Name __________________________Period ______
Quiz Date / due date ______________
American Free Enterprise
Principles and Practices of Economics
Chapter 3 Study Guide
Directions: Referring to your text, read pages 50-72, and answer the following questions.
Use this as a reference when studying for the chapter quiz, and be prepared to turn it in for
credit prior to taking the quiz.
Section 1:
1.
Why has America been such an economic success? ___________
__________________________________________________________________.
2.
Free enterprise in America is founded on which basic ideas? (look at figure 3.1)
___________________________
___________________________
___________________________
___________________________
___________________________
___________________________
___________________________
3.
The rivalry among sellers to attract customers while lowering costs is known as
_______________________.
4.
What is the fundamental purpose of the free enterprise system?
__________________________________________________________________
5.
How does consumer sovereignty play a role in the free enterprise system?
________________________________________________________________
6.
Private organizations that try to persuade public officials to act or vote according to
group member’s interests are known as _______________ ______________.
7.
__________________ consumers will make the free market system work more
efficiently.
8.
What types of laws require companies to give consumers full information about their
products? _____________________ ___________________ laws
9.
The concerns of the public as a whole are known as __________ ______________.
10.
What does OSHA stand for? ____________________________________________
11.
What is its purpose?
_________________________
12.
What does EPA stand for? ____________________________________________
13.
What does the FDA do? _______________________________________________
14.
At what period in our recent history did the public pressure for less government
regulation of industry? __________ and ____________
Section 2:
15.
The study of the behavior and decision making of entire economies (nations) is
known as ________________________________.
16.
The study of the economic behavior and decision making of small units such as
individuals, families, or businesses is known as __________________________.
17.
The total value of all final goods and services produced in an economy is known as
the _______, or _______________ ___________________ _________________.
18.
A period of macroeconomic expansion followed by a period of contraction or decline
is known as a _______________ ________________.
19.
How long do these cycles last? ___________________________________________
20.
A desirable unemployment rate in the U.S. is considered to be between ____ - ____%
21.
What are two signs or indicators of economic stability? ________________________
_____________________________________________________________________
22.
The American economy can increase productivity through the American _________
___________ (commitment to the value of work) and improved ________________.
23.
A U.S. patent gives the inventor or a new product the exclusive right to produce and
sell that product for what length of time? ______________
24.
What is it called when an author or artist has exclusive rights to publish and sell his or
her creative works? _______________________
Section 3:
25.
A shared good or service for which it would be inefficient or impractical to make
consumers pay individually, or to exclude non-payers is known as a ______________
____________________
26.
Identify two examples of public goods. ________________ & __________________
27.
How are public goods paid for? __________________________________________
28.
Any number of consumers can use a public good without reducing the ____________
to any single consumer.
29.
Describe the difference between the public sector and the private sector.
30.
Someone who would not choose to pay for a certain good or service, but would get
the benefits of it anyway if it were provided as a public good is known as a _______
_______________.
31.
When the market does not distribute resources efficiently, it is known as a
______________________ _______________________
32.
An economic side effect of a good or service that generates benefits or costs to
someone other than the person deciding how much to produce or consume is known
as an _____________________________.
33.
What is an example of a positive externality? ______________________________
Section 4:
34.
An income level below that which is needed to support families or households is
called the ____________ ______________.
35.
The general term that refers to government aide to the poor is _________________
36.
Direct payments of money from the government to qualifying citizens are called
_____________ _____________
37.
Who are these qualifying citizens? ___________, ___________, & _____________
38.
When was the Social Security Program created? _____________
39.
What must unemployed workers do in order to receive unemployment benefits?
___________________________________________
40.
Where does the money come from for workers’ compensation benefits?
____________________________________________
41.
What two categories of people are covered by Medicare benefits? ______________
& ________________________
42.
Who did President George W. Bush propose should be allowed to compete for federal
funds? _______________________________________________________________
43.
Read the chapter summary on page 72 carefully.
44.
Answer items 1-7 from the Key Terms activity on page 72, by writing the correct
term in the appropriate blanks below.
1. ___________________________________
2. ___________________________________
3. ___________________________________
4. ___________________________________
5. ___________________________________
6. ___________________________________
7. ___________________________________