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ECONOMICS

ECONOMICS. CH.2 : FREE ENTERPRISE IN THE U.S. 1. 4 PILLARS OF FREE ENTERPRISE?. PRIVATE PROPERTY PRICE SYSTEM COMPETITION ENTREPRENEURSHIP. 2. WHY ARE THEY SEEN AS PILLARS?. THEY SUPPORT OUR ECON. SYSTEM. WITHOUT THEM, OUR ECON. SYSTEM WOULD CRUMBLE.

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ECONOMICS

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  1. ECONOMICS CH.2: FREE ENTERPRISE IN THE U.S.

  2. 1. 4 PILLARS OF FREE ENTERPRISE? • PRIVATE PROPERTY • PRICE SYSTEM • COMPETITION • ENTREPRENEURSHIP

  3. 2. WHY ARE THEY SEEN AS PILLARS? • THEY SUPPORT OUR ECON. SYSTEM. • WITHOUT THEM, OUR ECON. SYSTEM WOULD CRUMBLE

  4. 3. HOW DOES PRIVATE PROPERTY ACT AS A PILLAR? • YOU CAN DO WHAT U WANT WITH IT AS LONG AS U USE IT EFFICIENTLY

  5. 4. WHAT 2 PURPOSES DOES THE PRICE SYS. SERVE? • INFORMATION CARRIER • INCENTIVES

  6. 5. WHY IS THERE COMPETITION? • ENSURES THAT WE AS CONSUMERS GET THE BEST QUALITY GOOD/SERVICE AT THE LOWEST POSSIBLE PRICE

  7. 6. DEFINE ENTREPRENEURSHIP?WHY ARE THEY IMPORTANT TO OUR ECONOMIC SYS.? • RISK-TAKERS WHO CREATE A NEW G/S OR EXPAND ON AN EXISTING ONE • THEY ARE A CATALYST THAT KICK-STARTS OUR ECONOMY AND ALLOW IT TO GROW AND EXPAND

  8. 7. DEFINE PROFIT? • INCOME OR REVENUE – COST OF PRODUCTION

  9. 8. HOW DO CONSUMERS COMPETE WITH EACH OTHER ? • WHOEVER HAS THE MOST MONEY GETS THE G/S

  10. 8. 2 WAYS IN WHICH PRODUCERS COMPETE WITH EACHOTHER? • FOR RESOURCES TO MAKE THE G/S AND FOR THE CONSUMER’S MONEY AFTER THE G/S HAS BEEN MADE

  11. 9. THE CIRCULAR FLOW Market for g/s G/S G/S Business income Consumer Household spending Household Business Resource spending Resource Owner Household income Resources Resources Market for resources

  12. Underoos Superman underwear (5 pack) JC Penny Underoos Superman Underwear (5 pack) Market 4 goods And services Lil’ Dom Velotta Goods/Services Goods/Services Hanes Corp. consumer Business Income ($5.00) Household Business Household Spending ($10.00) Resource Spending ($2.00/Hour) Resource Owner Household Income ($50.00/2 weeks) Resources (human-manual) Hu Flung Pu Market for resources Hu making my underwear Resources (human-manual) Hu F. Pu driving to work The Factory floor at Hanes Corp. (China Division)

  13. 16. DEFINE BARTER? TRADING 1 G/S FOR ANOTHER G/S

  14. 17. HOW DOES MONEY SERVE AS A MEDIUM OF EXCHANGE? • IT SERVES AS A WAY FOR CONSUMERS TO TRADE WITH PRODUCERS • ALL PRODUCERS NEED MONEY • THERE IS NO DISCREPENCY OVER WORTH

  15. 18. HOW DOES MONEY SERVE AS A STORE OF VALUE? • YOU CAN SAVE IT AND SPEND IT LATER • CAN YOU DO THIS WITH A CHEESEBURGER?

  16. 19. HOW DOES MONEY SERVE AS A MEASURE OF PRICES? • IT LETS CONSUMERS KNOW THE VALUE PLACED ON A G/S

  17. 20. WHY WAS MONEY INVENTED? (THERE ARE 2 SHORTCOMINGS OF BARTER) 1.) DESCREPANCY OVER VALUE/WORTH 2.) IT GOT VERY CONFUSING AND COMPLICATED

  18. One of your essay question options: A baker in a village trying to trade some of his bread for more baskets…

  19. HOW DOES $ SERVE AS A STOR OF VALUE?

  20. WHO JUST FARTED?C’MON…FESS UP?OH WAIT,IT WAS ME!OOPS, SORRY

  21. USING YOUR KNOWLEDGE OF THE CIRCULAR FLOW, WHAT IS THE BEST WAY FOR OUR ECONOMY TO PULL ITSELF OUT OF A RECESSION?

  22. THE FOLLOWING ARE 3 ESSAYS THAT WILL APPEAR ON THE TEST. YOU WILL CHOOSE ONE TO ANSWER

  23. ESSAY #1 • USING A FICTITIOUS SCENARIO WITH FICT. CHARACTERS, DESCRIBE A SPECIFIC EXAMPLE FOR EACH OF THE 2 MAJOR SHORTCOMINGS OF BARTER • 7 pts. – content/ 3 pts. – s/g

  24. ESSAY #2USING YOUR KNOWLEDGE OF THE CIRCULAR FLOW, WHAT IS THE BEST WAY FOR AN ECONOMY TO PULL ITSELF OUT OF A RECESSION?4 pts. – content3 pts. – essay structure3 pts. – s/g

  25. ESSAY #3USING YOUR KNOWLEDGE OF THE CIRCULAR FLOW, DESCRIBE WHAT WOULD HAPPEN TO THE LOCAL CIRCULAR FLOW RIGHT HERE IN RICHMOND HEIGHTS IF AN F5 TORNADO RIPPED THROUGH THE COMMUNITY AND DESTROYED 60% OF THE RESIDENTIAL AND COMMERCIAL PROPERTIES. GO STEP BY STEP THROUGH THE FLOW CULMINATING ON ITS EFFECT ON PEOPLE IN OTHER STATES OR COUNTRIES4 pts. – content3 pts. – essay structure3 pts. – s/g

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