1. JA Economics
Chapter 2

2. Free Enterprise Page 16 Free to make choices
Make the choice they believe offer them the most benefits
Gets it’s strength and support from 6 pillars

3. Page 17
FREE enterprise
Private Property

4. Page 17
Private Property
Resource/product owned by individuals or businesses
Protected by the U.S. constitution
Businesses have an incentive to maintain their property

5. Page 17
FREE enterprise
Private Property
Specialization

6. Specialization Page 17 Businesses and people
One product or a few parts of one product
Contributes to higher wages and profits

7. FREE enterprise Private Property Specialization Page 18
Voluntary exchange
Specialization

8. Voluntary Exchange Page 18 Because of specialization
No one person or business makes one entire product
Everyone is dependent on other people

9. FREE enterprise Private Property The Price System Specialization
Page 18
FREE enterprise
Private Property
Voluntary exchange
The Price System
Specialization

10. Page 18-19
The Price System
Buyers and sellers look towards the price to send them a message
Provides incentives
Businesses have a desire to make a profit

11. Page 18-19
The Price System
Price doesn’t determine all economic behavior
Values
Charity
Opportunity
Convenience, service, loyalty, quality etc

12. FREE enterprise Private Property The Price System Specialization
Page 16
FREE enterprise
Market competition
Private Property
Voluntary exchange
The Price System
Specialization

13. Page 20
Market Competition
Define Market
Resources
Products
Scarcity

14. FREE enterprise entrepreneurship Private Property The Price System
Page 16
FREE enterprise
Market competition
Private Property
Voluntary exchange
entrepreneurship
The Price System
Specialization

15. Entrepreneurship Page 21 Helps the economy grow and change
Three characteristics of an entrepreneur
Innovative thinking
Management skills
Risk taker
Page 15 in the study guide

16. Economic Systems Page 22 Market system (free enterprise)
Command system
Traditional system
Mixed – no pure form

17. Economic Models Page 23 Represent the real world
Descriptive, predictive and ideal
Want-satisfaction chain in chapter 1
The circular flow of money, resources and products.

18. Goods and Services
Market
G & S
Goods and Services
households
Production
Resources
Market
Resources
Resources

19. Circular flow of money
How it grows
How it shrinks

20. Adam Smith Born in Scotland in 1723 University of Glasgow at age 14
Economy evolved
People traded with once another

21. Adam Smith Born in Scotland in 1723 University of Glasgow at age 14
Economy evolved
People traded with once another