roles of the entrepreneur, the consumer & the … of...role of the entrepreneur •organizes and...
TRANSCRIPT
10 Richest People in the World • No. 1: Carlos Slim Helú
• $74 billion | Telecom | Mexico
• No. 2: Bill Gates
• $56 billion | Microsoft | U.S.
• No. 3: Warren Buffett
• $50 billion | Berkshire Hathaway| U.S.
• No. 4: Bernard Arnault
• $41 billion | LVMH | France
• No. 5: Larry Ellison
• $39.5 billion | Oracle | U.S.
• No. 6: Lakshmi Mittal • $31.1 billion | Steel | India
• No. 7: Amancio Ortega • $31 billion | Zara | Spain
• No. 8: Eike Batista • $30 billion | Mining, Oil | Brazil
• No. 9: Mukesh Ambani • $27 billion | Petrochemicals | India
• No. 10: Li Ka-Shing • $26 billion | Diversified | Hong Kong
• No. 14: Christy Walton & family • $26.5 billion | Wal-Mart | U.S.
Role of the Entrepreneur
• Organizes and manages land, capital and labor in order to make a profit.
• Want to “be their own boss”
• Willing to risk everything to make their dreams come true.
Entrepreneurs Success Benefits All
• Workers are rewarded with more and better paying jobs.
• Consumers are rewarded with new and better products.
• The government is rewarded with higher tax revenue to build bridges, roads, schools and libraries.
Role of the Consumer
• If consumers like a product, it will sell and the producer will be rewarded for his efforts.
• If consumers reject a product and refuse to purchase it, the entrepreneur may go out of business.
• Consumer sovereignty = Ruler of the market
• “the customer is always right”
Market Failures
• New Coke
• Celery flavored Jell-O
• Chewable toothpaste in tablet form
• Bacon you cook in the toaster
• Chevy Nova in Spanish no va = “it doesn’t go”
Role of the Government
• Protector
• Provider of goods and services
• Consumer
• Regulator
• Promoter of national goals
Protector
• The U.S. government enforces laws against false and misleading advertising, unsafe food and drugs, environmental hazards and unsafe cars.
• It protects property rights, enforces contracts and tries to make sure everyone follows the “rules of the game” to ensure an efficient and fair economy.
Provider
• All levels of government provide goods and services for citizens.
• National government = Defense
• State Government = Education
• Local Government = Buses, Libraries, Parks
Consumer
• In the process of providing for its citizens, the government consumes factors of production (C E L L ) just like any other business.
• The government is the second largest consuming unit in the U.S. economy (the largest is the consumer unit).
Regulator
• National Government = preserving competition in the marketplace (no monopolies), oversees interstate commerce, communications, banking and nuclear power.
• State Government = Regulate insurance rates and car licensing and registration.
• Local Government = Building & Zoning permits
Promoter of National Goals
• Government reflects the will of the majority of its people. As a result, many government functions reflect people’s desire to modify the economic system to achieve their goals.
• Social Security, Child Labor Laws and minimum wage are examples of how Americans have modified their free enterprise economy.