ECON: Ch. 3: Free Enterprise

Which of the following is the best example of a public good?

• highway system

• shopping mall

• country club

• movie theater

Workers’ compensation is an example of which of the following types of welfare?

• faith-based initiative

• cash transfer

• in-kind benefit

• None of these choices are correct

The US government actively takes measures to discourage

• negative externalities.

• free riders.

• competition.

• positive externalities.

Which of the following is a private organization that attempts to influence public officials to act or to vote in ways that will benefit the group’s members?

• market research group

• public policy group

• free enterprise group

• interest group

What is the lifespan of the legal protection provided by a patent?

• 20 years

• without limit

• 50 years

• 100 years

_____ refers to the force that encourages people and organizations to improve their material well-being.

• voluntary exchange

• profit motive

• open opportunity

• competition

Automakers are required to comply with public disclosure laws. What is one example of a requirement of these laws?

• Salespeople must be willing to sell cars to anyone who can afford them, regardless of gender, race, or ethnicity.

• Automakers must test all car models regularly for crashworthiness.

• Salespeople must provide information about their competitors’ cars, so customers can make informed decisions.

• Car dealers must prominently display a sticker with the fuel efficiency in the car window.

What is the most effective way for consumers to make their desires known to businesses?

• By protesting and boycotting products

• By the purchases they make

• By hiring lobbyists and joining consumer groups

• Through phone and mail surveys

Which of the following is the BEST example of a benefit provided by Social Security?

• Retirement income for the elderly

• Cash transfers to workers injured on the job

• Compensation for all who lose jobs

• Medical care for the indigent

What BEST describes the role of government in a free enterprise system?

• Allow individuals to operate their businesses in ways they think will maximize their profits

• Decide what companies will be formed and then allow the managers to run them

• Require companies to disclose information to consumers

• Control business activities