3-1: Advantages of free enterprise

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.

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

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.

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

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

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

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

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.