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maintain a profit x Prices are important in making the supply and demand system work correctly. x Individuals and enterprises are free to set their own financial goals, including the ability to choose what kind of work they would like to do Source: Private Enterprise. (Economics LAP 15: Career-Sustaining Level). (1998). Columbus, OH: Marketing Education Resource Center. Determine factors affecting business risk. Risk is the possibility of incurring a loss. Economic risks are those that can result in a financial loss. Pure risk is one that presents the chance of loss but no opportunity for gain. Speculative risks offer the chance to either gain or lose. Some risks are controllable, while others are not. Likewise, you can insure some risks while others cannot be insured. To manage risks, they can be avoided, transferred, insured, or assumed. Source: Dlabay, L. T., Burrow, J. L., & Kleindl, B. (2009). Intro to Business (7th ed.). Mason, OH: South-Western Cengage Learning. Determine the relationship between government and business. The government serves as both a protector and a regulator of business in a free market economy. It serves to protect business property, enforce contracts and settle disagreements through the courts, and collect taxes on the products business sell. As a regulator, government enacts and enforces laws to prohibit certain behaviors, control business activities, and require certain standards. Examples of such laws include laws to control monopolies, set product safety standards, and regulate prices. The government also serves the following purposes to society through intervention in business: Provide public goods, Improve public welfare, Protect public health, Stabilize the economy, Protect specific businesses or industries, Conserve the environment, Protect consumers, Preserve competition, and Regulate workplace conditions. Government agencies have been set up to monitor such business activities, including the Food and Drug Administration (FDA) and the Federal Trade Commission (FTC). Source: Government and Business. (Economics LAP 16: Career-Sustaining Level). (1993). Columbus, OH: Marketing Education Resource Center. Describe the nature of taxes.