Basics of Economics – Day 7 Goals: Free Enterprise - Students will Define free enterprise. Understand how free enterprise answers the three economic questions. Understand the five features of free enterprise. Understand the circular flow of economic activity. Begin a written group project on the topic of free enterprise and modern implications.
Free Enterprise Definition: An economic system in which private business operates in competition and largely free of government control.
How does free enterprise answer the three economic questions? What goods will be produced? Business firms will produce the goods people want to buy. How will these goods be produced? The individuals who own and manage the business firms decide how goods will be produced. For whom will the goods be produced? In a free enterprise system, goods are produced for those people who are willing and able to buy them.
Five Features of Free Enterprise Private Property Individuals have the right to own property for themselves. Freedom to Choose Workers, purchasers, and manufactures all have the freedom to work where they want, buy what they want, and produce what they want. Voluntary Exchange Individuals have the right to make exchanges or trades that they feel make them better off. Competition Individuals are free to compete with others as they choose. Economic Incentives An incentive is something that motivates a person toward action. In a free enterprise system, generally money is the motivator. (Although not always only money.)
Free Enterprise Economy Project Give assignment Get into groups Library second half of period