3-1 Characteristics of Free Enterprise Notes

A type of consumer

A business that combines resources

A government entity

A non-profit organization

It discourages innovation because companies are too focused on cutting costs.

It encourages producers to improve their products and lower prices.

It eliminates small businesses in favor of large monopolies.

It has no significant impact on product quality or price.

The government owns all property and businesses, and individuals can lease them.

Individuals and businesses can own property and businesses, and they control the means of production.

Private ownership is limited to personal property, while businesses are publicly owned.

All property and businesses are owned collectively by the community.

In socialism, economic planning is decentralized and based on consumer choices, while in free enterprise, the government plans the economy.

In socialism, the government plays a significant role in economic planning, while in free enterprise, market forces and consumer choices guide economic activities.

Both systems rely entirely on market forces for economic planning, with no government intervention.

In free enterprise, economic planning is done by international organizations, whereas in socialism, it is done by local communities.

Voluntary Exchange

Competition

Economic Incentives

All of the above

They restrict free enterprise

They determine how free enterprise works

They have no impact on free enterprise

They promote free enterprise

It only collects taxes from households and firms.

It provides public goods and services funded by taxes.

It only redistributes income through social programs.

It does not interfere in the economy.

It increases household income.

It decreases household income and reduces spending.

It increases the flow of income to firms directly.

It has no effect on the flow of income.