1. On page 21, respond to the following Describe an item that used to be in demand and is no longer in demand Describe what happened to the price on each occasion

2. Foldable Take your sheet of paper and create a 2-do foldable On the left door (outside) write “Capitali$m” On right door (outside) write “Effects of Cottage Industry” Effects of Cottage Industry Capitali$m

3. Capitalism Economic System based on private ownership, free competition, and profit Cottage Industry is an example of early capitalism Famous 16 th century Scottish economist, Adam Smith, wrote “Wealth of Nations” in which he described an economy that was free to govern itself by the natural forces of supply and demand Increase supply – prices go down Increase in demand – prices go up Called his philosophy ‘laisse-faire’ meaning hands off

4. Private ownership: government, king, etc DO NOT OWN THE FACTORS OF PRODUCTION The Factors of Production (land, labor and capital… machines and $$) are PRIVATELY OWNED BY PRIVATE CITIZENS, NOT THE GOVERNMENT Free Competition: there is little to no regulation, respond to laws of supply and demand Profit: goods/services are bought and sold to increase wealth.

5. Effects of the Cottage Industry Merchants benefitted from not needing to buy equipment Merchant entrepreneurs received most of the profits Workers could work in their homes, pace their work as they saw fit (based on the seasons, around church holidays in the village, etc) Rural workers received benefits as well; helped families avoid starvation during bad crop harvests Rural homes, tended to be small, crowded and poorly ventilated, thus working conditions were often unpleasant Merchants were dependent upon separate locations to complete tasks to create finished product

6. Assignment Tweet me the answer to the question: “What is one thing that could be done to make the cottage industry better” use #indrev @msDworldciv