2What is a Free Enterprise System? Capitalism: economic system based on private ownership of the factors of productionThe system in the U.S.Consumers are influenced by the desire to buy goods/services that satisfy their economic wants.
3Free EnterpriseDefinition: another name for capitalism; and economic system based on private ownership of productive resources.Individual choices are the basis of a market economy
4More 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.
5How a Free Enterprise System Works Private property is one of the fundamental freedoms in a capitalist economyOpen opportunity: the ability of everyone to enter and compete in the marketplace by free choice
6Other Elements of Free Enterprise Legal equality: this is when everyone has the same economic rights under the lawFree contract: for voluntary exchange to work, people must decide which legal agreements they want to enter into
7What 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
8Question1. Explain the role of competition in a free market system.
9Pet Rock Get into groups of no more than 3 people In groups develop a new fad productCreate an engaging description of the productCreate a prototype of the productThis could be a drawing or a model of the actual productDoes your product meet consumer wantsWe will be presenting these to the class.