The Free Enterprise System
Our American economy is based on the free enterprise system. Consumers are free to decide how to spend or invest their time and money. The goal of producers is to make profits by satisfying consumer demand. Open competition among producers usually results in their providing the best quality of goods or services at the lowest possible prices.
The free enterprise system is based on competition among businesses. With competition, only the most efficient businesses survive. To ensure that a degree of competition exists, the Federal Government enforces strict "antitrust" laws to prevent anyone from gaining control over a market.
The free enterprise system assumes that consumers are knowledgeable about the quality or safety of what they buy. However, in our modern society, it is often impossible for consumers to make informed choices. For public protection, government agencies at the Federal, State, and local levels issue and enforce regulations. There are regulations to cover the quality and safety of such things as home construction, cars, and electrical appliances. There are also regulations for financial services provided by banks, insurance companies, and stockbrokers. Another important form of consumer protection is the use of licenses to prevent unqualified people from working in certain fields, such as medicine or the building trades.
Other Important Points to Know:
1. What are the effects of immigration, migration, and limited resources on the economic development and growth of the United States?
*Sometimes native born workers are displaced by immigrants.
*Immigrants increase the supply of labor, which can help meet the needs of growing economies.
*Population growth as a result of migration and immigration affect the need for goods.
*Immigration and migration can put pressure on resources.
*Land development for housing and expanding cities is affected by immigration and migration of people, adding population to the cities.
2. In a free enterprise economy, mass production, specialization, and the division of labor play an important role on the economic growth of the United States.
*Impact of mass production
>Production of products is increased.
>This makes products more affordable.
>This creates more jobs.
*Impact of specialization and division of labor
> Artisans were replaced by specialized workers assigned to do a particular task as part of a process, mostly referred to as the assembly line. An example might be that an artisan makes a pair of shoes and it takes him a month. With specialized labor (assembly line) shoes are produced faster by several people. Each person does a different thing to add to the shoe.
>This creates more jobs.
The free enterprise system is based on competition among businesses. With competition, only the most efficient businesses survive. To ensure that a degree of competition exists, the Federal Government enforces strict "antitrust" laws to prevent anyone from gaining control over a market.
The free enterprise system assumes that consumers are knowledgeable about the quality or safety of what they buy. However, in our modern society, it is often impossible for consumers to make informed choices. For public protection, government agencies at the Federal, State, and local levels issue and enforce regulations. There are regulations to cover the quality and safety of such things as home construction, cars, and electrical appliances. There are also regulations for financial services provided by banks, insurance companies, and stockbrokers. Another important form of consumer protection is the use of licenses to prevent unqualified people from working in certain fields, such as medicine or the building trades.
Other Important Points to Know:
1. What are the effects of immigration, migration, and limited resources on the economic development and growth of the United States?
*Sometimes native born workers are displaced by immigrants.
*Immigrants increase the supply of labor, which can help meet the needs of growing economies.
*Population growth as a result of migration and immigration affect the need for goods.
*Immigration and migration can put pressure on resources.
*Land development for housing and expanding cities is affected by immigration and migration of people, adding population to the cities.
2. In a free enterprise economy, mass production, specialization, and the division of labor play an important role on the economic growth of the United States.
*Impact of mass production
>Production of products is increased.
>This makes products more affordable.
>This creates more jobs.
*Impact of specialization and division of labor
> Artisans were replaced by specialized workers assigned to do a particular task as part of a process, mostly referred to as the assembly line. An example might be that an artisan makes a pair of shoes and it takes him a month. With specialized labor (assembly line) shoes are produced faster by several people. Each person does a different thing to add to the shoe.
>This creates more jobs.
