Chapter 3, Section 1 -- Additional Notes

These concepts were covered in the chapter section, but not in the class discussion...they might show up on the chapter test.


NOTES:

The role of government in a Free Enterprise system is to protect, not restrict the market. A couple of examples demonstrating how government protects the market and the ultimate rulers of the market, the consumers:

Public Disclosure Laws – These require businesses to publish important information about their products. For example, labels on food or tags on electronic items that warn us or give us helpful information about such things as energy efficiency. These help consumers make decisions in the marketplace

Federal Regulations – These are restrictions placed on businesses, presumably for the common good (See Figure 3.2, p.55)

Positives: Regulation agencies like the FDA can help protect you from harmful products

Negatives: Rules can be costly to put in place, cutting profits…rather than taking the hit, businesses often pass those costs on to the consumer