Transcript Topic 3 - PBworks

Topic 4
The United States
Economic System
Why can we call it a “mixed”
economic system?
 People
& firms are mostly
free, but we have government
interference in economy
What is Everyone’s Role?
The Entrepreneur
Organize & manage land, labor, & capital
 Search for profit
 Bring new products to market
 Increase competition


Lower prices
• Expanding the market (advertising, international, target market)
• Customer Service
• Customizing Product
• Adapting to new technology
What characteristics of Free
Enterprise do you see here?
Explain how they relate.
• Efficient Production
• Uniqueness
• Reliability
• Affordable
• Good employee benefits - keeps them happy and working
• Specialization
The Consumer

“Consumer
sovereignty: to
vote with their
dollars
 To
say what is
& isn’t
produced
The Government
To protect consumer; laws
 Provide goods & services; education,
national defense, welfare
 Regulate; preserve competition
 Promote national goals; freedom,
efficiency, growth, & stability

What is Free Enterprise?
Firms are free to operate for profit w/o gov’t
interference beyond necessary regulation to
protect public interest
4 Characteristics of Free
Enterprise
Economic Freedom; both individuals &
business take chances & risks
 Voluntary Exchange; freely & willingly
engage in market transactions
 Private Property; people have the right &
privilege to control possessions
 Profit motive; to risk savings on ventures in
hopes of financial gain

Economic & Social Goals
Economic Freedom: make own decisions
 Economic Efficiency: Not wasting the
factors of production



Ex. Record albums vs. CD’s
Economic Equity: Equal pay for equal
work; no discrimination
Economic Security: protection against
economic illnesses; layoffs, injury
 Social Security
 Welfare
 Full Employment: provide as many jobs
as possible; Unemployment ONLY
between 4% and 6%

Price Stability: gives certainty in prices;
can expect inflation, protect fixed income
individuals
 Economic Growth: more $, more jobs,
more goods
