ECO - Ch.3 Vocabulary

What is the definition of 'free enterprise'?

• A system where the government controls all businesses

• An economic system where private businesses operate in competition and largely free of state control

• A system where businesses are owned by the community

• A system where only the government can own businesses.

Which of the following best describes 'voluntary exchange'?

• A trade where both parties are forced to participate

• A trade where both parties agree to the terms

• A trade regulated by the government

• A trade that involves only goods, not services.

What are 'private property rights'?

• The right of the government to own all property

• The right of individuals to own and control their possessions

• The right of businesses to take over private property

• The right of the community to share all property.

What is 'profit'?

• The total revenue minus total expenses

• The total expenses minus total revenue

• The total revenue plus total expenses

• The total expenses plus total revenue

Which of the following is an example of 'profit motive'?

• A) A company reducing prices to increase sales

• B) A company donating to charity

• C) A company investing in new technology to increase profits

• D) A company laying off employees to cut costs.

What are 'biofuels'?

• Fuels made from fossil resources

• Fuels made from living organisms or their byproducts

• Fuels made from nuclear energy

• Fuels made from solar energy.

What was the 'Great Recession'?

• A period of economic growth

• A severe global economic downturn that occurred in the late 2000s

• A period of technological advancement

• A time of political stability.

Who are 'entrepreneurs'?

• Individuals who work for the government

• Individuals who start and run their own businesses

• Individuals who only invest in stocks

• Individuals who manage public companies.

What is 'consumer sovereignty'?

• The power of consumers to decide what goods and services are produced

• The power of the government to control consumer choices

• The power of businesses to dictate prices

• The power of consumers to own businesses.

What is a 'mixed economy'?

• An economy with no government intervention

• An economy that combines elements of both capitalism and socialism

• An economy based solely on agriculture

• An economy that relies only on technology.