chp 11 zupi(econ).docx - Chapter 11 Section 2 How Does the Government Protect Property Rights The Constitutional Basis for Government Involvement in the

chp 11 zupi(econ).docx - Chapter 11 Section 2 How Does the...

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Chapter 11Section 2: How Does the Government Protect Property Rights?The Constitutional Basis for Government Involvement in the Economyto lay and collect taxes.to provide for the general welfare.to borrow money.to regulate interstate and foreign commerce.to establish uniform bankruptcy laws.to coin money and regulate its value.to fix the standard of weights and measures.to protect the writings and discoveries of authors and inventors.Government’s Role in Protecting Property RightsPrivate ownership encourages people to take care of their property.Private ownership encourages people to make the most productive use of their property.Private ownership encourages people to develop their property in ways that benefit others.An Exception to Property Rights: Eminent DomainEminent domain is the power to force the transfer of property from a private owner to the government for a public purpose. Section 2 Regulation:The establishment, by the government, of rules aimed at influencingthe behavior of firms and individuals; regulation can involve setting prices, establishing product and workplace standards, and limiting entry into an industry.Eminent Domain: The power of a government to take an individual’s property forpublic use if the owner is fairly compensated.Takings Clause:A clause of the Fifth Amendment to the Constitution stating thatthe government must pay private owners when their property is taken for public use under the power of eminent domain.Section 3: What Regulatory Roles Does Government Play in Our Economy?Government’s Role in Maintaining Competition:Competition is vital to the economy, the government acts to maintain competition when markets fail to do so.The illegal practice of price fixing occurs when competitors agree on a price for agood or service.Acquire goods and services by seeking bids from competing firmsThe tactic known as market division occurs when competitors agree to divide a market among themselves. The Justice Department and the FTC also monitor mergers, in which two separately owned firms combine into one firm. A merger is illegal if it will substantially lessen competition or tend to create a monopoly.
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Government’s Role in Protecting Consumers, Savers, and Investorsin today’s market, buyers may not have all the information they need to make sound judgments about products. thave come to rely on regulatory agencies to provide such information. In 1972, Congress created the Consumer Product Safety Commission to protect Americans against undue risks associated with consumer products.
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