Part 2: Check Your Understanding-Answer the following questions.

8. Why do economists assume that voluntary exchange is better for the economy than involuntary exchange?

9. It's considered theft when someone forces you to give them $1,000. Why is it generally not considered theft when the government forces you to give them $1,000 in taxes?

10. According to socialists, what are some disadvantages of capitalism and free markets?

11. Why might a private business be more efficient than a state-owned business?

12. Why do you think that most countries have a mixed economy?