Thursday, January 24 th You will be able to explain the key
principles of the free enterprise (capitalist) economic system.
Every nations economy is made up of producers and consumers.
Producers MAKE the goods. Consumer BUY the goods. Give one example
of a producer. Give one example of a consumer. Are you a producer
or a consumer? Explain in 2 sentences. OBJECTIVEDO-FIRST
Slide 2
M&M Simulation! Imagine my classroom is the American
economy. I am the producer and you are the consumers! Enjoy your
consumer goods!
Slide 3
Ms. Mathais M&M Shortage Why isnt there an unlimited
supply? What happens when there arent enough resources for everyone
in an economy?
Slide 4
SCARCITY! No one has access to unlimited resourcesour economic
system must figure out how to best use our scarce amount of
resources. DEFINITION: write this term below your objective for
today Scarcity: a limited supply or amount of a resource.
Slide 5
CAPITALISM A.K.A. the free enterprise system
Slide 6
Three Basic Questions Every economic system must answer three
basic questions: 1. What goods should be produced? 2. How should
those goods be produced? 3. Who gets the goods that are produced?
How does our American society answer this question? The Free
Enterprise System (Capitalism)
Slide 7
Economic Systems 4 Types Communist China Free Enterprise United
States Socialist - Syria Traditional Java, Indonesia
Slide 8
The Free Enterprise Economy In a free enterprise (capitalist)
economy, individual producers get to decide WHAT to make and HOW to
make it.
Slide 9
The Free Enterprise Economy In a free enterprise (capitalist)
economy, individual producers get to decide WHAT to make and HOW to
make it. Consumers who have the money and resources are the ones
who get to buy the goods that are produced.
Slide 10
The Free Enterprise Economy In a free enterprise (capitalist)
economy, individual producers get to decide WHAT to make and HOW to
make it. Consumers who have the money and resources are the ones
who get to buy the goods that are produced. In a free enterprise
economy, we all compete against each other to make more money and
have more resources.
Slide 11
STOP and THINK In a free enterprise or capitalist economy, what
are the ADVANTAGES? What are the DISADVANTAGES?
Slide 12
What did this look like in history? In America, the Industrial
Revolution led to the start of the free enterprise (capitalist)
economic system.
Slide 13
What did this look like in history? In America, the Industrial
Revolution led to the start of the free enterprise (capitalist)
economic system. Wealthy Americans who had the money and land (the
capital) to build a factory became the business owners.
Slide 14
What did this look like in history? In America, the Industrial
Revolution led to the start of the free enterprise (capitalist)
economic system. Wealthy Americans who had the money and land (the
capital) to build a factory became the business owners. Americans
who wanted to move to the cities and find work would take a job in
these factories.
Slide 15
The Profit Motive In a free enterprise (capitalist) system, all
of us are competing against each other to make more money and have
more resources. This is called the profit motivewe are motivated by
the idea of making money!
Slide 16
Disadvantages of Capitalism During the Industrial Revolution,
this led to some disadvantages: Factory owners would pay their
workers the lowest wage possible, use child labor, and abuse their
workers. The more products the workers made, the more money the
factory owner would make.
Slide 17
Disadvantages of Capitalism During the Industrial Revolution,
this led to some disadvantages: Factory owners would pay their
workers the lowest wage possible, use child labor, and abuse their
workers. The more products the workers made, the more money the
factory owner would make. Factory owners would not spend money on
keeping their factories safe for their workers.
Slide 18
Disadvantages of Capitalism During the Industrial Revolution,
this led to some disadvantages: Factory owners would pay their
workers the lowest wage possible, use child labor, and abuse their
workers. The more products the workers made, the more money the
factory owner would make. Factory owners would not spend money on
keeping their factories safe for their workers. Factory owners did
not care that their factories polluted the environment.
Slide 19
Disadvantages of Capitalism The Free Enterprise system also has
social inequality.
Slide 20
Disadvantages of Capitalism The Free Enterprise system also has
social inequality. Factory owners became wealthier while many of
their workers remained in poverty.
Slide 21
Disadvantages of Capitalism The Free Enterprise system also has
social inequality. Factory owners became wealthier while many of
their workers remained in poverty. American society became divided
into upper class (the wealthy) and lower class (the poor)
Slide 22
Advantages of Capitalism: Economic BOOM! With the free
enterprise system, America created the largest, wealthiest, and
most innovative economy of all time!
Slide 23
Advantages of Capitalism: Economic BOOM! With the free
enterprise system, America created the largest, wealthiest, and
most innovative economy of all time! Producers used the resources
they had to create as many goods as possible. They decided what to
make, how to make it, and at what price to sell it.
Slide 24
Advantages of Capitalism: Economic BOOM! With the free
enterprise system, America created the largest, wealthiest, and
most innovative economy of all time! Producers used the resources
they had to create as many goods as possible. They decided what to
make, how to make it, and at what price to sell it. Consumers were
able to buy many new innovations that made their lives better and
easier.
Slide 25
Advantages of Capitalism: INCENTIVES! In a free enterprise
system, people respond to the incentives (rewards) to make money!
The harder you work, the more money you make. The less you work,
the less money you make.
Slide 26
Connect it to your life! How is the free enterprise system
similar to our paycheck system where you earn gold, silver, or
bronze each week?
Slide 27
Advantages of Capitalism: COMPETITION! In a free enterprise
(capitalist) system, producers compete with each other to make the
best product. When producers compete with each other, the consumers
get the best possible products to choose from! VS.
Slide 28
Go back to your t-chart! Add 2 more advantages and
disadvantages to the t-chart on the front of your notes page!
Slide 29
So who came up with the idea of the free enterprise system?
Adam Smith! He published a book called the Wealth of Nations which
stated that the best economic system is a capitalist or free
enterprise system.
Slide 30
Adam Smiths Ideas He argued that when people are able to
compete and work in their own self-interest, they help the economy
grow. Producers can make what they want, consumers can buy what
they want, and scarce resources are distributed in the most
efficient way.
Slide 31
Adam Smiths Ideas He argued that when people are able to
compete and work in their own self-interest, they help the economy
grow. Producers can make what they want, consumers can buy what
they want, and scarce resources are distributed in the most
efficient way. He also argued that a nations government should NOT
limit or interfere with businessesthis is where the term Free
Market or Free Enterprise comes from.
Slide 32
Look back at the disadvantages of the free enterprise system
How could you fix these problems? Who could protect workers who
were being abused? Who could prevent the use of child labor? Who
could help make sure factory working conditions were safe? Who
could help protect the environment?
Slide 33
THE GOVERNMENT! Tomorrow, we will begin looking at the era of
reform at time when Americans started to demand that the government
help protect the rights of the workers, the poor, the sick, and the
environment!
Slide 34
ACTIVITY: Table Posters! Take your posters that are divided
into 2 sections. In the TOP section, work to create a word web for
the term free enterprise. Your word web should contain 10 words
that you associate with free enterprise. In the BOTTOM section of
your poster, create a t-chart of the advantages and disadvantages
of free enterprise. Collaborate with your group to come up with at
least FOUR advantages and FOUR disadvantages.
Slide 35
Week 3 Exit Ticket and HW Complete the exit ticket, then assign
yourself silently!
