All categories

3 years ago

Explain how incentives and the limited role of government function in a free enterprise system.

Business

1 answer:

Degger [83]3 years ago

3 0

Answer:

The government has two major roles;

a. The role of a rule maker.

b. The role of an umpire.

Explanation:

A free enterprise system is an economic model where the prices and quantities produced are determined by the market rather than the government. The government usually has limited or no control on the market forces. In other words, a free enterprise system is an ideology where the market is majorly controlled by private businesses. The foundation for free markets are; voluntary trade, private ownership of property and competition in bidding. However, a government controlled economy usually has the following properties, namely; all property is publicly owned, trade is coerced and there is limited competitive bidding. Even though the government has a limited role in a free enterprise system it still has a role in allowing individuals to operate freely in the market. The roles of the government are; rule maker and umpire.

In a free enterprise system, individuals are allowed to do their transactions without any restrictions. Even though individuals are free to operate, there needs to be rules to make sure that the transactions are in deed free. This is where the government comes in to enforce the laws that govern the smooth running of a free enterprise system. The government's role as an umpire means that the government has the authority to solve disputes resulting from different interruptions of the law.

You might be interested in

How does the profit motive affect the goals of producers?

Softa [21]

Profit motive refers to the concept that the driving force behind the actions and efforts of business enterprises is the desire to earn a profit. More specifically, profit motive means that the overall goal of a business is profit maximization earning the greatest possible profit given the company's competitive strengths and the capabilities of its management team. The business owner maintains a laser focus on this objective, which affects all the decisions a business a producer of goods and servicesmakes.

5 0

3 years ago

A new car sells for $25,000. At the end of the season, the dealership advertises 10% off the retail price of the car. What is th

Zigmanuir [339]

Answer:

= $22,500

Explanation:

The current value of the car: $25,000

at the end of the season: less by ten per cent.

Calculating 10 per cent of $ 25,000.00

= 10/100x25,000= $ 2500 0r 0.1 x $ 25,000.00

new price =$ 25,000 -$ 2500= 22500

= $22,500

3 0

3 years ago

What investments could Trafigura make to maximise its market position while maintaining a responsible risk profile

galben [10]

Answer:

By applying a process of natural hedging, with integrated operational management, logistics and infrastructural investments, Trafigura can diversify its activities and investments so that risks are flattened out. For instance, its investments in storage and shipping capabilities ensure that if the demand for storage is low, the demand for shipping will increase and vice versa.

Furthermore, when Trafigura is not trading actively in the physical commodity, it can use its asset management, logistics, and distribution capabilities and globalized network of subsidiaries and activities to offset the low revenue from trading. These diversified investments and assets, therefore, enhance and complement its various activities so that its risk profile is constantly being managed in a balanced manner without incurring so much risk costs.

Explanation:

Trafigura Group Pte. Ltd. according to sources, is one of the world's "largest independent and integrated commodity traders and a logistics, warehousing, asset management, mining, and energy distribution conglomerate." As a multinational commodity trading company founded in 1993, Trafigura trades in base metals and energy, and is registered and headquartered in Singapore.

7 0

3 years ago

Which product would be considered part of the business-to-business market?

JulijaS [17]

The product that would be considered part of the business-to-business market is the <u>b) Lumber needed to make furniture</u>.

<h3>What is a business-to-business market?</h3>

A business-to-business market describes a process whereby goods or services are exchanged for the production of other goods or services.

In this market, the buying organization is not the final consumer but a producer of goods from the purchased inputs.

<h3>Question Completion with Answer Options:</h3>

a) Classes at a university for a college freshman

b) Lumber needed to make furniture

c) A haircut from a salon

d) Appliances needed for your home

Thus, the product that would be considered part of the business-to-business market is the <u>b) Lumber needed to make furniture</u>.

Learn more about the business-to-business market at brainly.com/question/25492268

#SPJ1

6 0

2 years ago

The following is a condensed version of the comparative balance sheets for Riverbed Corporation for the last two years at Decemb

muminat

Answer:

The preparation of the cash flow statement is presented below:

Explanation:

Riverbed Corporation

Statement of Cash Flows

For the year ended December 31,2020

Cash flows from Operating Activities

Net Income: $328,000

Adjustment to net income is:

Add: Depreciation Expense $34,850 ($217,300 - $182,450)

Add: Loss on sale of Investments $20,500

Add: Decrease in Accounts receivable $10,250 ($369,000 - $379,250)

Less: Decrease in Current Liabilities ($34,850) ($274,700 - $309,550)

Net cash flow from operating activities $358,750 A

Cash flows from Investing activities

Purchase of equipment ($118,900) ($610,900 - $492,000)

Add Sale of Investment $24,600 ($151,700 - $106,600 - $20,500)

Net cash used by investment activities ($94,300) B

Cash flows from Financing activities

payment of dividends ($61,500)

Net cash used by financing activities ($61,500) C

Net Increase in cash $202,950 (A + B + C)

3 0

3 years ago