Principles of Free Enterprise and Capitalism Quiz

Capitalism permits private ownership and operation of businesses for profit.

Laissez-faire is the concept of economic freedom for individuals and businesses without government interference.

In a free enterprise system, prices play a role in allocating resources and conveying information in the market.

In capitalism, factors of production include resources like natural resources, human capital, and physical capital.

Perfect competition is the ability of an individual or firm to enter and leave a market freely.

The invisible hand refers to the impact of market forces and individual self-interest shaping economic outcomes.

GDP represents the total value of goods and services produced within a country's borders in a specific time period.

In capitalism, the primary motive for producers and businesses is the pursuit of profit.

Private property rights are a characteristic of a free enterprise system.

A situation where a single seller dominates a market and controls the supply is known as a monopoly.

Communism emphasizes social equality and collective ownership of the means of production.

A mixed economy features a combination of private and government ownership.

Competition in capitalism serves to promote efficiency and spur innovation in the market.

Adam Smith, author of 'The Wealth of Nations,' is a key figure in the development of capitalism.

The total market value of all final goods and services produced annually within a country's borders is known as GDP.

Laissez-faire suggests that government intervention can lead to inefficiencies and should be minimized in the economy.

Laissez-faire is the idea that government should not interfere in economic affairs, allowing individuals to pursue their own self-interest.

A planned economy relies on central planning and government control of the means of production.

Entrepreneurs in a free enterprise system own and operate businesses.