1. Egal Wizdum Abjetivs Abjektiv 1: Tada yer goin ta taak an opin buk qiz. Abjektiv 2: Then yer gonna lern all ab out Amerikas Fre Intarprize sistum! This iz all ab out how tha peeple n tha govment n biznes halp eech othar ta make Amerika grate! Abjektiv 3: Yall gonna hav a tes nex tym ta cee how smert yall is. Yall need ta studee rel goodn stuf!

2. The Basic Principles of Free Enterprise Several key characteristics make up the basic principles of free enterprise. 1. Profit Motive 2. Private property rights 3. Voluntary exchange 4. Competition This guy built his own airplane and didn’t have any extra parts left over

3. The Consumer’s Role A fundamental purpose of the free enterprise system Consumer sovereignty: people decide the types of goods and service produced (they are the rulers of the free enterprise system)

4. The Government’s Role Americans expect the government to protect them from potential problems that arise from the production of various products or the products themselves. 1.Protector 2.Provider 3.Regulator

5. Economic and Social Goals (3.2) Economic Freedom-freedom to make own economic decisions Economic Efficiency-Maximizing using scarce resources in an efficient manner Economic Equity-making the economy as fair as possible-minimum wage is an example Economic Security-protection against adverse economic conditions-Social Security and Medicare

6. Economic and Social Goals Full Employment-for those able to work Price Stability-protection against inflation if you’re on a fixed income. Economic Growth-the hope for a better life in the future.

7. Tracking Business Cycles Macroeconomics is the study of the behavior and decision making of entire economies. Microeconomics is the study of behavior and decisions of small units, such as individuals, families, and businesses. A business cycle is a period of a macroeconomic expansion followed by a period of contraction. May last less than a year or many years. One measure of a nation’s macroeconomy is gross domestic product (GDP). GDP is the total value of all final goods and services produced in a particular economy. Technology helps an economy become stronger and more efficient. Technology is the process to produce a good or service

8. Public Goods Funding of public good (a shared good or service for which it would be impractical to make consumers pay individually and to exclude non- payers: examples roads, a dam, etc) via public sector (government) A person who consumes a good or service but does not pay for it is called free rider

9. Externalities –The building of a new dam and creation of a lake generates: Positive Externalities: An economic side effect that generates unexpected benefits. –A possible source of hydroelectric power –Swimming –Boating –Fishing –Lakefront views Negative Externalities –Loss of wildlife habitat due to flooding –Disruption of fish migration along the river –Overcrowding due to tourism –Noise from racing boats and other watercraft

10. Providing a Safety Net (3.4) What role does the government play in fighting poverty? What government programs attempt to aid those facing poverty?

11. The Poverty Problem The poverty threshold is an income level below that which is needed to support families or households. The poverty threshold is determined by the federal government and is adjusted periodically. Welfare is a general term that refers to government aid to the poor. 2=$10,294 3=$16,079 4=$20,614 5=$24,382 6=$27,560

12. Redistribution Programs Cash transfers are direct payments of money to eligible people. Types: Temporary Assistance for Needy Families (TANF) direct payment (cash transfer) of money which replaced welfare Social Security: Provides retirement and monetary benefits for the elderly and disabled Unemployment compensation (monetary payments for those who have been laid off) Workers’ Compensation (for injured/disabled workers)

13. Other Redistribution Programs Besides cash transfers, other redistribution programs include: In-kind benefits Medical benefits Health insurance (Medicare) (Medicaid). Education benefits Federal, state, and local governments all provide educational opportunities

14. Next Time Unit 1 Test over chapters 1-3