Characteristics of the U.S. Economy

Match the following characteristics of the U.S. economy with their correct definitions:

• Free Enterprise

• Minimal government involvement in the economy

• Consumer Sovereignty

• Consumers decide what is produced

• Competition

• Rivalry between producers of a similar product or service

• Profit Motive

• Individuals or businesses not government own property & resources

• Private Property

• The earnings that remain after all expenses have been paid

Which of the following is NOT a characteristic of a free market economy?

• A) Private ownership of property/resources

• B) Central ownership of property/resources

• C) Profit motive

• D) Competition

Match the economic system to its characteristic:

• Command economy

• Minimal government involvement in the economy

• Mixed economy

• Central ownership of property/resources

• Free market economy

• Individuals and businesses are owners and decision makers for the private sector

In a command economy, there is a lack of consumer choice.

• True

• False

Which of the following best describes 'profit motive'?

• The rivalry between producers

• The right to own property

• Earnings after all expenses have been paid

• Government involvement in the economy

True or False: All choices have opportunity costs.

• True

• False

Scarcity forces consumers, producers, and governments to make difficult choices.

• True

• False

What is a tax?

• A fee that citizens and businesses are required to pay to the government

• Income made by the government from selling goods

• Money borrowed by the government

• A type of public good

What is one way the government promotes and regulates marketplace competition?

• Establishes trust laws to prevent monopolies

• Increases taxes

• Reduces public goods

• Limits business start-ups

Which of the following is NOT a way the government pays for public goods and services?

• Tax revenue

• Borrowed funds

• Fees and fines

• Lottery winnings