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Decide whether each of the following descriptions most closely corresponds to being part o

Decide whether each of the following descriptions most closely corresponds to being part o

Decide whether each of the following descriptions most closely corresponds to being part of a command system, a market system, or a laissez-faire system.

a. A woman who wants to start a flower shop finds she cannot do so unless the central government has already decided to allow a flower shop in her area.

b. Shops stock and sell the goods their customers want but the government levies a sales tax on each transaction in order to fund elementary schools, public libraries, and welfare programs for the poor.

c. The only taxes levied by the government are to pay for national defense, law enforcement, and a legal system designed to enforce contracts between private citizens.

2. Match each term with the correct definition.

private property

freedom of enterprise

mutually agreeable

freedom of choice

self-interest

competition

market

a. An institution that brings buyers and sellers together.

b. The right of private persons and firms to obtain, control, employ, dispose of, and bequeath land, capital, and other property.

c. The presence in a market of independent buyers and sellers who compete with one another and who are free to enter and exit the market as they each see fit.

d. The freedom of firms to obtain economic resources, decide what products to produce with those resources, and sell those products in markets of their choice.

e. What each individual or firm believes is best for itself and seeks to obtain.

f. Economic transactions willingly undertaken by both the buyer and the seller because each feels that the transaction will make him or her better off.

g. The freedom of resource owners to dispose of their resources as they think best; of workers to enter any line of work for which they are qualified; and of consumers to spend their incomes in whatever way they feel is most appropriate.

3. True or False: Money must be issued by a government for people to accept it.

Abhinav 05-Dec-2019

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