Business Essentials 204 Private Enterprise System

Every society must develop a system for deciding how it will use its resources so that it can:

• minimize risk.

• meet people’s needs.

• prevent problems.

• control production.

Who answers the basic economic questions in a private enterprise economic system?

• Government agencies

• Influential citizens

• Businesses and individuals

• Entrepreneurs and producers

One of the results of freedom in the marketplace is that:

• businesses use resources efficiently.

• people and businesses can own things of value.

• people can buy anything they can afford that can legally be sold.

• government decides how to use an individual’s private property.

Alex owns a guitar, several books, and a telescope. Alex’s possessions are examples of:

• private property.

• economic resources.

• capital goods.

• equal distribution.

Which of the following is a benefit of the freedom to own private property:

• It helps limit our economic choices.

• It encourages businesses to be cooperative.

• It encourages people to save and invest.

• It allows people to do anything they want to do.

Which of the following statements best describes the way that the U.S. economic system functions:

• Individuals are the primary decision makers, while businesses are the regulators.

• Individuals and businesses are the primary decision makers, and there is no regulator.

• The government is the primary decision maker, and occasionally it becomes the regulator.

• Individuals and businesses are the primary decision makers, while the government is the regulator.

The basic role of the United States government is to

• protect U.S. citizens.

• maintain control of prices.

• increase production.

• limit business startups.

In a private enterprise economic system, consumers can choose from a variety of products as a result of

• the collection of taxes.

• limited government control.

• inflation.

• competition.

The economic basis for the private enterprise economic system is

• competition.

• the profit motive.

• the marketplace.

• supply and demand.

The private enterprise economic system is often described as a(n)

• pure system.

• controlled system.

• entrepreneur system.

• price-directed system.