3.1 and 3.2 Econ

A free enterprise system is another term for a 

• command economy
• traditional economy
• capitalist economy
• centrally planned economy

T or F: the U.S. is an example of a modified Free Enterprise System

• True
• False

The situation that allows everyone the same economic right under the law is known as

• open opportunity
• legal equality
• free contract
• profit motive

This economist advised both Richard Nixon and Ronald Reagan. 

• Milton Friedman
• Adam Smith
• Friedrich Hayek
• Paul Krugman

T or F: Since producers seek profit consumers will always pay more. 

• True
• False

In the circular flow model, what flows clockwise?

• resources
• goods and services
• money
• taxes

In a modified free enterprise system, what will you find in the center of the circular flow model?

• Government
• product market
• households
• factor market

According to the circular flow model, who are the suppliers in the factor market?

• households
• government
• businesses
• government and businesses

T or F: The government is only a supplier in the circular flow model of a modified free enterprise. 

• True
• False

A point inside the PPC is

• productively efficient
• unattainable
• allocatively efficient
• inefficient