Economics - Chapter 3 Quiz "American Free Enterprise"

An economic system in which businesses compete against one another free of government control

• Socialism
• Free Enterprise Capitalism
• Product
• Marketing

Which group lists the key principles of the free enterprise system?

• private property, taxation, public interest, patriotism
• profit motive, legal equality, consumer protection, public interest
• profit motive, private property, eminent domain, voluntary exchange
• profit motive, private property, competition, voluntary exchange, economic freedom

What is considered a negative effect of government regulation? 

• It protects consumers but harms the environment.
• It is expensive for businesses to follow all of the rules.
• It allows businesses to sell unsafe products.
• It does not protect the well-being of the public.

Pattern of economic growth and decline.

• stock market
• business cycle
• ebb and flow model
• roller coaster

An economist who focuses on microeconomics might study which of the following? 

• inflation
• household budgets
• national income averages
• unemployment

Which are the government's economic and social goals for promoting economic strength? 

• steady growth, high prices, and innovation, shortages
• full employment, economic  growth, stability, efficiency, security equity and freedom
• high employment, increased spending, low taxes
• low unemployment, low prices, and low taxes

What is one way the government might try to promote economic growth? 

• raise taxes
• increase spending
• reduce prices
• produce more goods

Someone who benefits without paying for a good or service.

• free loader
• free rider
• freedom fighter 
• free fallin'

The free market cannot provide for a nation's defense - this is an example of _________.

• Market Operations
• Market Failure
• Market Success
• Market Garden

Why are public goods examples of market failure? 

• They show that the free enterprise system does not work. 
• They show that competition in the free market is dangerous.
• They show that the free market cannot distribute certain resources efficiently.
• They show that the private sector is more efficient.