Capitalism and Free Enterprise Market economy is based on capitalism – Capitalism thrives on...
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Transcript of Capitalism and Free Enterprise Market economy is based on capitalism – Capitalism thrives on...
![Page 1: Capitalism and Free Enterprise Market economy is based on capitalism – Capitalism thrives on competition – Free enterprise is another term to describe.](https://reader035.fdocuments.us/reader035/viewer/2022071716/56649ef25503460f94c03bfe/html5/thumbnails/1.jpg)
Capitalism and Free Enterprise
Market economy is based on capitalism– Capitalism thrives on competition– Free enterprise is
another term to describe US economy
– Competition is allowed to flourish
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Characteristics of Capitalism
Economic Freedom– People can chose their occupation and
what to buy– Businesses can decide what to produce
and how muchVoluntary Exchange
– Buyers and sellers exchange freely in market transactions
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Characteristics of Capitalism
Private Property– People control their
possessions as they wish
Profit Motive– People risk their money
to gain more moneyProfit – extent to which
persons or organizations are better off than they were before a transaction
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The Role of the Entrepreneur
Manage land, labor, and capitalMany will fail
– But dream of success helps ignore failure
If an entrepreneur is profitable, it attracts more people to that industry
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The Role of the Consumer
Hold power in the economy– If they buy, producers
will produceConsumer sovereignty
Wants change as they are exposed to more products
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The Role of Government
4 Roles 1. Protector
– Laws protect consumers– Prohibits abusing freedoms
2. Provider and Consumer– Provide goods and services
3. Regulator– Preserves competition
Promoter of National Goals– US operates under a modified private enterprise economy
people are economically free, but government intervenes and regulates