1. Chapter 11 The Role of Government in Our Economy Section 11.1 Government as Regulator

2. Read to Learn Name four ways in which government regulates business.

3. The Main Idea Our government’s role is to foster success in the economy. One way it does that is by creating rules and regulations that organizations and consumers must follow. Laws cover three aspects of the economy. They protect competition. They protect business agreements and creative properties. They are also used to regulate the production process.

4. Key Concept How the Government Regulates Business

5. Key Term interstate commerce intrastate commerce business that takes place between states business that takes place within states

6. Key Term monopoly oligopoly when a company controls an industry or is the only one to offer a product or service when a small number of companies control an industry

7. Key Term trust antitrust laws a group of companies that band together to form a monopoly and cut out competition laws that allow the federal government to break up monopolies, regulate them, or take control of them

8. Key Term contract breach of contract a legally enforceable agreement between two or more parties when one party fails to live up to the terms of a contract

9. Key Term copyright patent the legal right of artists to own their creations a legal grant for the sole right to own an invention

10. Key Term trademark a name, a symbol, or a characteristic that identifies a product

11. How Government Regulates Business The government is responsible for fostering economic success and protecting people by regulating businesses.

12. Graphic Organizer Federal Government State Government Local Government CountryState Counties Townships Cities Towns Three Levels of Government

13. How Government Regulates Business The federal government oversees interstate commerce. interstate commerce business that takes place between states

14. How Government Regulates Business The state government oversees intrastate commerce. intrastate commerce business that takes place within states

15. Protecting Competition When a monopoly or an oligopoly occurs, consumer choice is limited. monopoly when a company controls an industry or is he only one to offer a product or service oligopoly when a small number of companies control an industry

16. Monopoly, the Board Game Lizzie Magie, a young Quaker woman from Virginia, created a game that became Monopoly ® in 1903. It was developed as a way to teach people about the monopoly of land ownership.

17. Protecting Competition Companies can form a monopoly by establishing a trust. trust a group of companies that band together to form a monopoly and cut out competition

18. Protecting Competition The U.S. government formed the Federal Trade Commission (FTC) to enforce antitrust laws and regulate interstate trade. antitrust laws laws that allow the federal government to break up monopolies

19. Protecting Business Agreements A contract can be written, verbal, or formed over a handshake. contract a legally enforceable agreement between two or more parties

20. Protecting Business Agreements It is easier to prove a breach of contract occurred if there is a written contract. breach of contract when one party fails to live up to the terms of a contract

21. Protecting Creative Properties A person creating an original work automatically holds the copyright to it, which lasts until 70 years after the owner’s death. copyright the legal right of artists to own their creations

22. Protecting Creative Properties A patent lasts for 20 years after the inventor filed his or her application with the U.S. Patent and Trademark Office. patent a legal grant for the sole right to own an invention

23. Protecting Creative Properties A trademark is protected from being copied if it is registered appropriately. trademark a name, symbol, or characteristic that identifies a product

24. Regulating the Production Process The government regulates the production process by passing laws that protect the environment and workers.

25. Regulating the Production Process The Food and Drug Administration (FDA) regulates the manufacture and sale of drugs in the United States.

26. You own a clothing shop in a state that has a low sales tax; neighboring states have a higher sales tax. When an out-of-state customer buys clothing at your shop, you do not add any tax. Many out-of- staters shop at your store and you do not know if they pay the tax they are supposed to pay. Decision Making Is it appropriate for you to advertise your shop in nearby out-of state towns? Explain your answer.

27. Answer Students might suggest that it is not appropriate to appear to be promoting tax avoidance. However, advertising your shop’s goods and services is appropriate, even if the area encompasses more than one state.

28. 1.What is the difference between interstate and intrastate commerce? Interstate commerce is business between states, overseen by the federal government. Intrastate commerce is business within a state, overseen by state or local governments.

29. 2.What are the ways that the government can deal with a monopoly? It can break it up, regulate it, or take it over.

30. 3.What kinds of property are protected by copyrights? musical compositions, song lyrics, books, movies, plays, and photographs

31. Chapter 11 The Role of Government in Our Economy Section 11.1 Government as Regulator End of