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:
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.
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
“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)
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)
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.
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
2. Money prices give incentives Price ^: consumers shop for bargains Price ^: businesses produce more goods and services
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)
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
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.