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T. Seay BHS.  The American economic system is very often called the “free enterprise system.” It is also known as a “market economy.” The central question.

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Presentation on theme: "T. Seay BHS.  The American economic system is very often called the “free enterprise system.” It is also known as a “market economy.” The central question."— Presentation transcript:

1 T. Seay BHS

2  The American economic system is very often called the “free enterprise system.” It is also known as a “market economy.” The central question for this discussion asks whether or not the American system actually lives up to its name. Be prepared to take a position and to defend it.

3  BR: Copy down the following quotation in your NB. Then write a short paragraph that tells  A. What you think the quotation means  B. Whether you agree or disagree with the quotation, and why  C. Examples from today that either support or disprove the quotation

4 “No man is wholly free. He is a slave to wealth, or to fortune, or the laws, or the people restrain him from acting according to his will alone.” --Euripedes (Greek dramatist)

5  The “Free Enterprise” system in the U.S.  Main idea: The U.S. economic system is based on “Four pillars of free enterprise”: Private property, price system, market competition, entrepreneurship)

6  I. Private Property Rights  A. Granted by the U.S. Constitution  B. Make each owner responsible for his/her own property  If it breaks, the owner fixes it.  If owner wants to sell it, s/he can.

7  II. Price System  A. Essential to market economy  Money is the MEDIUM OF EXCHANGE (instead of barter)  MONEY PRICES show the value that consumers/businesses place on goods and services  Money price too high = NO BUY; Money price too low = too many PRODUCTS GO  Businesses add the cost of labor and other resources used to make goods and services

8  2. Money prices give incentives  Price ^: consumers shop for bargains  Price ^: businesses produce more goods and services

9  III. Market Competition  A. People compete because resources are scarce.  B. Resource competition  1. Resource buyers compete with money  Workers  Machinery 2. Resource sellers compete by making resources better  workers (education)

10  C. Product competition 1. consumers (buyers) spend money 2. Sellers (businesses)  Offer sales  Lower prices over all 3. Profit is the main idea for everyone involved in the market

11  IV. Entrepreneurship A. For success, you have to be  1. ready to take risks  2. creative  3. quick and adaptive  4. a good manager  5. competitive B. Success is not guaranteed.


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