1. Capitalism

2. Economics Role of Economic Systems
What and how much should be produced
How goods/services should be produced
Who gets the good/services produced

3. Capitalism* 6 main characteristics
Economic Freedom – Great opportunity /improved life
Markets – prices for goods and services are set freely by consent between vendors and consumers
Voluntary Exchanges – Buyers/Sellers willing buying/selling
Profit Motive – Make money as motivation
Competition – more than 1 person selling
Private Property Rights – Individuals can control, benefit and transfer property.

4. Capitalism*
Founder of modern economics: Adam Smith. Wrote Wealth of Nations (1776)
Societies progress when people work out of self-interest/well-being
Government’s should use laissez-faire economics. (HANDS-OFF or non-interference)
Gov’ts should limit themselves to actions that promote competition.

5. History of Cap.* Free Enterprise in the United States
Government encourages competition. Easy to open a business in general
The government may regulate certain aspects of business. (i.e. – Food & Drug Act/ Social Security/ Meat Inspection Act).
Why are we okay with this?

6. Example
Big Bird goes out and attempts to buy the new Tupac CD to crank it for a party this weekend. He goes to Store #1 and finds it is sold out. He goes to Store #2 and finds it sold for $35. He goes to Store #3 and finds that they have it but at double the cost of Store #2.
Does this fit the example of capitalism? If so, what principles? If not, why not?