Mixed Economy: Elements of the three different economic systems in one economy; the most common economic system Ex.) US Market-business competition, private property, profit Command-government regulated agencies, schools, USPS Traditional-schools still follow an agricultural schedule

ADVANTAGESDISADVANTAGES FREEDOMSGOVERNMENT REGULATIONS BUY WHAT WE WANTLIMITED RESOURCES NO LIMITS TO WHAT YOU CAN HAVE TAXES WELFARE SYSTEMUNEQUAL DISTRIBUTION OF WEALTH

Two major trends in modern economies: 1. Many economies moving away from Command Systems and privatizing business. 2. Globalization by getting foreign investors.

FREE ENTERPRISE SYSTEM

What is the difference between open opportunity and legal equality? Open opportunity allows people to participate in the market by free choice Legal equality-everyone has the same economic rights

What besides profit, if anything, might motivate a person to start a business? Non profits fulfill a social need and some people create enterprises for that as well

What fads like the pet rock have you seen come and go? Pokemon Tickle Me Elmo Cabbage Patch Kids Virtual Pets Beanie Babies Silly Bands

List and explain the legal rights built into the free enterprise system. Open opportunity: everyone has the ability to enter the market Free contract: everyone has the right to decide which contracts they enter into Legal equality: everyone has the same economic rights

Explain the chain and effect reactions since the mid-1990s that led to the lower book prices for American consumers. Small book stores 1995 Borders and Barnes & Noble compete Pass along major savings Amazon Lower prices; access to everything More websites

GOALS OF THE FREE ENTERPRISE SYSTEM: 1.) Maintain economic freedom!

2.) Make the best use of scarce resources.

3.) The government tries to ensure that every citizen shares in the benefits.

4.) Economic stability – employment and stable prices.

5.) Economic security (insurance)

6.) Economic growth

MILTON FRIEDMAN MAJOR WORKS: CAPITALISM AND FREEDOM FREE TO CHOOSE BRIGHT PROMISES, DISMAL PERFORMANCES: AN ECONOMISTS PROTEST

MILTON FRIEDMAN HIS BELIEFS ON GOV’T. ROLE: MARKET SHOULD BE FREE TO OPERATE IN ALL FIELDS & PROFESSIONS (LAW, MEDICINE), CUTTING BACK ON REGULATIONS

MILTON FRIEDMAN BELIEFS ON LICENSING: LOWERING THE LICENSING STANDARDS WILL BRING MORE OF THESE PROFESSIONS INTO THE MARKET

MILTON FRIEDMAN ACCOMPLISHMENTS: ECONOMIC ADVISOR TO NIXON & REAGAN AND TO BRITISH PRIME MINISTER MARGARET THATCHER

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