Chapter 3

Question 1

Capitalism

Answer 1

An economic system in which private citizens ,own and used factors of production.

Question 2

Free enterprise

Answer 2

An economic system in which privately owned business have the freedom to operate.

Question 3

Voluntary exchange

Answer 3

the voluntary act of buyers and sellers freely and willingly engaging in market transactions.

Question 4

Private property rights

Answer 4

people to own and control their possessions as they wish.

Question 5

Incentive

Answer 5

a thing that motivates or encourages one to do something

Question 6

Profit

Answer 6

difference between the revenue from sales and the full opportunity cost of resources involved in producing the sales
Result.

Question 7

Profit motive

Answer 7

driving force that encourages people and organizations to improve their material well-being; characteristic of capitalism and free enterprise

Question 8

Competition

Answer 8

the struggle among sellers to attract consumers

Question 9

biofuels

Answer 9

fuel made from wood, peat, municipal solid waste, straw, corn, tires, landfill gases, fish oils, and other waste

Question 10

Great Recession

Answer 10

severe economic downturn that lasted from late 2007 through mid-2009.

Question 11

Entrepreneur

Answer 11

risk-taking individuals who introduce new products or services in search of profits; one of the four factors of production

Question 12

catalyst

Answer 12

something that stimulates activity among people or forces

Question 13

Consumer sovereignty

Answer 13

role of consumer as ruler of the market in determining the types of goods and services produced

Question 14

Regulator

Answer 14

someone or something that controls activities

Question 15

modified free enterprise economy

Answer 15

free enterprise market economy where people carry on their economic affairs freely, but are subject to some government intervention and regulation; also see mixed economy.

Question 16

5 important characteristic of a capitalism free enterprise economy.⭐️

Answer 16

1. Economic freedom ( to buy things you want , to choose your occupation and your employer )
2. Volunteer exchange (the act of buyers and sellers , freely exchanging goods)
3. Private property rights ( the right to own and control your own processions )
4. Profit motive ( the incentive to improve ones materiAl well being )
5. Competition ( the struggle among sellers to attract consumers).

Question 17

Benefits of free enterprise:

Answer 17

1. Individual freedom = choices
2. A variety of Goods = incredible stuff
3. Adapting to change = prices
4. Promoting progress= cell phone evolution great example
5. Creation of wealth = GNP (gross domestic product ) the dollar value of all goods and value and services , made USA 2 .largest economies

Question 18

Major disadvantages of a free enterprise

Answer 18

uneven economic growth (recession and depression).

2.growing gaps between rich and poor ( gilded age / 1900 = 56% poverty rates, today is 12% poverty rate.

GDP = gross domestic product - the dollar values of all final goods , services , structures produced in one years in a country

Question 19

role of government

Answer 19

Protect the people 2. Provide services for the people , 3 regulate business and 4. Consumer of goods.