Guided Reading Activity 2-2 "Characteristics of the American Economy"

What are the effects of competition?

Efficient use of resources

What is a pure capitalist system?

Laissez-Faire system

How can capitalism best be described in the United States today?

An economic system in which private individuals own factors of production but use them within certain legislated limits.

What are the six major characteristics of a pure market economy?

Role of Gov. Freedom of Enter. Freedom of Choice Profit Incentive Competition Private property

What is profit?

The amount left after all the costs of production have been paid.

What do individuals own and control under a free-enterprise system?

The factors of production

How does the government in the United States limit choices in order to protect buyers?

They intervene in various areas of the econmy

Why is the principal of private property important for capitalism?

You can control how, when, and by who your property is used.