For markets to work well, there must be:

• market power.

• a central planner.

• property rights.

• abundant, not scarce, resources.

The government enforces property rights by:

• requiring property owners to pay property taxes.

• providing police and courts.

• forcing people to own property.

• providing public parks and recreation facilities.

The laissez-faire economic approach is best demonstrated by which economic system?

• Command

• Mixed

• Free enterprise

• Traditional

In a free‑enterprise/free‑market economy, economic activity is guided by:

• the government.

• corporations.

• central planners.

• self-interest and prices.

Who is Adam Smith?

• the father of modern capitalism

• proposed the invisible hand of the market metaphor

• proposed competition as the struggle among producers to attract consumers

• All of the above

The profit motive drives business owners to

• protect the private property rights of those who consume their goods.

• see that the principle of open opportunity applies to all Americans.

• make sure their firm is operating at its highest level of efficiency.

• develop incentives for their employees to work fewer hours each week.

An entrepreneur can BEST be characterized as someone who

• tries to persuade officials to pass favorable laws.

• takes risks in order to acquire profits.

• signals businesses what and how much to produce.

• seeks to engage in a voluntary exchange.

What is the invisible hand of the market mean?

• a metaphor for the unseen forces that move the free market economy through buying and selling

• the government that works behind the scenes to control the economy

• The idea that inssen forces extort consumers for profit

• The government influence in the economy

What are the characteristics of the free-enterprise system?

• Economic freedom

  voluntary exchange

  private property

  profit motive

  competition

• income inequality

  buying and selling

• supply and demand

  factors of production

• free-market capitalism

What are the benfits of free-enterprise?

• income inequality

• government redistribution of wealth

• individual freedom

  variety of products

  promotes progress

  wealth creation

• uneven economic growth