Scarcity, Economic Systems, and Free Enterprise

1. Economics Mr. Biddle Scarcity, Economic Systems, and Free Enterprise

2. Economics • Economics: the attempt to satisfy seemingly unlimited wants and needs using limited resources

3. Scarcity • Imbalance between unlimited wants and limited resources available for satisfying those wants. • Not having enough resources to produce all the things people would like to have.

4. Scarcity Chart

5. Economic Systems • Economic Systems are created to deal with scarcity. • Traditional- A type of economic system where all the economic activity comes from rituals, habits, or customs. EX- The Inuit's • Normally found in a community that relies of agriculture or hunter/gathering, (based on trade)

6. Economic Systems • Command- A type of economic system where all the decisions are made by a central authority or government • EX- Cuba, North Korea, and China

8. Economic Systems • Market- An Economic system where individuals and firms act in their own best interests. • People make all the decisions with no government interference

9. Economic Systems • Mixed- An Economic system where people are free to make decisions with some government influence • Ex- The United States of America

10. Reading Groups2nd Period Group 4 Alex Blackaby Bobbie Carroll Steven Rice Brett Bowen Kody Workman Group 1 Carlee Peters Sidney Dietrich Kaylin Wells Shannon Carey James Holder Group 3 Wade Browning Jacob Johnson Alex Clymer Nancy Shoemaker Emilee Feltner Group 5 Kelsey Brewer Jackson Jenkins Rachael Piechnik Ashley Williams Taylor Gabbard Zach Williams Group 2 Jacob Nordheim Clay Thompson Morgan Sydnor Dylan Roseberry Chris Bruin

11. Reading Groups5th Period Group 4 Holly Jenkins Dakota Burton Cory Dozier William Neace Trevor Hown Group 1 Taelor McMillin Blake Pollard Erin Fitzpatrick Garret Marshall Caleb Schaller Group 3 Courtney Brierly Melanie Hill Sean Neuspickel Hailey York Kenneth Ross Group 2 Zach Risen Ashley Deering Brandon Gibbs Hunter Schalk Cheyenne Meadows Group 5 Garret Partin Edward Bartram Melanie Teegarden Dawn Shaefer Emily Prince Anthony Clower

12. Reading Groups7th Period Group 1 Gowan Brock Kenton Wells Jordan Bishop Chandler Aulick Hannah Sweetland Group 4 Anthony Coffman Kevin Trent Darrell Pugh Dakota Spencer Kenton Shoemaker Group 3 Summer Childers Angel Harrison Hannah Lee Ansley Baker Group 2 Sienna Price Jesse Witt Scribe Zagazeta Tanner Daugherty Dakota Barnes Group 5 Doug Eglian Sammy Ross Alexis Caudill Brent Goins

13. Reading Groups • After you have read you article and answered your questions create a visual representation of the Economic system you are reading about • Include • Raw Materials • Production • Distribution • Consumption

14. Market System • Economic system in which supply, demand, and the price system help people make decisions and allocate resources • Same as a Free Enterprise Economy • Normally based on a system of Capitalism, where people own the factors of production

16. Free Enterprise Economy • In the US we live in a Free Enterprise Economy • In this Competition is allowed to flourish with a minimum of government influence.

17. 5 Characteristics of a Free Enterprise Economy • Economic Freedom • Voluntary Exchange • Private Property Rights • The Profit Motive • Competition

18. Economic Freedom • Individuals are free to choose all economic decisions, such as, where and when they want to work: • Days/nights • Indoors/outdoors • In an office/at home • Have your own business/work for someone else • Leave job/Take a new job • What do I want to purchase?

20. Economic Freedom • Businesses also are free to make decisions: • Fire/hire who they want • Produce what goods they want • Decide how much to produce • Sell where they want to sell • Risk success/failure • Charge what they want • With Economic Freedom everything is open season!

24. Voluntary Exchange • The act of buyers and sellers freely and willingly engaging in market transactions

25. Voluntary Exchange • Transactions are made in such a way that both the buyer and seller are better off after the exchange • The buyer felt it was worth more than the $ • Seller felt the $ was worth more than the product

26. Private Property Rights • The Privilege that entitles people to own and control their possessions as they wish.

27. Private Property Rights • Private Property includes tangible items such as houses and cars, and intangible items such as skills and talents • People have the rights to use or abuse their property as long as they don’t interfere with the rights of others

28. Private Property Rights • Private Property gives individuals the incentive to work, save, and invest, because if you are successful you know you can keep any reward you earn • People will own things, because they can do with it what they want

29. Profit Motive • The driving force that encourages people and organizations to improve their material well-being.

30. Profit Motive • Profit- the extent to which persons or organizations are better off at the end of a period than they were at the beginning • Entrepreneurs- those who risk entering a business in hopes of making a profit • F.E.E. allows people to risk their $ in a business venture

34. Competition • The struggle among sellers to attract consumers while lowering costs and creating new products • Because capitalism is based on freedom and voluntary exchange, buyers compete to find the best products at the lowest price

36. The Role of the Entrepreneur • The Entrepreneur is one of the most important people in the economy • The Entrepreneur: • Organizes and manages land, capital, and labor • Starts up new businesses • Creates new products • All of this in order to seek the reward called Profit!

37. The Role of the Entrepreneur • Many Entrepreneurs fail • Others stay in business with varying degrees of success • Only a few manage to be extremely wealthy • Bill Gates • Paul Allen • Nolan Bushnell

38. The Role of the Entrepreneur • Entrepreneurs are the catalyst of a F.E.E. • Starts the action • When the Entrepreneur is successful everyone benefits. • The Entrepreneur gets profit and a growing business • The workers are rewarded with a better job (more $) • Consumers are rewarded with new and better products • The Government is rewarded with a higher level of economic activity and larger Tax receipts, used to build roads, schools, libraries, etc. • Everyone Benefits!

39. The Role of the Entrepreneur • When an entrepreneur is successful other industry people rush in to “grab a share” of the profit. • To stay competitive the original entrepreneur has to cut prices or improve the quality of his original product (benefits the consumer)

40. The Role of the Entrepreneur • In the end , the entrepreneurs search for profit leads to a chain of events that involves new products, greater competition, more production, higher quality, and lower prices for consumers

41. The Role of the Consumer • Consumers have the power in the economy, because they determine which products will be produced, by what they purchase. • If consumers like a product they buy it, if they don’t they wont! • Some products make it and some don’t!

43. The Role of the Consumer • Consumer Sovereignty- The consumer is sovereign (has the power) • “The costumer is always right!”

44. The Role of the Government • Government has a role, because citizens want them to have a role. • Justified, b/c the benefits outweigh the costs • The Government is the: • Protector • Provider of goods and services • Consumer • Regulator • Promoter of National Goals

45. Protector • Enforces Laws • Misleading Ads, unsafe food and drugs, environmental hazards • It also protects individual freedoms • Can’t be fired for race, or gender • In short, the gov’t ensures an efficient and fair economy

46. Provider and Consumer • The Government provides goods and services • Such as, Education, welfare, bus services, parks, and libraries, etc • The Government consumes the same as any other business, putting money back into the economy

47. Regulator • The government is in charge of preserving competition in the market place • Regulates different things such as, insurance rates, building zones, Labor laws, and health regulations • Government sets rules for individuals protection

49. Promoter of National Goals • The government strives to achieve economic goals of freedom, efficiency, equity, security, full employment, price stability, and economic growth • Social Security • Child Labor Laws • Set Minimum Wage

50. Mixed Market Economy • Modified Private Enterprise Economy • People carry on with their economic affairs freely, but are subject to some government intervention and regulation