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JA Economics. Chapter 2. Page 16. Free Enterprise. Free to make choices Make the choice they believe offer them the most benefits Gets it’s strength and support from 6 pillars. Page 17. FREE enterprise. Private Property. Page 17. Private Property. - PowerPoint PPT Presentation
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JA EconomicsChapter 2
Free Enterprise Free to make choices
Make the choice they believe offer them the most benefits
Gets it’s strength and support from 6 pillars
Page 16
PRIV
ATE
PRO
PERT
YFREE ENTERPRISE
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
Page 17
PRIV
ATE
PRO
PERT
Y
SPEC
IALI
ZATI
ON
FREE ENTERPRISEPage 17
Specialization Businesses and people
One product or a few parts of one product
Contributes to higher wages and profits
Page 17
PRIV
ATE
PRO
PERT
Y
SPEC
IALI
ZATI
ON
VOLU
NTA
RY
EXCH
ANG
E
FREE ENTERPRISEPage 18
Voluntary Exchange Because of specialization
No one person or business makes one entire product
Everyone is dependent on other people
Page 18
PRIV
ATE
PRO
PERT
Y
SPEC
IALI
ZATI
ON
THE
PRIC
E SY
STEM
VOLU
NTA
RY
EXCH
ANG
E
FREE ENTERPRISEPage 18
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
Page 18-19
The Price System Price doesn’t determine all economic
behavior
Values Charity Opportunity Convenience, service, loyalty, quality etc
Page 18-19
PRIV
ATE
PRO
PERT
Y
SPEC
IALI
ZATI
ON
THE
PRIC
E SY
STEM
VOLU
NTA
RY
EXCH
ANG
E
MAR
KET
COM
PETI
TIO
NFREE ENTERPRISEPage 16
Market Competition Define Market
Resources
Products
Scarcity
Page 20
PRIV
ATE
PRO
PERT
Y
SPEC
IALI
ZATI
ON
THE
PRIC
E SY
STEM
VOLU
NTA
RY
EXCH
ANG
E
MAR
KET
COM
PETI
TIO
N
ENTR
EPRE
NEU
RSH
IP
FREE ENTERPRISEPage 16
Entrepreneurship Helps the economy grow and change
Three characteristics of an entrepreneur Innovative thinking Management skills Risk taker
Page 15 in the study guide
Page 21
Economic Systems Market system (free enterprise)
Command system
Traditional system
Mixed – no pure form
Page 22
Economic Models Represent the real world
Descriptive, predictive and ideal
Want-satisfaction chain in chapter 1
The circular flow of money, resources and products.
Page 23
Goods and Servic
es Goods and Services
Resources Reso
urces
households
MarketG & S
Market
Resources
Production
Circular flow of money How it grows
How it shrinks
Adam Smith Born in Scotland in 1723
University of Glasgow at age 14
Economy evolved People traded with once another
Adam Smith Born in Scotland in 1723
University of Glasgow at age 14
Economy evolved People traded with once another
