SCARCITY, ECONOMIC SYSTEMS, AND FREE
ENTERPRISEEconomics
Mr. Biddle
Economics
Economics: the attempt to satisfy seemingly unlimited wants and needs using limited resources
Scarcity Imbalance between unlimited wants and
limited resources available for satisfying those wants.– Not having enough resources to produce all the
things people would like to have.
Scarcity Chart
Economic Systems Economic Systems are
created to deal with scarcity. Traditional- A type of
economic system where all the economic activity comes from rituals, habits, or customs. EX- The Inuit's– Normally found in a
community that relies of agriculture or hunter/gathering, (based on trade)
Economic Systems
Command- A type of economic system where all the decisions are made by a central authority or government
EX- Cuba, North Korea, and China
Economic Systems
Market- An Economic system where individuals and firms act in their own best interests. – People make all the
decisions with no government interference
Economic Systems
Mixed- An Economic system where people are free to make decisions with some government influence
Ex- The United States of America
Reading Groups2nd Period
Group 5Kelsey BrewerJackson JenkinsRachael PiechnikAshley WilliamsTaylor GabbardZach Williams
Group 4Alex BlackabyBobbie CarrollSteven RiceBrett BowenKody Workman
Group 3Wade BrowningJacob JohnsonAlex ClymerNancy ShoemakerEmilee Feltner
Group 2Jacob NordheimClay ThompsonMorgan SydnorDylan RoseberryChris Bruin
Group 1Carlee PetersSidney DietrichKaylin WellsShannon CareyJames Holder
Reading Groups5th Period
Group 5Garret PartinEdward BartramMelanie TeegardenDawn ShaeferEmily PrinceAnthony Clower
Group 4Holly JenkinsDakota BurtonCory DozierWilliam NeaceTrevor Hown
Group 3Courtney BrierlyMelanie HillSean NeuspickelHailey YorkKenneth Ross
Group 2Zach RisenAshley DeeringBrandon GibbsHunter SchalkCheyenne Meadows
Group 1Taelor McMillinBlake PollardErin FitzpatrickGarret MarshallCaleb Schaller
Reading Groups7th Period
Group 1Gowan BrockKenton WellsJordan BishopChandler AulickHannah Sweetland
Group 2Sienna PriceJesse WittScribe ZagazetaTanner DaughertyDakota Barnes
Group 3Summer ChildersAngel HarrisonHannah LeeAnsley Baker
Group 4Anthony CoffmanKevin TrentDarrell PughDakota SpencerKenton Shoemaker
Group 5Doug EglianSammy RossAlexis CaudillBrent Goins
Reading Groups
After you have read you article and answered your questions create a visual representation of the Economic system you are reading about
Include – Raw Materials
– Production
– Distribution
– Consumption
Market System Economic system in which supply, demand,
and the price system help people make decisions and allocate resources– Same as a Free Enterprise Economy– Normally based on a system of Capitalism,
where people own the factors of production
Free Enterprise Economy
In the US we live in a Free Enterprise Economy
In this Competition is allowed to flourish with a minimum of government influence.
5 Characteristics of a Free Enterprise Economy
1. Economic Freedom
2. Voluntary Exchange
3. Private Property Rights
4. The Profit Motive
5. Competition
Economic Freedom
Individuals are free to choose all economic decisions, such as, where and when they want to work:– Days/nights– Indoors/outdoors– In an office/at home– Have your own business/work for someone else– Leave job/Take a new job– What do I want to purchase?
Economic Freedom Businesses also are free to make decisions:
– Fire/hire who they want
– Produce what goods they want
– Decide how much to produce
– Sell where they want to sell
– Risk success/failure
– Charge what they want
With Economic Freedom everything is open season!
Voluntary Exchange
The act of buyers and sellers freely and willingly engaging in market transactions
Voluntary Exchange
Transactions are made in such a way that both the buyer and seller are better off after the exchange– The buyer felt it was
worth more than the $
– Seller felt the $ was worth more than the product
Private Property Rights
The Privilege that entitles people to own and control their possessions as they wish.
Private Property Rights Private Property
includes tangible items such as houses and cars, and intangible items such as skills and talents
People have the rights to use or abuse their property as long as they don’t interfere with the rights of others
Private Property Rights
Private Property gives individuals the incentive to work, save, and invest, because if you are successful you know you can keep any reward you earn
People will own things, because they can do with it what they want
Profit Motive
The driving force that encourages people and organizations to improve their material well-being.
Profit Motive Profit- the extent to
which persons or organizations are better off at the end of a period than they were at the beginning
Entrepreneurs- those who risk entering a business in hopes of making a profit– F.E.E. allows people to
risk their $ in a business venture
Competition
The struggle among sellers to attract consumers while lowering costs and creating new products
Because capitalism is based on freedom and voluntary exchange, buyers compete to find the best products at the lowest price
The Role of the Entrepreneur
The Entrepreneur is one of the most important people in the economy
The Entrepreneur:– Organizes and manages land, capital, and labor– Starts up new businesses– Creates new products
All of this in order to seek the reward called Profit!
The Role of the Entrepreneur
Many Entrepreneurs fail
Others stay in business with varying degrees of success
Only a few manage to be extremely wealthy– Bill Gates– Paul Allen– Nolan Bushnell
The Role of the Entrepreneur
Entrepreneurs are the catalyst of a F.E.E.– Starts the action
When the Entrepreneur is successful everyone benefits.– The Entrepreneur gets profit and a growing business
– The workers are rewarded with a better job (more $)
– Consumers are rewarded with new and better products
– The Government is rewarded with a higher level of economic activity and larger Tax receipts, used to build roads, schools, libraries, etc.
– Everyone Benefits!
The Role of the Entrepreneur
When an entrepreneur is successful other industry people rush in to “grab a share” of the profit.
To stay competitive the original entrepreneur has to cut prices or improve the quality of his original product (benefits the consumer)
The Role of the Entrepreneur
In the end , the entrepreneurs search for profit leads to a chain of events that involves new products, greater competition, more production, higher quality, and lower prices for consumers
The Role of the Consumer
Consumers have the power in the economy, because they determine which products will be produced, by what they purchase.
If consumers like a product they buy it, if they don’t they wont!
Some products make it and some don’t!
The Role of the Consumer
Consumer Sovereignty- The consumer is sovereign (has the power)
“The costumer is always right!”
The Role of the Government
Government has a role, because citizens want them to have a role. – Justified, b/c the benefits
outweigh the costs
The Government is the:– Protector
– Provider of goods and services
– Consumer
– Regulator
– Promoter of National Goals
Protector
Enforces Laws– Misleading Ads, unsafe
food and drugs, environmental hazards
It also protects individual freedoms– Can’t be fired for race,
or gender In short, the gov’t
ensures an efficient and fair economy
Provider and Consumer
The Government provides goods and services– Such as, Education,
welfare, bus services, parks, and libraries, etc
The Government consumes the same as any other business, putting money back into the economy
Regulator
The government is in charge of preserving competition in the market place
Regulates different things such as, insurance rates, building zones, Labor laws, and health regulations
Government sets rules for individuals protection
Promoter of National Goals
The government strives to achieve economic goals of freedom, efficiency, equity, security, full employment, price stability, and economic growth– Social Security– Child Labor Laws– Set Minimum Wage
Mixed Market Economy
Modified Private Enterprise Economy
People carry on with their economic affairs freely, but are subject to some government intervention and regulation