1. New Methods of Business Do Now: How did the Industrial Revolution affect the lives of children?

4. Pre-Industrialization Cottage industry: Products made in small shops or in peoples’ homes – Also known as the Domestic system

5. Pre-Industrial Businesses Sole Proprietorships – businesses owned by individuals Partnerships – Some businesses were owned by 2 or 3 people This changed because few individuals could afford machinery required for factories

6. Corporations individuals buy shares of stock/ receive dividends this makes mass production affordable this limits the liability and responsibility for what happens stock holders elect directors to decide corporate policies directors hire managers to run the business

7. Innovations Division of Labor Division of Labor: a different person performs each step in making a product Assembly Line: Assembly Line: product moves from one work station to the next; workers do not move Interchangeable Parts: Interchangeable Parts: identical parts allowed unskilled workers to make goods

8. Capitalism Economic system in which the means of production and distribution are privately or corporately owned Based on the belief that individuals, rather than government should own factors of production Capitalism also allowed corporations to buy out small companies Corps. created monopoly - control the production & price of a product to avoid competition.

9. Monopolies Two kinds: – Horizontal monopolies Someone owns all of one kind of business Example: someone owns all the railroads and canals so you have to do business with them if you want to transport goods – Vertical monopolies When one person/company owns everything needed to produce a finished product Example: A car company that expands into tire manufacturing would be an example of a vertical monopoly.

10. Laissez-Faire Economics Means “hands-off” Allowing businesses to run with little or no government interference

11. Economic Thinkers Adam Smith – Created the Theory of Free Enterprise - Every person should have freedom to start a business – Private competition should be free from government regulation Thomas Malthus – Believed people would multiply faster than the food supply, so poverty was inevitable – Eventually proven wrong, but not before many accepted his ideas.

12. Captains of IndustryRobber Baron

14. Tremendous Sacrifice