Income inequalityToo much power to large
corporations
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13A person who has a special talent
for searching out and taking advantage of new business opportunities, as well as developing new products and new ways of doing things.
Entrepreneur
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14An agreement between two
or more people to do something.
Contract
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15A public good that individuals
can be physically prohibited from consuming.
Excludable public good
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16Give an example of a
nonexcludable public good.National defense
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17A person who receives the
benefits of a good without paying for it.
Free rider
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18An adverse side effect of an
act that is felt by others.Negative externality.
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19Any good that is owned by
the government.Public property
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20Give an example of a
negative externality. Neighbors who fail to maintain
their propertyLoud music Pollution
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21A beneficial side effect of an
action that is felt by others. Positive externality.
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22The price of a good times the
number of units of the good sold equals________.
Total revenue
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23Give an example of an
excludable public good. Lecture at a college – if you
aren’t accepted or don’t pay tuition
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24A(n) _______ is something
that encourages or motivates a person toward an action.
Incentive
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25A public good that individuals
cannot be physical prohibited from consuming.
nonexcludable public good
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Final Question
List 5 important features of free enterprise.
Private propertyChoiceVoluntary exchangeCompetitionEconomic incentives