chapter 13 our economic system chapter 13 our economic system lesson 13.1 the free enterprise system...
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Chapter 13Our Economic System
Chapter 13Our Economic System
Lesson 13.1 The Free Enterprise System
Lesson 13.1 The Free Enterprise System
2Chapter 13 Our Economic System
The Free Enterprise SystemThe Free Enterprise System
DiscoverDiscover
The meaning of free enterprise
How the free enterprise system works
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3Chapter 13 Our Economic System
The Free Enterprise SystemThe Free Enterprise System
DiscoverDiscover
How you fit into our economic system
4Chapter 13 Our Economic System
The Free Enterprise SystemThe Free Enterprise System
Why It’s ImportantWhy It’s Important
The more you understand about our economy, the better your chances are of reaching your career goals.
5Chapter 13 Our Economic System
The Free Enterprise SystemThe Free Enterprise System
Key TermsKey Terms
economicseconomic systemcapitalismfree enterpriseregulatecommand economy
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6Chapter 13 Our Economic System
The Free Enterprise SystemThe Free Enterprise System
Key TermsKey Terms
socialist economyconsumersproducersprofitsupplydemand
7Chapter 13 Our Economic System
The Free Enterprise SystemThe Free Enterprise System
The Free Enterprise SystemThe Free Enterprise System
What do you know about how the prices for goods and services are set?
Do you understand why prices rise or fall?
8Chapter 13 Our Economic System
The Free Enterprise SystemThe Free Enterprise System
Economic SystemsEconomic Systems
Economics is the study of how people produce, distribute, and use goods and services.
9Chapter 13 Our Economic System
The Free Enterprise SystemThe Free Enterprise System
Economic SystemsEconomic Systems
Producing means creating good or services.
Distributing means making goods and services available to the people who need them.
10Chapter 13 Our Economic System
The Free Enterprise SystemThe Free Enterprise System
Economic SystemsEconomic Systems
Using is what people do with goods and services.
11Chapter 13 Our Economic System
The Free Enterprise SystemThe Free Enterprise System
Economic SystemsEconomic Systems
An economic system is a country’s way of making choices about how to use its resources to produce and distribute goods and services.
12Chapter 13 Our Economic System
The Free Enterprise SystemThe Free Enterprise System
The Free Enterprise SystemThe Free Enterprise System
The economic system of the United States is known as capitalism.
Capitalism is also known as a market economy or free enterprise system.
13Chapter 13 Our Economic System
The Free Enterprise SystemThe Free Enterprise System
The Free Enterprise SystemThe Free Enterprise System
Free enterprise means that individuals or businesses may buy and sell goods and services and set prices with little government control.
14Chapter 13 Our Economic System
The Free Enterprise SystemThe Free Enterprise System
The Free Enterprise SystemThe Free Enterprise System
The government passes laws to regulate, or set rules for, some prices and wages.
Laws passed by the government protect everyone who buys and uses goods and services.
15Chapter 13 Our Economic System
The Free Enterprise SystemThe Free Enterprise System
Other Economic SystemsOther Economic Systems
In a command economy, the government makes all of the key economic decisions.
In a command economy, there is little economic freedom and little incentive to increase productivity.
16Chapter 13 Our Economic System
The Free Enterprise SystemThe Free Enterprise System
Other Economic SystemsOther Economic Systems
In a socialist economy, there is private enterprise, but the government controls key industries and makes many economic decisions.
17Chapter 13 Our Economic System
The Free Enterprise SystemThe Free Enterprise System
How the U.S. Economy WorksHow the U.S. Economy Works
People who buy and use goods and services are consumers.
Every time consumers make a purchase, they are “voting” with their dollars.
18Chapter 13 Our Economic System
The Free Enterprise SystemThe Free Enterprise System
The Producer’s Goal: Making a ProfitThe Producer’s Goal: Making a Profit
Producers and consumers have very different goals.
Producers try to make goods or provide services that consumers will buy.
19Chapter 13 Our Economic System
The Free Enterprise SystemThe Free Enterprise System
The Producer’s Goal: Making a ProfitThe Producer’s Goal: Making a Profit
All businesses must earn a profit to keep operating.
A profit is the amount of money left after the business pays its expenses.
20Chapter 13 Our Economic System
The Free Enterprise SystemThe Free Enterprise System
Q and AQ and A
I don’t want to work for a business whose main goal is making a profit. Am I a misfit?
I don’t want to work for a business whose main goal is making a profit. Am I a misfit?
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21Chapter 13 Our Economic System
The Free Enterprise SystemThe Free Enterprise System
Q and AQ and A
Perhaps a job in a nonprofit organization would be perfect for you.
Some nonprofit organizations exist to serve charitable causes.
Perhaps a job in a nonprofit organization would be perfect for you.
Some nonprofit organizations exist to serve charitable causes.
22Chapter 13 Our Economic System
The Free Enterprise SystemThe Free Enterprise System
The Pattern of the EconomyThe Pattern of the EconomyGraphic OrganizerGraphic Organizer
Pay wages and salaries from profit
earned
Provide goods and services to consumers
Provide labor and skills
Spend money for goods and
services
Business and Industry
People
23Chapter 13 Our Economic System
The Free Enterprise SystemThe Free Enterprise System
Factors That Affect PricesFactors That Affect Prices
A consumer’s main goal is to get the most for his or her money.
Consumers note changes in prices and compare prices.
24Chapter 13 Our Economic System
The Free Enterprise SystemThe Free Enterprise System
Factors That Cause Prices to ChangeFactors That Cause Prices to ChangeGraphic OrganizerGraphic Organizer
Supply and Supply and DemandDemand
Production Production CostsCosts CompetitionCompetition
Supply is the amount of goods and services available for sale.
The more it costs to make a good or provide a service, the higher its price.
When producers offer similar goods or services for sale, they are in competition.
Demand is the amount of goods and services that consumers want to buy.
Producers must sell their goods or services for more than it costs to produce them.
When competition is great, prices are lower. When there is little competition, prices are higher.
25Chapter 13 Our Economic System
The Free Enterprise SystemThe Free Enterprise System
The Big PictureThe Big Picture
The global economy links the free enterprise system of the United States to all the other economic systems of the world.
You already have a role in the global economy.
26Chapter 13 Our Economic System
The Free Enterprise SystemThe Free Enterprise System
Try This ActivityTry This Activity
Knowing the similarities and differences between our economy and the economies of other countries will help you compare employment opportunities in our free enterprise system to those available in the international job market.
Knowing the similarities and differences between our economy and the economies of other countries will help you compare employment opportunities in our free enterprise system to those available in the international job market.
Evaluate International Career Opportunities
Evaluate International Career Opportunities
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27Chapter 13 Our Economic System
The Free Enterprise SystemThe Free Enterprise System
Try This ActivityTry This Activity
Create a Venn Diagram Prepare a Venn diagram comparing and contrasting the employment opportunities in the U.S. free enterprise system to those in the economic system of another country.
Create a Venn Diagram Prepare a Venn diagram comparing and contrasting the employment opportunities in the U.S. free enterprise system to those in the economic system of another country.
Evaluate International Career Opportunities
Evaluate International Career Opportunities
28Chapter 13 Our Economic System
The Free Enterprise SystemThe Free Enterprise System
Why does the government regulate prices and wages?
So that businesses can’t develop monopolies, charge excessive prices to consumers, pay less than the minimum wage, and refuse to pay overtime.
Why does the government regulate prices and wages?
So that businesses can’t develop monopolies, charge excessive prices to consumers, pay less than the minimum wage, and refuse to pay overtime.
Critical Thinking Review
Critical ThinkingCritical Thinking
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AA
29Chapter 13 Our Economic System
The Free Enterprise SystemThe Free Enterprise System
What happens to prices when supply is greater than demand? When demand is greater than supply? Explain why this happens.
What happens to prices when supply is greater than demand? When demand is greater than supply? Explain why this happens.
Critical Thinking Review
Critical ThinkingCritical Thinking
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30Chapter 13 Our Economic System
The Free Enterprise SystemThe Free Enterprise System
Prices go down when supply is greater than demand because producers have an excess amount of goods or services available; prices go up when demand is greater than supply because consumers want more goods or services than are available for sale.
Prices go down when supply is greater than demand because producers have an excess amount of goods or services available; prices go up when demand is greater than supply because consumers want more goods or services than are available for sale.
Critical Thinking Review
Critical ThinkingCritical Thinking
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AA
31Chapter 13 Our Economic System
The Free Enterprise SystemThe Free Enterprise System
Why would workers in a command economy have less incentive to be productive than workers in the free enterprise system?
Why would workers in a command economy have less incentive to be productive than workers in the free enterprise system?
Critical Thinking Review
Critical ThinkingCritical Thinking
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32Chapter 13 Our Economic System
The Free Enterprise SystemThe Free Enterprise System
Workers in a command economy always have a job and get paid regardless of their productivity. Even if they are more productive, they will not earn more money nor will they necessarily be promoted. Workers in the free enterprise system must be productive to keep their jobs, earn more money, and advance in their careers.
Workers in a command economy always have a job and get paid regardless of their productivity. Even if they are more productive, they will not earn more money nor will they necessarily be promoted. Workers in the free enterprise system must be productive to keep their jobs, earn more money, and advance in their careers.
Critical Thinking Review
Critical ThinkingCritical Thinking
AA
End of Chapter 13Our Economic System
End of Chapter 13Our Economic System
Lesson 13.1 The Free Enterprise System
Lesson 13.1 The Free Enterprise System
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