Unit 2-2 Quiz PRACTICE: American Free Enterprise

In the United States, you may_______________.

• start your own business to meet a need
• decide what fees to charge for a service or product
• own and run any business as long as the laws are obeyed
• all of the answers are correct

What is economic freedom?

• people making their own economic decisions

• using factors of production wisely

• equal pay for equal work

• having better goods and services

What is competition?

• people making their own economic decisions

• using factors of production wisely

• struggle among sellers to attract consumers

• having better goods and services

Private property rights mean that

• people make their own economic decisions

• people may own and control their possessions as they wish

• businesses may choose what products to sell and what to charge for them

• there are better goods and services

What is a consumer?

• a person who purchases goods and services

• a person who sells goods and services

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

• Socialism
• Free Enterprise
• Product
• Marketing

How does the government operate in the American Free Enterprise System?

• It takes a "hands off' approach

• It tells businesses what to sell and at what price

• it interferes only when it is profitable

• It establishes regulations and laws to protect competition and to keep consumers safe

How does competition benefit consumers?

• unpopular products stay on store shelves

• more expensive, poor quality products dominate the market

• consumers have fewer choices than ever

• newer and cheaper products come to market, giving consumers many choices

The sparkplug of the economy is considered to be

• the government

• the consumer

• the entrepreneur

• the corporations

Consumers in a Free Enterprise System usually tell producers ______ to produce by the choices they make in the marketplace.

• what

• how

• when

• where