TAKE HOME TEST – 100 points
UNIT 4 GOVERNMENT IN A FREE ENTERPRISE SYSTEM
DUE TUESDAY, FEBRUARY 20—NO EXCEPTIONS!
GIVEN: FRIDAY, FEBRUARY 16, 2018 (ALSO POSTED ON MRS. BONNER’S WEBSITE)
I. For each of the following scenarios, decide whether a positive or negative externality is being described and briefly explain who/what it is affecting and how. (5 points each) 
1. A beekeeper establishes a farm net to an apple orchard and the bees move freely into the orchard to pollinate.
2. An airport is constructed near a residential community (neighborhood where people live).
3. A construction company cleans up a toxic dump near a site it is working on.
4. Companies pay for programs to help employees get in shape.
5. A new paper mill in your community spreads harmful fumes into the air.
II. Decide if the following would be said by a pro-free market economist or an interventionist.
(1 point each) 
6. Local government creates a law banning smoking because it harms other customers.
7. The Obama administration lessens regulation on start-up businesses in order for more entrepreneurs to enter the marketplace.
8. The government puts an additional tax on consumer goods such as cigarettes and alcohol to discourage consumers from purchasing those items.
9. The FDA inspects food and medicines to make sure they are safe for consumers.
10. The government gives tax breaks to businesses that hire ex-convicts.
III. For the following, decide which type of government intervention is involved. (4 pts each) 
11. Federal minimum wage
12. Library being built in a rural community
13. Taxes on alcohol
14. The Federal Trade Commission goes after Kellogg’s for ads that contained false information.
15. Government provides a subsidy to farmers
16. Commercial promoting heart screenings
17. FDA conducts inspections on food providers to make sure they are maintaining safety standards.
18. Government gives Nutrition Assistance to help low income families buy healthy food
19. Police officers in Tarrant respond to a car accident
20. Imposing regulation on food trucks
IV. Answer the following questions using complete sentences. 
21. How do regulations prevent open opportunity in the marketplace? (4 points)
22. Describe how government involvement in the economy is a cycle of consuming and producing. (4 points)
23. Give an example of a free rider (NOT THE FIREWORKS SHOW). (2 point)
V. Look at the two quotes below. Write a paragraph response stating which quote you agree with the most and WHY. Use information from your notes and what you know about government regulation in the market economy to justify your answer. Make sure you explain which quote you are using .(20 points)
Hey, why don’t you just limit your laws and regulations to some set of pages? And when you add a page, you have to take one away.
The government has the right to change laws and rules and regulations.