1.  Private Enterprise System  Role of the Individual as a Producer  Role of the Individual as a Consumer  Role of the Individual as a Citizen UNIT 1.02 KEY CHARACTERISTICS OF THE PRIVATE ENTERPRISE SYSTEM

2. An economic system that rewards firms for their ability to perceive the needs and demands of consumers  Capitalism  30 million US businesses in operation  3 main types of business 1.Sole Proprietors 2.Partnerships 3.Corporations  Fortune 500 Fortune 500 PRIVATE ENTERPRISE SYSTEM

3.  Role of the Individual as a Producer  Role of the Individual as a Consumer  Role of the Individual as a Citizen HOW DO BUSINESSES AND CONSUMERS INTERACT?

4.  Contribution to Economy  Goals – Things a person wants to accomplish, such as getting a college education, buying a car, or starting a business  Values – Things that are important to you in life  Standard of Living  Measure of how well people in a country live  Quality and quantity of wants and needs that are satisfied  Often determined by your choice of career  Career Choices  www.careercruising.com www.careercruising.com INDIVIDUAL AS A PRODUCER

5. Someone who takes a risk in starting a business to earn a profit  The bad news:  Over 1 million businesses start up in America each year  Over 500,000 close each year  Most start ups close within 16 months  The good news:  Average income for small business owner is $233,600 ENTREPRENEUR

6. The amount of money available to the business after all costs and expenses have been paid  How to increase profits?  Increase sales  Increase price  Decrease costs PROFIT

7.  Consumes goods and services  Vitale role in economic system  Buy/Not-Buy decision effects what goods and services are produced  Heavily targeted by businesses  Pay for Needs First  Food  Clothing  Shelter  Consumer Wants are a Huge Market! INDIVIDUAL AS A CONSUMER

8. GALLUP DAILY: U.S. CONSUMER SPENDING

9. HOUSEHOLD SPENDING BY CATEGORY

10.  Customer Service Key  70% of Americans are willing to spend 13% more with companies they believe provide excellent customer service  78% of consumers have bailed on a transaction because of poor customer service  Advocacy Groups  Protect people from corporate abuse (unsafe products, predatory lending, false advertising, etc.)  Prevention & Awareness (anti-smoking groups, parental advisory labels, etc.) STRENGTH OF THE CONSUMER

11.  Bill of Rights 1.Freedom of religion, speech, press, assembly, and petition. 2.Right to keep and bear arms in order to maintain a well regulated militia. 3.No quartering of soldiers. 4.Freedom from unreasonable searches and seizures. 5.Right to due process of law, freedom from self-incrimination, double jeopardy. 6.Rights of accused persons, e.g., right to a speedy and public trial. 7.Right of trial by jury in civil cases. 8.Freedom from excessive bail, cruel and unusual punishments. 9.Other rights of the people. 10.Powers reserved to the states. INDIVIDUAL AS A CITIZEN

12.  Vote  Pay Taxes  Obey the Law CITIZEN’S ECONOMIC RESPONSIBILITY

13. WHAT HAPPENS IF ECONOMIC RESPONSIBILITY IGNORED?