Chapter 3, section 1: Benefits of Free Enterprise
Name: ___________________
Economics and You - page 49
1. Every day, ______________________ entrepreneurs begin new businesses that earn
_________________, create ______________, and offer new goods and services.
Principles in Action - page 49
2. In this section, which country is the immigrant that built a successful business from?
Basic Principles of Free Enterprise - page 49 and 51
3. What does it mean when the United States is referred to as the “land of opportunity”?
4. True or False. More than 3.5 million American businesses are owned by members of minority groups.
5. What is the key factor for America’s success?
Profit Motive - page 51
6. How does the profit motive drive individuals and businesses?
7. List the three benefits provided by reliance on the profit motive;
a.
b.
c.
Open Opportunity - page 51
8. When the textbook uses the terminology “ economic mobility up or down” , what does this mean?
Legal Equality - page 51
9. If a country restricts the legal rights of women or minorities what will happen to that society?
Private Property - page 51
10. What kind of incentive does personal ownership provide us?
Freedom to Buy and Sell - page 51
11. What allows people to decide what agreements they want to enter into?
12. True or False. A singer can sign an agreement with any sponsor or recording company.
13. What gives the person the right to buy or sell what they want?
14. What does voluntary exchange encourage?
The Role of the Consumer - page 51 and 52
15. In what way do consumers signal businesses?
16. If a consumer does not buy a good or service, what signal does this send to a producer?
17. What does the Consumers Union do?
Economic Freedom and the Constitution - page 52
18. Rights that allow people to ___________________ in business activity are _________________ in
the framework of the ______________________.
19. Which constitutional recognition does the writers of your textbook consider most important?
Property Rights - page 52
20. Which amendment protects your private property right?
21. What kind of “use” does the government have the right to take private property away from an
individual?
22. If the government takes your land for public use, then what must they give you in return?
Taxation - page 53
23. True or False. Congress has the power to tax individuals in whatever way they want.
24. In what year did Congress finally obtain the authority to levy an income tax?
25. List the two groups that must pay federal income tax?
a.
b.
Contracts - page 53
26. What is a contract?
27. What can the legislature NOT do in terms of contracts?
The Role of Government in the Marketplace - page 53 and 54
28. Under the free enterprise system list the three constitutional responsibilities, America has to it’s
citizens;
a.
b.
c.
29. What is another term to describe the concerns of society as a whole?
30. List examples of two problems that the government has passed laws to protect us from?
a.
b.
Information and Free Enterprise - page 53 and 54
31. What do educated consumers do for the free market system?
32. You may have seen energy efficiency tags on ___________________, or heard _______
commercials in which the announcer reads off a long list of ________________ and conditions.
33. What does the Federal Trade Commission Act require?
34. What does the Truth-in-Lending Act require?
Protecting Public Health, Safety, and Well-Being - page 54 and 55
35. What agency was formed out of concern about our environment?
36. What two requirements are places on gas stations?
37. What do some zoning laws forbid homeowners to do?
Negative Effects of Regulation - page 55
38. List the three negative effects of regulation that businesses began to point out;
a.
b.
c.
39. List two negative effects that the airlines and telephone industries were claiming;
a.
b.