Question

Statement A Julie makes cookies in her kitchen. A lot of people tell her they taste really good so she decides to sell them on her street corner for $2.00 each. Statement B Jack runs a restaurant where he only serves tacos for $2,000.00 The city decides they cost too much and shuts his restaurant down. Which statement above accurately reflects the free enterprise system? a Statement A b Statement B

Answer 1

A Statement A

Step-by-step explanation:

Statement A reflects a free enterprise system because Julie is allowed to pursue an economic activity: the act of baking cookies in her kitchen with the goal of selling them.

But not only so, she is also allowed to go to the street corner and sell them, without having to pay any government official to do so, or without the risk of having her business shut down.

Statement B on the other hand, reflects a system in which the government can decide how much money a person (Jack) can charge for his products (the tacos that he was charging for $2,000.00). This is not a free enterprise system, because the government has the power to shut down a business at any time over some arbitrary rule.