CHARACTERISTICS OF A MIXED MARKET ECONOMY

1. CHARACTERISTICS OF A MIXED MARKET ECONOMY

2. PRIVATE PROPERTY Labor resources, natural resources, capital resources (e.g., equipment and buildings), and the goods and services produced in the economy are largely owned by private individuals and private institutions rather than by government. This private ownership combined with the freedom to negotiate legally binding contracts permits people, within very broad limits, to obtain and use resources as they choose.

3. FREEDOM OF ENTERPRISE AND CHOICE Private entrepreneurs are free to obtain and organize resources in the production of goods and services and to sell them in markets of their choices. Consumers are at liberty to buy that collection of goods and services that best satisfies their economic wants. Workers are free to seek any jobs for which they are qualified.

4. MOTIVE OF SELF-INTEREST The "Invisible Hand" that is the driving force in a market economy is each individual promoting his or her self-interest. Consumers aim to get the greatest satisfaction from their budgets; entrepreneurs try to achieve the highest profits for their firms; workers want the highest possible wages and salaries; and owners of property resources attempt to get the highest possible prices from the rent and sale of their resources.

5. COMPETITION Economic rivalry means that buyers and sellers are free to enter or leave any market and that there are buyers and sellers acting independently in the marketplace. It is competition, not government regulation, that diffuses economic power and limits the potential abuse of that power by one economic unit against another as each attempts to further its own self-interest.

6. SYSTEM OF MARKETS AND PRICES Markets are the basic coordinating mechanisms in our type of economy, not central planning by government. A market brings buyers and sellers of a particular good or service into contact with one another. The preferences of sellers and buyers are registered on the supply and demand sides of various markets, and the outcome of these choices is a system of product and resource prices. These prices are guideposts on which participants in markets make and revise their free choices in furthering their self-interests.

7. LIMITED GOVERNMENT A competitive market economy promotes the efficient use of its resources. As a self-regulating and self-adjusting economy, no significant economic role for government is necessary. However, a number of limitations and undesirable outcomes associated with the market system result in an active, but limited economic role for government.

9. 14th Amendment Right of Citizens and Equal Protection Clause Nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

10. 14th Amendment Section 4.Validity of Public Debt The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void

11. Maintaining Legal and Social FrameworkExample: Create laws and provide courts, provide information and services to help economy function better, establish a monetary system, define and enforce property rights. Maintaining CompetitionExample: Create and enforce antitrust laws; regulate natural monopolies. Providing Public Goods and ServicesExample: Provide goods and services that markets are unable or unwilling to provide, such as national defense. Redistributing IncomeExample: Higher income tax rates for rich than for poor, provide social security, and aid to dependent children, Medicare, Medicaid. Correcting for ExternalitiesExample: Taxes to reduce negative externalities, such as environmental pollution; subsidies to encourage positive externalities, such as education. Externalities exist when some of the costs or benefits associated with the production or consumption of a product "spill over" to third parties other than the direct producer or consumer of the product. Stabilizing the EconomyExample: Use government budgets and/or the money supply to promote economic growth, control inflation, and reduce unemployment.

12. PRIVATE PROPERTY Labor resources, natural resources, capital resources (e.g., equipment and buildings), and the goods and services produced in the economy are largely owned by private individuals and private institutions rather than by government. This private ownership combined with the freedom to negotiate legally binding contracts permits people, within very broad limits, to obtain and use resources as they choose. Government Role in Economy Game Theory/Lessons What does/did the Constitution/Founder Fathers say? Gov’t Today Readings Principles of the Constitution Limited Government Popular Sovereignty Federalism Separation of Powers Checks and Balances Maintaining Legal and Social Framework Maintaining Competition Providing Public Goods and Services Redistributing Income Correcting for Externalities Stabilizing the Economy v v Property Rights The Concise Encyclopedia of Economics Library of Economics and Liberty.mht Games The Economic Principles of America private property.docx

13. FREEDOM OF ENTERPRISE AND CHOICE Private entrepreneurs are free to obtain and organize resources in the production of goods and services and to sell them in markets of their choices. Consumers are at liberty to buy that collection of goods and services that best satisfies their economic wants. Workers are free to seek any jobs for which they are qualified. Government Role in Economy Game Theory/Lessons What does/did the Constitution/Founder Fathers say? Gov’t Today Readings Principles of the Constitution Limited Government Popular Sovereignty Federalism Separation of Powers Checks and Balances Maintaining Legal and Social Framework Maintaining Competition Providing Public Goods and Services Redistributing Income Correcting for Externalities Stabilizing the Economy v v v Freedom Of Individual Enterprise.mht Activities American Free Enterprise free enterprise and farms.pdf Limited Government and Individual Enterprise and the Profit Motive.mht Games

14. MOTIVE OF SELF-INTEREST The "Invisible Hand" that is the driving force in a market economy is each individual promoting his or her self-interest. Consumers aim to get the greatest satisfaction from their budgets; entrepreneurs try to achieve the highest profits for their firms; workers want the highest possible wages and salaries; and owners of property resources attempt to get the highest possible prices from the rent and sale of their resources. Government Role in Economy Game Theory/Lessons What does/did the Constitution/Founder Fathers say? Gov’t Today Readings Principles of the Constitution Limited Government Popular Sovereignty Federalism Separation of Powers Checks and Balances Maintaining Legal and Social Framework Maintaining Competition Providing Public Goods and Services Redistributing Income Correcting for Externalities Stabilizing the Economy v v v Limited Government and Individual Enterprise and the Profit Motive.mht Dollar Auction Prisoner’s Dilemma Games

15. COMPETITION Economic rivalry means that buyers and sellers are free to enter or leave any market and that there are buyers and sellers acting independently in the marketplace. It is competition, not government regulation, that diffuses economic power and limits the potential abuse of that power by one economic unit against another as each attempts to further its own self-interest. Government Role in Economy Game Theory/Lessons What does/did the Constitution/Founder Fathers say? Gov’t Today Readings Principles of the Constitution Limited Government Popular Sovereignty Federalism Separation of Powers Checks and Balances Maintaining Legal and Social Framework Maintaining Competition Providing Public Goods and Services Redistributing Income Correcting for Externalities Stabilizing the Economy v v v the two worlds of business.pdf Public Good Games tragedy of the commons.pdf The Oligopoly Game Market Failures, Externalities and Public Goods.mht The Collusion Game

16. SYSTEM OF MARKETS AND PRICESMarkets are the basic coordinating mechanisms in our type of economy, not central planning by government. A market brings buyers and sellers of a particular good or service into contact with one another. The preferences of sellers and buyers are registered on the supply and demand sides of various markets, and the outcome of these choices is a system of product and resource prices. These prices are guideposts on which participants in markets make and revise their free choices in furthering their self-interests. Government Role in Economy Game Theory/Lessons What does/did the Constitution/Founder Fathers say? Gov’t Today Readings Principles of the Constitution Limited Government Popular Sovereignty Federalism Separation of Powers Checks and Balances Maintaining Legal and Social Framework Maintaining Competition Providing Public Goods and Services Redistributing Income Correcting for Externalities Stabilizing the Economy v v v Politics versus Economics.pdf The Wage is right Supply and Demand PPT How markets work and Where markets fail.pdf Lemons Games Labor Markets Supply and Demand Shifters Pit Market government price fixing and min wage laws.pdf The power of the Market- The Pencil A Mixed Economy The Role of the Market.mht Supply and Demand PPT

17. LIMITED GOVERNMENT A competitive market economy promotes the efficient use of its resources. As a self-regulating and self-adjusting economy, no significant economic role for government is necessary. However, a number of limitations and undesirable outcomes associated with the market system result in an active, but limited economic role for government. Government Role in Economy Game Theory/Lessons What does/did the Constitution/Founder Fathers say? Gov’t Today Readings Principles of the Constitution Limited Government Popular Sovereignty Federalism Separation of Powers Checks and Balances Maintaining Legal and Social Framework Maintaining Competition Providing Public Goods and Services Redistributing Income Correcting for Externalities Stabilizing the Economy Maintaining Legal and Social Framework Maintaining Competition Providing Public Goods and Services Redistributing Income Correcting for Externalities Stabilizing the Economy v v v Limited Government and Individual Enterprise and the Profit Motive.mht Stag Hunt Games Prisoner’s Dilemma A Mixed Economy The Role of the Market.mht Income Distribution game Politics versus Economics.pdf Dinner Party

18. Supreme Court case that dealt with the Economy VA vs. Obama and the health care bill One on One debates Supply and Demand and the debate on government interaction and price Production scarcity

19. Health careDebt ceilingDevelop unit planDevelop unit readingsDevelop lesson plansDevelop game theory lessonsCreate unit 3 questionsSupply and demandPrice controls and price floors and price ceilings, subsidies, excise tax- min wage (william)- rent control (sowell)Price in production- economics of scale, dis economies of scalePrisoners dilemma Demand of buyer - marginal utitlityPizza exampleCompetition Pure all the way to monopoliesGovernment regulation and control of monopoliesMarket failures an correcting the market through regulationCompetition with buyers and sellers

20. Private property the debate of tax and eminant domainThe market itselfHealthy marketsInformations - imperfect information and it's impacts of rational decisions- 20 dollar auctionExternalities- stag huntPublic goods - free riders- politics- debt - taxRedistributing the wealthFree rider syndromeFree rider dilemmaDinner party Tragedy of the commonsPork barrel legislation and earmarksMotive of self interest and profit motiveFreedom of enterprise and choicePrivate property