Problem 1
Explain the differences among the following terms. a. open opportunity b. legal equality c. free contract
Problem 1
Why is the U.S. economy sometimes referred to as a modified free enterprise system?
Problem 2
What is the role of the profit motive in the American free enterprise system?
Problem 2
How does the profit motive work to allocate resources?
Problem 2
Illustrate the two characteristics of public goods with examples.
Problem 3
How is a free enterprise system linked to economic freedom?
Problem 3
How do households and business firms interact in the product and resource markets?
Problem 4
Give an example of a free rider.
Problem 4
Give examples of three different economic freedoms in a free enterprise system.
Problem 5
How can government limit a negative externality? How can it spread a positive one?
