Benefits of Free Enterprise
There are seven basic characteristics of free enterprise. Name three of them.
Opportunity, incentives, profit motive, competition, legal equality, private property rights, economic freedom.
This is the study of economic behavior and decision-making in small units, such as households and firms.
Microeconomics
Name one example of a public good.
Public good: shared good or service for which it would be inefficient to make consumers pay individually and to exclude those who did not pay.
EX: Public schools, roads, freeways, police, firefighters, etc.
This government agency sets standards for food, drugs, and cosmetics and has the acronym FDA. What is the full name of the agency?
Food and Drug Administration
What are the two elements that make up a good work ethic?
Hard work and caring about the quality of one's work.
You and your friends try want to petition to the school district to trade in your Chromebooks for a new one every other year. What private organization that tries to persuade public officials can you join to try to achieve this?
An interest group.
This is one measure of a nation's economic health and is the total value of all final goods and services. What is the full name and acronym of this concept?
Gross domestic product (GDP)
True or false: Public goods are financed by the private sector.
False: Public goods are financed by the public sector.
Public sector: the part of the economy that involves the transactions of the government.
Private sector: The part of the economy that involves the transactions of individuals and businesses.
Look at the graph on the board. When the graph goes from Point A to Point B, what is happening to the economy?
The economy is in expansion or growing.
How does the government promote public interest?
The government has created major federal regulatory agencies.
The government has passed laws to protect us from economic problems that affect us all, such as pollution or unsafe foods and medicines.
What is the role of an entrepreneur and what are they incentivized by?
To combine the factors of production (LLC) in order to create new goods and services. They are mainly incentivized by profit.
Economists consider a healthy unemployment rate to be at 4%-6%. Why is this not 0%?
It is not 0% because people are always in between jobs and if the unemployment rate was 0%, then new people coming into the workforce would have no chance at getting a job.
You go on vacation to New York and drive across the Manhattan Bridge. As someone who would not be willing to pay for a certain good or service, but would get the benefits anyway if it were provided as a public good, you are known as a what?
Free rider.
This FDIC insures deposits and regulates certain bank practices. What does FDIC stand for?
Federal Deposit Insurance Corporation
What characteristic of free enterprise serves to regulate the free market by keeping prices from rising too high?
Competition
The right of a government to take private property for public use is known as this concept.
Eminent domain.
What are two ways the government can encourage innovation from inventors and authors? By granting these two things, the government protects people's right to profit from their creativity.
Patents: A government license that gives the inventor of a new product the exclusive right to produce and sell it for 20 years.
Copyrights: A government license that grants an author exclusive rights to publish and sell creative works.
At the poverty threshold, the government steps in to support the people who make an income level below what is needed to support a family or household. How does the government do this?
They collect taxes from individuals and redistribute some of those funds in the form of welfare.
This can support the very young, very old, the sick, the poor, and the disabled.
Look at the graph on the board. When the graph goes from Point B to Point C, what is happening to the economy?
The economy is in contraction or declining.
These laws, articles, amendments, or documents give Congress the power to collect taxes from individuals and businesses.
The Constitution: Article 1 and 16th Amendment
After a customer's death, Panera Bread is being ordered by the court to put warnings up to tell their customers about its caffeinated lemonade having 390 milligrams of caffeine per large cup. By doing this, Panera is following what laws?
Public disclosure laws. (The daily FDA recommended maximum intake of caffeine is 400 milligrams, people were drinking multiple cups.)
Starbucks is looking to invest in robots to make drinks for their customers. This would lead to the workers to become _______, but Starbucks to have higher ________.
Obsolescence/obsolete and efficiency.
An externality is 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. What is one example of a positive externality and negative externality for the construction of a public bridge?
Positive: Bridge aids visitors to the county, local construction workers are hired and trained, increased traffic boosts local businesses.
Negative: Construction and increased traffic lower air quality in area, river environment is altered and harms local fishery, the bridge drives ferry company out of business.
What does the Occupational Safety and Health Administration (OSHA) do?
Enact policies to protect health and safety of workers.
Scenario: Mr. Duong was a student teacher at Hoover High School, where he was trained and got experience to be a teacher. Hoover High School set up their student teacher program to serve their own interests. But, Mr. Duong has since left Hoover High School and now works at South El Monte High School, where South and the students at South benefit from my skills without having paid for them.
What economic concept is BEST displayed in this scenario?
Positive Externalities