Define the following Key Terms in your notebook
Define the following Key Terms in your notebook. Capitalism Free Enterprise Profit Motive Voluntary Exchange They are all in the back of your book. You have about 8 minutes. GO!!!
Chapter 2 Section 3
Economic Freedom Voluntary Exchange Private Property Rights Profit Motive Competition
People have the ability to choose their profession Businesses can choose what to make and how much of it to make Business can also hire whom they want
Buyers and sellers freely and willingly make transactions Consumers can spend their money or not. Save it or not Sellers can sell their items or trade them Should I sell Air Fraga’s or should I trade them for some bling? ? ?
People and businesses own their own land What’s the alternative? Government Control of lands Includes things like homes and cars. Also things like talent and skills And people can use any of these things however they see fit. Gives people the incentive to work hard Something economies not seen in command or communist
People can risk their own assets in order to make a larger sum of money The profit motive is the driving force behind capitalism
What are some benefits of competition in the marketplace? What competition exists for the Air Fraga’s? The correct answer is NONE. You can’t compete with what you don’t understand.
Start new businesses Most fail – some experience some degree of success Who do entrepreneurs help? Consumers by providing a new good or service Laborers by providing new jobs The government by providing revenue in the form of taxes
What is a consumer? Considered to have the greatest power in the US economy Know as consumer sovereignty How do consumers exercise their power?
Justified only if the benefits outweigh the costs Because where does the government get its money? Viewed as a Protector Enforces Laws False Advertising, etc. Provider and Consumer Regulator Preserving competition Oversees interstate commerce, building codes Promoter of National Goals Ending Child labor, minimum wage, equal pay, Social Security, Fair Hiring Practices
The best description of our economy is: A mixed economy (a. k. a. – modified private enterprise) Elements of all three types of Economies
Read page 53
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