~The Private Sector

Economics

What is it?

The part of an economy that is owned by individuals and operated for their personal benefit.

Exchanges in the private sector contribute to the efficiency of the economy.

Individual choice and competition in the private sector improve efficiency.

Can you think of anything in the private sector?

Private Ownership-Benefit Private Gain! Private goods=goods that

are privately owned and used to benefit only their owners.

Ex. Selling a house General motors? Public sector=the part of

an economy that is owned by the whole society and operated for its benefit.

Private Sector Exchanges

Exchange=the giving of one thing in return for some other thing. Both parties benefit!

Efficiency and Individual Choice– Efficiency- achieving the maximum benefit

from a given amount and combination of resources.

– Firms must be efficient in order to stay in business.

– Competition!

Competiton The rivalry between two

or more parties to gain benefits from a third party.

Competition forces weaker, less efficient companies out of the industry

Works to the consumers advantage

Causes us to make choices

Private Sector Markets and Consumers Market=exchange activities between buyers

and sellers of goods and services. Provide information through

– Advertising– Public relations– Promotions– Demonstrations

Markets

Establish and provide price information

Establishes prices through competition

Provide many choices Many

choices=satisfied customers

Private sector markets and producers The success of

producers depends on their ability to satisfy the wants and needs of consumers more efficiently than other do

Producers must find what consumers want or need

Entrepreneurs=individuals who take the risk of producing a product for a profit

They take risks! Private enterprise=a

system in which individuals take the risk of producing goods or services to make a profit