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Video Clip. How does the story of “New Coke” and “Coca-Cola Classic” demonstrate that, ultimately, the consumers are the ruler of the marketplace? Respond in 4 to 6 full lines. Lesson 1.4 – Key Principles of the U.S. Economy.

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  1. Video Clip How does the story of “New Coke” and “Coca-Cola Classic” demonstrate that, ultimately, the consumers are the ruler of the marketplace? Respond in 4 to 6 full lines.

  2. Lesson 1.4 – Key Principles of the U.S. Economy Essential Questions: Why is the U.S. economy considered to be a mixed market economy? How does profit motive, competition, and consumer sovereignty impact the decisions of entrepreneurs?

  3. The Pillars of Capitalism How does each of these “pillars” support the capitalist system?

  4. Private Enterprise: Private citizens, as entrepreneurs, start businesses. Entrepreneurs risk failure and financial loss because of the possibility of being rewarded with profits.

  5. Competition: Competition among sellers leads to lower prices, better products, innovation, and efficient use of resources. Buyers also compete with each other to buy the goods/services offered. Businesses also compete with each other to hire the best employees, and workers compete with each other for available jobs.

  6. Private Property: Private citizens own society’s productive resources (natural resources, capital resources, human resources) and direct those resources toward their most profitable use.

  7. Profit Motive: Profit and material wealth encourages entrepreneurs to start their own businesses and encourages others to work hard and seek higher paying jobs. Individuals are motivated by self interest.

  8. Consumer Sovereignty: The consumer rules the marketplace. Businesses must offer products that consumers want. Consumers cast “dollar votes” when they buy goods/services. Products which receive few “votes” will no longer be produced. Consumers decide which businesses thrive and which ones fail.

  9. Where does the U.S. economy belong on this spectrum?

  10. United States “Mixed Market Economy” • Public Education • Social Security • Medicare & Medicaid • Welfare, Food Stamps, etc. • Minimum Wage • Regulations (FDA, FAA, EPA, etc.)

  11. Lesson 1.4 Key Principles of the U.S. Economy • Summarizer: • Imagine that an entrepreneur intended to start his own restaurant. • - What would be the reason/incentive/motivation for opening his own business? • - How would competition from other businesses impact his decisions/actions? • - How would consumer sovereignty impact his decisions/actions? • - How would government regulation impact his decisions/actions? • Respond in a short paragraph, using complete sentences.

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