Topic 12 pt 1

Question 1

What are the six features of the free enterprise system?

Answer 1

1. economic freedom
2. markets
   3.voluntary exchange
3. profit motive
4. competition
5. private property rights

Question 2

Consumer Sovereignty

Answer 2

the role of the consumer in the market

Question 3

voluntary exchange

Answer 3

the act of buyers and seller freely and willingly choosing to take part in marketplace transactions

Question 4

profit

Answer 4

the amount of money left over from the sale of goods and services after all costs of production have been paid

Question 5

profit motive

Answer 5

encourages individuals and organizations to improve their material well-being

Question 6

competition

Answer 6

the struggle among businesses with similar products to attract consumers

Question 7

private property rights

Answer 7

people have the freedom to own and use their property as they wish

Question 8

What did Adam Smith write?

Answer 8

the Wealth of Nations

Question 9

mercantilism

Answer 9

the belief that gov. should control trade

Question 10

laissez-faire economics

Answer 10

says the gov. should not interfere in the market place

Question 11

sole proprietorship

Answer 11

a business owned and operated by one person

Question 12

advantages of a sp:

Answer 12

1) you’re your own boss
2) decides what to sell
3) decides when open
4) receives all profits

Question 13

Disadvantages of a sp:

Answer 13

1) the owner may find it difficult to raise

Question 15

Advantages of partnerships

Answer 15

to grow and hire more employees and each partner brings special talents to the business

Question 16

Disadvantages of partnerships

Answer 16

Each partner has unlimited liability, they are fully responsible for all business debts

Question 17

corporation

Answer 17

a business owned by many people but is legally treated as though it were a single person

Question 18

stocks

Answer 18

ownership shares of a corporation

Question 19

Franchise

Answer 19

a business in which the owner is the only seller of a product in a certain area. Ex: fast food restaurants and hotels

Question 20

what are the owners of stocks called?

Answer 20

stockholders or shareholders

Question 21

How does the corporation raise money to go into business?

Answer 21

the sale of stocks

Question 22

non-profit organizations

Answer 22

provide goods and services w/o trying to make a profit. Ex: food banks and the Red Cross

Question 23

unemployment rate

Answer 23

the percentage of people in the labor force who are unemployed at any given time

Question 24

4 main sectors of employmen:

Answer 24

-primary: jobs that harvest raw materials ex. farming, fishing, mining
-secondary: jobs that change raw materials into furnished products ex.factories and construction workers
-tertiary:people who perform a service ex. restaurant workers
-quaternary:knowledge sector
ex. doctors and educators

Question 25

labor union

Answer 25

organization of workers that seek to improve wages and working conditions