Advantages Of The Free Enterprise System

Profit Motive

Economic incentive of wealth accumulation

Public Good

Goods and services offered to the public via the government.

Public Transfer Payment

A payment in which the government transfers income from taxpayers to recipients who do not provide anything in return.

Free Rider

A person who chooses not to pay for a good or service but who benefits from it when provided.

Externality

A side effect of a transaction that effects someone other than the producer and the buyer.

Legal Equality

A situation in which everyone has the same economic rights under the law.

Free Enterprise System

An economic system in which anyone is free to start a business or enterprise.

Modified Free Enterprise Economy

An economic system in which includes some government protections, provisions, and regulations.

Negative Externality

An externality that has a negative impact effect, or cost, for people who were no involved in the original economic activity.

Positive Externality

An externality that has a positive impact or benefit to people who weren't involved in the market exchange.

Profit

The amount of money left over once the cost of production has been subtracted from the revenue.

Free Contract

The choice in what legal agreements you enter into.

Transfer Payment

Transfers of income from one person or group to another even thought he recipients does not provide goods and services back.

Market Failure

When people who are not part of a marketplace interaction benefit from or pay parts of the cost.

Infrastructure

the goods and services that are necessary to the smooth functioning of society.