AIM: IS THE FREE ENTERPRISE SYSTEM REALLY FREE? Do Now: Think of a product that you use that was developed or modified as a result of some change in the marketplace. -Would this product have been developed in a command economy? Why or why not? -How does this product demonstrate a strength of the free enterprise system?

Economic Systems

Free Enterprise If an economy has both capitalism and free markets Resources are privately owned Competition is allowed to flourish with a minimum of government interference Characteristics 1. Economic Freedom 2. Voluntary exchange 3. Private property rights 4. The profit motive 5. Competition

Benefits of Free Enterprise Capitalism Individual Freedom A Variety of Goods Adapting to Change Promoting Progress Creation of Wealth

Disadvantages of Free Enterprise Capitalism Uneven Economic Growth Growing Gaps Between Rich and Poor Large “Supply-Side” Tendencies Rights and Responsibilities of Business

American Economic and Social Goals 1. Economic Freedom 2. Economic Efficiency 3. Economic Equity 4. Economic Security 5. Full Employment 6. Price Stability 7. Economic Growth

Activity Directions What does this mean in your own words? Provide an example in present-day America. Sketch an image reflecting your advantage or disadvantage.

AIM: HOW DO THE CHOICES THAT BUYERS AND SELLERS MAKE IMPACT THE MARKET? Do Now:

Individuals & Businesses in the Market FACTOR MARKET Resources (land, labor, capital, entrepreneurship) are bought and sold PRODUCT MARKET Goods and services are bought and sold

Individuals & Businesses in the Market Given that the resources of individuals (and societies) are limited, decisions as to what goods and services will be produced and to whom to sell one’s resources are driven by numerous factors including a desire to derive the maximum benefit and thus the most efficient allocation of those resources.

Individuals & Businesses in the Market The choices of buyers and sellers in the marketplace determine supply and demand, market prices, allocation of scarce resources, and the goods and services that are produced.

Individuals & Businesses in the Market Consumers influence product availability and price through their purchasing power in the product market in a perfect world. Product market supply and demand determine product availability and pricing.

Individuals & Businesses in the Market Businesses choose what to supply in the product market based on product market prices, available technology, and prices of factors of production. The prices of those factors are determined based on supply and demand in the factor market.

The Labor Market The supply and demand of each factor market is directly related to employment. Debates surround various ways to minimize unemployment (frictional, structural, cyclical).

AIM: HOW DO ECONOMIC INDICATORS SHAPE THE DECISIONS THAT INDIVIDUALS AND BUSINESSES MAKE? DO NOW: What do you buy yourself when you’re happy/celebrating? What do you buy yourself when you’re upset?

NOTES: Please click on the following link and take notes on the economic indicators listed. You have 25 minutes (it will be timed and there may or may not be a quiz involved.) economic-indicators-what-to-watch-and-why

Economic Indicators Leading IndicatorsLagging Indicators

Activity Directions: 1. Pick an economic indicator from the previous slide/graphic (or find a new one, ex: Big Mac Index, Online Dating, Toughness of Marine Ads, etc.) 2. Research historic/economic meaning of indicator. 3. Create a digital poster to express what this indicator represents and its implications for our economy (the more creative this is, the better you will score) 4. completed work to