Free Market Economy

What would the government's role in a laissez faire economy be?

• Pretty much nothing

• Setting prices

• Owning the factors of production

• Determining minimum wage

In a Market Economy, who owns the Factors of Production?

• Individuals

• The government

• The president

• The military

The ability of markets to operate with little government interference is what characteristic of the United States economy?

• Private Property

• Competition

• Free Markets

• Consumer Sovereignty

According to this table, what will happen if the price of a slice of pizza decreases from $2.50 to $1.00?

• Customers will not buy as much pizza

• Profits of pizza makers will increase

• There will not be enough pizza produced

• The cost of producing pizzas will rise

Which economic concept is illustrated in these drawings?

• Consumer sovereignty

• Profit margin

• Opportunity cost

• Central planning

What economic concept best describes this scenario?

• Scarcity requires people to make choices

• price is determined by supply and demand

• resources available determine what is produced

• opportunity cost must be considered when making choices

Which phrase best completes the title of this diagram?

• Government Regulation

• Industrial Productivity

• Business Profit

• Consumer Choice

Which of the following describes a market economy?

• The government decides to move you and many of your friends to the country so you can study farming

• You notice a lot of people in your neighborhood have dogs so you decide to start a dog walking business

• You grow up in a small village and are a fisherman just like your father and grandfather

• The leader of your country decides you will become a coal miner

What is a key characteristic of a free market economy?

• Government control over resources

• Central planning of the economy

• Private ownership of resources

• State ownership of businesses

In a free market economy, prices are determined by:

• Government regulations

• Supply and demand

• Central planning

• Monopolies