3.2&3 Profit, Loss and Ethics in Free Enterprise Notes

Multiple Choice

Why is it important for businesses to understand the difference between profit and loss?

• To avoid paying taxes

• To make better financial decisions

• To increase the number of employees

• To reduce product quality

Open Ended

How do profits and losses act as signals in a free enterprise economy?

Multiple Select

Which of the following are characteristics that a free enterprise system requires to be ethical?

• Individuals can choose their occupations

• Goods and services are only for the majority

• Rewards depend on performance

• There are numerous freedoms

Open Ended

Do you have any questions or would you like to know more about economic rights and responsibilities in a free enterprise economy?