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Chapter 3; Section 3

Government & Free Enterprise

Pages 84 to 90 in your Textbook
Vocabulary to Know and Love! Market Failure Public Goods Free Rider Infrastructure Externality Negative Externality Positive Externality Subsidy Safety Net Transfer Payment Public Transfer Payment

1. What economic term would best describe this effect? One student is late, so Mr. J gives everyone in class a 5 page essay assignment on the value of being on time.

2. How is a transfer payment different from other kinds of payments

3. If you are working, how does some of your income reach needy people? Be specic!

4. Illustrate two characteristics of public goods using real-life examples

5. Unemployment compensation and payment of living expenses for the disabled are examples of what kind of government involvement in the American economy?

Mr. Johnson


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6. Explain why governments provide public goods and infrastructure. Provide examples from your daily life.

7. How do governments decrease negative externalities?

(Yep... you need an example from real-life)

8. How do governments increase positive externalities?

goes here)

(Guess what... another example from real-life

9. Milton Friedman once wrote: Many people want the government to protect the consumer. A much more urgent problem is to protect the consumer from the government. Explain what you think Friedman meant by this. Use examples from your daily life experiences!

Mr. Johnson


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