1. Supply and Demand

3. What is free enterprise
system in which economic forces work automatically and naturally without mercantilist laws and regulations

4. Why is private property so important
A system of private property means that individuals and private businesses, not the government, own most land and capital goods. The right to own private property (property rights) provides incentives to owners to take care of the property and to invest in it and therefore encourages the efficient allocation of resources and economic growth.

6. Based upon the belief of free enterprise: the idea that private individuals or groups have the right to own property or businesses make a profit with only limited government interference
Individuals and private groups make decisions about what to produce
People, as shoppers, choose what products they will or will not buy

7. Businesses make more of what they believe consumers want
People are free to choose what jobs they will do and for whom they will work
With free decision making and incentives, businesses will innovate and produce products people want

9. Definition-law of competition
As manufacturers compete with each other to sell their products, they must reduce prices; manufacturers that cut prices to much might lose money and even go out of business; supply then tends to go down and prices rise; the most efficient manufacturers will survive

10. Competition keeps prices in line with the costs of production
Competition keeps prices in line with the costs of production. If one seller raises prices in an attempt to earn excessive profits, competition from other sellers (who also want to earn profits) will drive the prices down.

11. Pure competition assumes that sellers can easily leave one business and easily enter another one. Competition among buyers prevents any one buyer from controlling prices by refusing to buy some thing.

12. Markets bring together buyers and sellers of goods and services
Markets bring together buyers and sellers of goods and services. In a market system, the forces of supply and demand, not the government, determine prices. If there is a surplus of goods available at the going price, the price will fall. If there is a shortage of goods available at the going price, the price will rise.

13. Businesses follow their own self-interest in the pursuit of profit by competing for consumer’s money / Each business tries to produce goods or services that are better and less expensive than those of competitors

14. Consumers compete to buy the best goods at the lowest prices / this competition shapes the market by affecting what businesses are able to sell

20. What is law of wages
stated that supply and demand determined wages; when labor is plentiful, wages remain low; when labor is scarce, wages rise

21. Video Segments https://www.youtube.com/watch?v=E4YlOyugato

22. Self-interest
Self-interest refers to actions that elicit the most personal benefit. Adam Smith, the father of modern economics, explains that the best economic benefit for all can usually be accomplished when individuals act in their own self-interest. His explanation of the invisible hand reveals that when dozens or even thousands act in their own self-interest, goods and services are created that benefit consumers and producers. Read more: Self-Interest  interest.asp#ixzz50yEzinur 

23. Self-interest drives people to get the best jobs they can, to get the most for their money and to earn the most profit in their businesses. When every one does this, resources are used to produce the goods and services every one wants, which is a desirable outcome.

24. Self-interest is not the same as selfishness and does not mean that people cannot and do not help others. As Adam Smith pointed out in 1776 in his book The Wealth of Nations, people acting in their own self-interest are guided as if by an “invisible hand” to do what is best for society as a whole.

30. Although market economies can operate in most respects without government interference, there are important roles for government at play. At a minimum, government is needed to define and enforce property rights and to provide some goods and services such as national defense that are provided efficiently by markets.

31. Government should not interfere in the economy because competition creates efficiency in business and government involvement in the economy also threatens peoples’ civil liberties

32. Questions to ponder