Econ CH 3 Lesson 1
Econ CH 3 Lesson 1
Econ CH 3 Lesson 1
LESSON 1
regulation or interference
People often use the terms free enterprise, free market, and capitalism
employer, job location, leave job, business can hire workers of their
choice, produce what they think will be profitable, as many items as they
want, sell them wherever they please, as price they choose
2. Voluntary Exchange: buyers and sellers free to exchange
wish, use as they wish (if it doesnt interfere with rights of others)
Private property gives incentive to work, save and invest. Protected in US
4. Profit Motive: free to risk our wealth in a business venture. Profit is what is
left after expenses are subtracted form sales. Profit motive is incentive to improve
ones material well-being responsible for economic growth in an economy.
5. Competition: struggle among sellers to attract consumers with best products
at lowest prices. Possible b/c businesses are free to produce what they think will
be profitable.
Consumers benefit b/c businesses are always trying to produce newer, better,
employer and job location would not be possible without free enterprise
capitalism
2. Variety of Goods
3. Adapting to Change: market economies adjust daily to forces of
lighter-weight materials, etc. Also alternative energy sources come from wind
farms, solar energy, biofuels (made from renewable plant and animal material,
vegetable oils, industrial waste).
scarce, have utility, are transferable from one person to another. Wealth
is created when more and better products are produced.
GDP: dollar value of all final goods, services, and structures produced within a