Notebook # 7-Economics 2-3

Capitalism and Economic Freedom

Economics 2-3Capitalism and Economic

Freedom

ESSENTIAL QUESTION: What are the effects of government involvement in providing public goods and services, redistributing income from one group to another, protecting property rights, and resolving market failures?

Economics 2-3Capitalism and Economic

FreedomGPS STANDARDS:

SSEF5-

a.) Explain why the government provides public goods and services, redistributes income, protects property rights, and resolves market failures.

b.) Give examples of government regulation and deregulation and their effects on consumers and producers.

Capitalism and Economic Freedom

• Under capitalism, the basic economic decisions are made through the free interaction of individuals looking out for their own best interests.

Capitalism and Economic Freedom

• Capitalism is a market economy in which private citizens own the factors of production, In a free enterprise system, there is limited government interference and businesses are free to compete.

• Free enterprise is another term used to describe the American economy.

Capitalism and Economic Freedom

• With economic freedom, people and businesses make their own economic choices.

Capitalism and Economic Freedom

• The result of voluntary exchange, in which buyers and sellers are free to decide whether or not to complete a transaction, results in both buyers and sellers believing that the good or service obtained is of more value than the money or product given up.

• Private property rights motivate people to succeed. Any rewards they earn are kept.

Capitalism and Economic Freedom

• The profit motive encourages entrepreneurship and is largely responsible for the growth of a free enterprise economy.

• Competition among sellers helps lower prices.

Evaluating Economic Performance

What are the characteristics of free enterprise and capitalism that we just examined?

The five characteristics are: 1. economic freedom

2. voluntary exchange

3. private property rights

4. profit motive

5. competition

Evaluating Economic Performance

What are the characteristics of free enterprise and capitalism that we just examined?

The five characteristics are: 1. economic freedom

2. voluntary exchange

3. private property rights

4. profit motive

5. competition

Evaluating Economic Performance

What are the characteristics of free enterprise and capitalism that we just examined?

1.) FOLDABLE-

The five characteristics are:

1. economic freedom

2. voluntary exchange

3. private property rights

4. profit motive

5. competition

Evaluating Economic Performance

What are the characteristics of free enterprise and capitalism that we just examined?

2.) OUTLINE P. 46-51

Evaluating Economic Performance

3.) DRAWING p. 47 Figure 2.2Characteristics of Free Enterprise and CapitalismFigure 2.2Characteristics of Free Enterprise and Capitalism

Capitalism and Economic Freedom

Figure 2.2Characteristics of Free Enterprise and CapitalismFigure 2.2Characteristics of Free Enterprise and Capitalism

p. 47 in Economics textbook