1. 3-1: Advantages of free enterprise

2. What is a Free Enterprise System?
Capitalism: economic system based on private ownership of the factors of production
The system in the U.S.
Consumers are influenced by the desire to buy goods/services that satisfy their economic wants.

3. Free Enterprise
Definition: another name for capitalism; and economic system based on private ownership of productive resources.
Individual choices are the basis of a market economy

4. More on Free Enterprise…
Other characteristics:
1. People can form their own businesses.
2. Businesses determine how to use their scarce productive resources.
3. Consumers choose which goods/services they will buy.

5. How a Free Enterprise System Works
Private property is one of the fundamental freedoms in a capitalist economy
Open opportunity: the ability of everyone to enter and compete in the marketplace by free choice

6. Other Elements of Free Enterprise
Legal equality: this is when everyone has the same economic rights under the law
Free contract: for voluntary exchange to work, people must decide which legal agreements they want to enter into

7. What motivates people to start a business?
The key motivator is profit motive: incentive that encourages people to and organizations to improve their material well-being from economic activities

8. Question
1. Explain the role of competition in a free market system.

9. Pet Rock Get into groups of no more than 3 people
In groups develop a new fad product
Create an engaging description of the product
Create a prototype of the product
This could be a drawing or a model of the actual product
Does your product meet consumer wants
We will be presenting these to the class.