Economic Principles and Government Roles

Mr. Burns introduces a homework assignment on the characteristics of the US economy, explaining its structure as a mixed economy with government regulation. He discusses market dynamics, cost-benefit analysis, and government intervention, using the auto industry bailout as an example. Key economic concepts such as profit motive, consumer sovereignty, competition, and private property are covered. The video concludes with a discussion on free enterprise and price determination through supply and demand, and a preview of the next class activity.

What type of economy does the US have?

• Traditional economy

• Mixed economy

• Free market economy

• Command economy

In a mixed economy, who shares in economic decision-making?

• Only businesses

• Only individuals

• Only the government

• Businesses, individuals, and the government

What is a key reason for government intervention in the economy?

• To ensure businesses do not fail

• To increase taxes

• To control all economic activities

• To eliminate competition

Which of the following is an example of government intervention?

• Bailout of the automobile industry

• Increase in consumer spending

• Rise in stock market prices

• Decrease in unemployment rate

What motivates businesses to start and operate?

• Profit motive

• Market competition

• Government regulations

• Consumer demand

How do consumers influence what goods and services are produced?

• Through government policies

• By voting in elections

• Through their purchasing decisions

• By setting prices

What does competition among businesses lead to?

• Higher prices and lower quality

• Lower prices and better quality

• Monopolies

• Government control

What rights do individuals have in the US economy regarding property?

• Rights to own property only with government approval

• Full rights to own property

• Limited rights to own property

• No rights to own property

What is the role of supply and demand in the economy?

• To set government policies

• To determine prices

• To increase taxes

• To eliminate competition

What is the equilibrium price?

• The price set by the government

• The price where supply and demand meet

• The highest possible price

• The lowest possible price