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AMERICAN FREE ENTERPRISE Taught by Professor Coleman.

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Presentation on theme: "AMERICAN FREE ENTERPRISE Taught by Professor Coleman."— Presentation transcript:

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2 AMERICAN FREE ENTERPRISE Taught by Professor Coleman

3 BELLRINGER  Define “land of opportunity”  Provide examples of family or community members who started up small businesses.

4 A TRADITION OF FREE ENTERPRISE  Why has America been such an economic success?  Open land  Natural resources  Uninterrupted flow of immigrants AND?

5 FREE ENTERPRISE The social and political commitment to giving people the freedom and flexibility to try out their business ideas and compete in the marketplace

6 CONSTITUTIONAL PROTECTION Property RightsTaxation  Can’t be taken from an individual except when there is a public reason  Government must pay fair value of property  Applies to businesses, too  Can only tax in ways Constitution allows  Congress can levy taxes  Direct taxes must be apportioned according to population  Guarantees the right to make binding contracts

7 BASIC PRINCIPLES OF FREE ENTERPRISE  Profit motive: force that encourages people and organizations to improve their natural well-being  Open opportunity: everyone can compete in the market place  Economic rights: legal equality, private property, free contract, voluntary exchange, and competition

8 ACTIVITY: BUILDING KEY CONCEPTS  Figure 3.1 Features of American Free Enterprise  Page 52  Choose one of these features and give an example from your own daily life.

9 ROLE OF THE CONSUMER  When consumers buy products, they signal to producers what to produce and how much to make  Also make wishes known by joining interest groups

10 ROLE OF THE GOVERNMENT  Information and Free Enterprise  Protecting Health, Safety, and Well-Being  Negative Effects of Regulation

11 ACTIVITY: FOR DOTS!!  Applying Economic Concepts, page 55

12 SECTION ASSESSMENT 1. Section 1 Assessment, pg. 55 2. Economic Profile: Alice Rivlin, pg. 56

13 BELLRINGER  Brainstorm a list of tasks performed by librarians  Prepare to compare/contrast this job with the job of a government economist.

14 TRACKING BUSINESS CYCLES MacroeconomicsMicroeconomics  Study of the behavior and decision making of entire economies  Study of the economic behavior and decision making of small units (individuals, families, households, business)

15 ACTIVITY: KNOW THE DIFFERENCE! (COMPARE/CONTRAST) MacroeconomicsMicroeconomics  How the banking system operates throughout the U.S.  How an individual bank tries to make a profit by receiving deposits and making loans

16 TRACKING BUSINESS CYCLES How is economic well- being measured? What’s a BUSINESS CYCLE?  Gross Domestic Product (GDP)  Total value of all final goods and services produced in an economy  Period of macroeconomic expansion followed by a period of contraction, or decline.

17 PROMOTING ECONOMIC GROWTH EmploymentGrowth  unemployment rate between 4% and 6% desirable  each generation should do better  measured by GDP

18 PROMOTING ECONOMIC GROWTH StabilityEconomic Citizenship  Gives consumers, producers, and investors confidence in the economy  Indicator #1: price levels  Indicator #2: Health of financial institutions  Do you expect your generation to have a higher standard of living than that of past generations?  DO YOUR PART! GET AN UNDERSTANDING OF MACROECONOMIC PROCESSES THAT SHAPE OUR FUTURES!

19 TECHNOLOGY AND PRODUCTIVITY Technological ProgressThe Government’s Role  Process used to produce a good or service  Improvements allow an economy to produce more output form same or smaller quantity of inputs, or resources  Morrill Acts of 1862 and 1890?  Land-grant schools (MIT, Texas A&M)?  NASA?  U.S. Patents?

20 ACTIVITY... BACK TO BELLRINGER Compare and contrast the job of a librarian to the job of a government economist.

21 SECTION 2 ASSESSMENT  Key Terms and Main Ideas, page 60, 1-6  Skills for Life: Analyzing Primary Sources, page 61, 1-3

22 BELLRINGER  Recall seeing a young child being asked to share something with another child. Did the child share willingly and fairly without the help of the parent?

23 PROVIDING PUBLIC GOODS  A shared good or service for which it would be inefficient or impractical (1) to make consumers pay individually and (2) to exclude nonpayers

24 COSTS & BENEFITS... FREE-RIDER PROBLEM  Benefit total cost (contribution)  Public goods financed by public sector  Private sector would have little incentive to produce public goods  Free riders don’t pay, but still benefit

25 MARKET FAILURES  Situation in which the market does not distribute resources efficiently

26 EXTERNALITIES  An economic side effect of a good or service that generates benefits or costs to someone other than the person deciding how much to produce or consume.  Video: Externalities Video: Externalities

27 EXTERNALITIES... Positive ExternalitiesNegative Externalities  Benefits too many people (not just those who paid for it)  Buying/updating an eyesore...  Generate unintended costs  Paper mill wastes pollute river, need to buy water- treatment

28 ACTIVITY – FOR DOTS!  Key Terms and Main Ideas, page 66, 1-3

29 ASSESSMENT  Decision Making on Page 66 (#6)  Answer in paragraph form

30 BELLRINGER What is your personal definition of poverty?

31 PROVIDING A SAFETY NET  Outline pages 67-70  You have 10 minutes.

32 VIDEO: U.S. POVERTY  U.S. POVERTY (TAVIS SMILEY & DR. CORNEL WEST) U.S. POVERTY (TAVIS SMILEY & DR. CORNEL WEST  Record 15 salient points from the video

33 SECTION 4 ASSESSMENT  Key Terms and Main Ideas, pg. 70, 1-4

34 CHAPTER 3 EXAM For: Chapter 3 Self-Test Visit: PHSchool.com Web Code: mna-1031 Print & Submit


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