Unit 2: Quiz 1

Which answer is NOT a component of the free enterprise system?

the right to make consumers pay

In which amendment can one find the "Takings Clause"?

Fifth Amendment

_____ competition in a free enterprise system creates the best environment for consumers' freedom and security.

Perfect

The pursuit of ________ is legitimate because entrepreneurs assume the risk of a business and need to provide for themselves and their families.

Profit

What is a startup?

a new business created by an entrepreneur

A free market economy allows citizens to control the _______ of production.

factors

When there is a lack of ______, businesses are more likely to take advantage of consumers.

competition

A(n) _______ occurs when there are few competitors and high barriers to entry within an industry.

oligopoly

The Clayton Antitrust Act differed from the 1890 law in that ___.

it ended harmful monopolies and created the Federal Trade Commission

The importance of the Sherman Antitrust Act of 1890 is that ___.

it established that the government has a right to regulate the economy

What was the significance of the Supreme Court case Kelo v. New London (2005)?

it gave the government more power in practicing eminent domain

When did the US government begin its involvement in the economy?

late 1800s

The National Football League enjoys a ___.

legal monopoly

The importance of the right to private property is the ability to ___.

make profit in the sale or operation of private property

The absence of any competition within a particular market of a good or service is a(n) ___________.

monopoly

When one company can offer a product at a lower price than other companies due to some advantage, it is said it can create a ____.

natural monopoly

The free enterprise system is based primarily upon the right of Americans to ___.

own their own business

"...nor shall ________ property be taken for public use, without just compensation."

private

The Takings Clause allows the government to practice eminent domain, or the taking away of property if the government ___.

provides fair payment for the property

In a market or free enterprise economy, competition ensures ___.

reasonable prices and consumer choice

The key to the market economy is that basic economic decisions are ultimately made by ___.

the consumers

A lack of property rights contributed to the economic demise of ___

The Soviet Union

Consumers have the right to __________ what to buy in a market economy.

choose

If there are no private property rights, people have no ________ to invest or work.

incentive