Free Markets
Who decides what is produced in a free market?
Consumers and producers.
Who answers the three basic economic questions in a command economy?
The central government.
What does the USDA regulate?
Agriculture, grains, and meat safety.
What does “private property” mean?
Property owned by individuals or groups, not the government.
What is a mixed economy?
An economy with both free market activity and government involvement.
What are the 3 basic economic questions?
What to produce, how to produce it, and for whom.
What two forces regulate the marketplace in a free market?
Self-interest and competition.
What is another name for a command economy?
A centrally planned economy.
Which agency protects consumers from unsafe or mislabeled products?
The FDA
Which amendment protects against unreasonable searches and seizures?
The Fourth Amendment.
Name one feature of a mixed economy.
Government provides infrastructure or defense; private ownership still exists.
What does “economic efficiency” mean?
Using resources wisely to reduce waste.
What are the two main markets in a free market system?
Factor market and product market.
What is the main difference between socialism and communism?
Socialism may allow democracy; communism requires revolution and authoritarian control.
Why are standards for food and medicine important?
They protect public health and ensure fairness in business.
Why does private property encourage investment and stability?
Owners are more willing to improve something they know they’ll keep.
Why do countries adopt mixed economies?
To balance efficiency, freedom, and fairness.
Why must economies grow to improve living standards?
Growth provides more goods, jobs, and income.
How does competition benefit consumers?
It keeps prices low and quality high.
Why do command economies often fail to meet their goals?
Producers lack incentives to innovate; goods are low quality or scarce.
What gives Congress the power to regulate interstate trade?
The Commerce Clause (Article I, Section 8).
What is a “chain of title”?
The history of ownership transfers of property.
Give an example of something free markets struggle to provide that governments usually supply.
National defense or highways.
Give an example of conflicting economic goals.
Protecting the environment vs. increasing industrial output.
Why are there no pure market economies in the world today?
Every country has some government involvement.
Give an example of a modern country with a command economy.
North Korea (China has command features but is transitioning).
How do regulations protect both consumers and businesses?
They prevent fraud, ensure quality, and build trust in markets.
Who has the right to remove someone from private property, and why does this help businesses?
The property owner (with law enforcement); it ensures control of their space.
Name two countries with mixed economies.
The United States and Canada (most modern nations qualify).
Which economic goal focuses on fairness and equal opportunity?
Economic equity.