C3- Section 1

Comprehensive vocabulary flashcards covering the key terms, legal rights, historical examples, institutions, and figures from Chapter 3 on the American Free Enterprise System and Milton Friedman.

Free Enterprise System

An economic system, also known as capitalism, based on the private ownership of productive resources in which individuals and businesses are free to start and operate enterprises.

Capitalism

An economic system based on the private ownership of the factors of production, where producers are free to create what consumers want and consumers decide what goods or services to purchase.

Profit

The financial gain or money left over after all the costs of production have been subtracted from total business revenues.

Open Opportunity

The legal right and ability of anyone to enter and compete in any marketplace of their own free choice, serving as an incentive to be productive and efficient.

Legal Equality

A foundational economic principle where everyone holds the same economic rights under the law, ensuring that the law does not grant some individuals a better chance of market success over others.

Free Contract

The right of individuals to decide for themselves which legal economic agreements they want to enter into, including business, employment, or purchasing agreements.

Profit Motive

The incentive that encourages people and organizations to improve their material well-being by seeking to gain financially from economic activities.

Voluntary Exchange

A cornerstone of the free enterprise system in which buyers and sellers freely and willingly engage in market transactions, functioning through the freedom of contract.

Competition

The economic rivalry among businesses that acts as a balance to the profit motive by forcing prices down, helping establish prices that neither deter buyers nor eliminate profits.

Monica Ramirez

An American entrepreneur and makeup consultant who took advantage of free enterprise in $2001$ by creating Zalia Cosmetics to serve an unmet demand among Latina consumers.

Zalia Cosmetics

A cosmetics company founded in $2001$ by Monica Ramirez specifically for Latinas, expanding to major Hispanic markets including New York, Miami, Dallas, Los Angeles, San Antonio, and Houston by $2004$.

Gary Dahl

An advertising executive who exercised open opportunity and the profit motive in $1975$ by selling pet rocks, becoming a millionaire before leaving the market once consumer demand faded.

Informal Market

An unregulated market sector that emerges to bypass excessive government regulations and administrative barriers, illustrated by street vendors in Mexico City selling low-cost goods.

Singapore Inc.

A term used to describe Singapore's economy because of extensive government involvement, including mandated worker benefits, coupled with policies keeping business rents, taxes, and other costs low.

Central Provident Fund

A mandatory government savings scheme in Singapore that requires all workers to contribute a percentage of their income to fund pensions and public projects like healthcare, education, and housing.

Milton Friedman

A prominent economist who advocated free-market capitalism, won the Nobel Prize for Economics in $1976$, taught at the University of Chicago, and advised U.S. presidents Richard Nixon and Ronald Reagan.

Chicago School of Economics

An association of free-market economic thought developed at the University of Chicago and heavily shaped by Milton Friedman, emphasizing deregulation, open markets, and monetary control.

Inflation

A sustained rise in the general level of prices across an economy, which Milton Friedman posited is caused by a government's failure to control the money supply.

Free to Choose

A best-selling $1980$ nonfiction book written by Milton Friedman and his wife Rose Friedman focusing on personal freedom and free-market economics.

Milton and Rose D. Friedman Foundation

An organization founded in $1996$ by economist Milton Friedman and his wife to advocate for and promote educational school choice.