Characteristics of the US Economy

The United States has a -

• Free Market Economy

• Command Economy

• Mixed Economy

• Traditional Economy

Competition results in all of the following EXCEPT –

• Lower prices

• Better quality

• more choices

• fewer sales

A business’ profit is its -

• net worth minus earnings

• earnings minus expenses

• price per share of stock

• investment divided by income

Private property is best described as -

• setting prices higher for extra quality goods

• the interaction of supply & demand

• individuals’ right to own their own goods and resources

• government control of goods and services

   

Free markets are allowed to operate –

• without interference from the government

• without many rules

• at the will of the people

• at times of economic prosperity

In the American economy, buyers determine what is produced by the purchases they make.  This is known as -

• opportunity cost

• incentives

• capital resources

• consumer Sovereignty

“I just bought 50 acres of prime farmland. This land is mine, and I will use it to create a Christmas tree farm to start a Christmas tree business”

• consumer sovereignty

• profit

• free enterprise; markets and limited government

• competition

• private property

"Although some families have chosen to buy an artificial tree to use every year, many more families still like the tradition of going out to pick their tree every year and having that fresh Christmas tree smell in their house. There is still a need for families to buy a real Christmas tree every year. As long as people keep buying our trees, we'll keep selling them."

• consumer sovereignty

• profit

• free enterprise; markets and limited government

• competition

• private property

"Another Christmas tree farm down the street is lowering the cost of their trees. What can we do to make ours more appealing so that we don't lose business to the other farm?"

• consumer sovereignty

• profit

• free enterprise; markets and limited government

• competition

• private property

"Even after expenses (paying for seedlings, tools, labor, etc.) we doubled our money this year!"

• consumer sovereignty

• profit

• free enterprise; markets and limited government

• competition

• private property