1. Organizing an economy

2. There are three main way that countries organize their economies

3. Market economy: The collective decisions of the consumers and the producers control the shape of the economy Buyers establish demands that the producers try to meet Consumers buy from the producers and this makes the economy America is an example of this

4. Advantages/Disadvantages: Advantage Innovation (new technologies) Freedom Responsibility Efficiency Disadvantages Lack of planned direction and control Boom and Bust Social problems

5. Centrally planned economy: A central authority (Government) answers the basic economic questions They determine what and how much will be produced There is limited consumer choice The former Soviet Union is a good example of this

6. Mixed Economy: Combines parts of each of the other two systems Market forces, and consumer demand shape the economy…But! The Government often owns essential businesses to ensure that they are operated responsibly Canada is a good example of this type of economy

7. Entrepreneurs Living the American Dream?

8. What are entrepreneurs? They are people who are willing to take risks and compete in a market economy Often they have an innovation that they then market to generate capital and increase sales This innovation may be a technology or simply a new idea Their success is often dependent on how well they are able to market it

9. Examples: McDonalds Restaurants –This started with a small drive in restaurant in California 1937 –The brothers did research and found that 80% of business came from Hamburgers –They specialized, cutting their menu, and profited –Their trade mark became speed and consistency –Ray Kroc sold this idea nation wide then world wide creating the franchise we know today

10. McDonalds summary: Innovation: Specialization (hamburgers only), speed and consistency Marketing: The opening in the market for ‘fast food’ Ray Kroc and the idea of selling franchises to the entire country and then the world

11. Examples continued: Apple Computers –Two computer club guys get the idea of creating a small home computer 1976 –Jobs and Woz created Apple computers, Jobs made the computers and Woz marketed them –By 1978 they are selling 7600 computers –1984 they hit 1 Billion in sales

12. Apple Computers summary: Innovation: The personal computer Marketing: Seeing that there would be a market for a personal computer Convincing the world that they need a computer in the home, making the computer affordable