2. Title: Market Economy EQ: How Does a Market Economy Work ? Cornell Notes

3. *Adam Smith Scottish Philosopher & EconomistScottish Philosopher & Economist Believed in a free economy/enterpriseBelieved in a free economy/enterprise

4. Market/Capitalist Economy: A private ownership (a person owns a business) of production with little or no gov’t control.A private ownership (a person owns a business) of production with little or no gov’t control. Individual companies decide:Individual companies decide: How and what to produce & the $ of product.How and what to produce & the $ of product.

5. *Free Enterprise We are free to open any business.We are free to open any business.

6. Command Economy (Communism): A government that controls its economy:A government that controls its economy: What to produce, how to produce & price for goods.What to produce, how to produce & price for goods. Gov’t owns property.Gov’t owns property.

7. *Supply The amount of a good or service that producers are willing & able to offer for sale.The amount of a good or service that producers are willing & able to offer for sale.

8. *Demand Quantity of a good or service that buyers are willing & able to buy.Quantity of a good or service that buyers are willing & able to buy.

9. *Private Property Belongs to the people & not the gov’t.Belongs to the people & not the gov’t.

10. *Limited Gov’t Gov’t does not put too many controls on what the business produces & the prices they will set.Gov’t does not put too many controls on what the business produces & the prices they will set.

11. *Competition: Gives consumers a choice at the products they will buy.Gives consumers a choice at the products they will buy. Forces people to make better products to stay in business.Forces people to make better products to stay in business.

12. * Property Rights If property belongs to you, its value impacts you.If property belongs to you, its value impacts you.

13. Incentives Benefit or reward if you care for your home…if so, the more it is worth.Benefit or reward if you care for your home…if so, the more it is worth.

14. *Eminent Domain: 5 th amendment = allows gov’t to take private property for public use only.5 th amendment = allows gov’t to take private property for public use only.

15. Summary!! Summary!! Today’s Topic,______________________, dealt with___________________________. One of the key ideas was_______________. This is important because_______________. Another key idea was ________________, which was important because___________. These ideas are useful/important because____________________________.

16. Creating Own Questions I Do, We Do, You Do!I Do, We Do, You Do!