Topic 2 Free Enterprise & Other Economic Systems

an income level below that which is needed to support families of households

• voluntary exchange
• copyright
• infrastructure
• poverty threshold

the dollar value of all final goods and services produced within a country's borders in a given year

• gross domestic product (GDP)
• patent
• eminent domain
• poverty threshold

the study of economic behavior and decisions in a nation's whole economy

• infrastructure
• eminent domain
• intellectual property
• macroeconomics

Eminent domain

• government aid to the poor
• a government document that grants an author exclusive rights to publish and sell creative works
• the part of the economy that involves the transactions of businesses and households
• the right of a government to take private property for public use

Voluntary exchange

• the principle that people may decide what, when, and how they want to buy and sell
• private property such as books, songs, movies that are protected by copyrights and patents
• laws requiring companies to provide information about their products or services
• the dollar value of all final goods and services produced within a country's borders in a given year

He authored the "Wealth of Nations" and is known as the Father of Capitalism.

• John Locke
• Adam Smith
• Adam Lambert
• John Smith

Which economic goal does this exchange at an outdoor food stand BEST represent?

• voluntary exchange
• economic stability
• profit motive
• economic standard of living

Who benefits from the free market economy? Which of the following BEST answers that question?

• wealthy entrepreneurs
• consumers & producers
• the federal government
• people living in poverty

In a society with a command economy, who answers the basic economic questions?

• consumers in markets
• producers in markets
• a central government
• consumers and producers

Which basic characteristic of free enterprise does this picture BEST illustrate?

• the profit motive
• the right of free contract
• the invisible hand
• freedom of choice