Question
Carol has decided to advertise her custom-baked cakes in the local paper in the hopes that her sales could go towards purchasing a home. Which incentive of the free enterprise system would help Carol? Carol and the local officials can set the prices of her cakes. Carol can use the money from her business to achieve her goal. Carol can participate in a barter system for goods to goods. Carol can meet a regulation for the number of local services.
Answer
4.7
(285 Votes)
Faye
Elite · Tutor for 8 years
Answer
B
Explanation
The question revolves around the concept of incentives in a free enterprise system, which is a key topic in economics. In a free enterprise system, individuals have the freedom to create and run businesses, make decisions based on market demands, and use their earnings as they see fit. The options provided in the question are:1. Carol and the local officials can set the prices of her cakes: This option suggests a regulated pricing system, which is contrary to the principles of a free enterprise system where prices are typically determined by market forces rather than government or local authority intervention.2. Carol can use the money from her business to achieve her goal: This option aligns with the free enterprise system's incentive of profit motive. In a free enterprise system, individuals are motivated by the potential to earn profits, which they can then use to achieve personal goals, such as purchasing a home.3. Carol can participate in a barter system for goods to goods: While bartering is a form of economic exchange, it is not a defining characteristic of a free enterprise system. Free enterprise systems are characterized more by monetary transactions and the freedom to engage in business and trade.4. Carol can meet a regulation for the number of local services: This option implies compliance with regulations, which, while a part of any business environment, is not an incentive of the free enterprise system. The free enterprise system is more about economic freedom and less about meeting regulatory requirements.Based on these considerations, the option that best represents an incentive of the free enterprise system for Carol is the ability to use the money from her business to achieve her personal goal, which in this case is purchasing a home. This reflects the profit motive, a key driver in free enterprise systems.