ECONOMIC SYSTEMS INTRO TO BUSINESS COACH CURTIS – COLLIERVILLE HIGH Chapter 2
Three key economic questions to be answered;
What goods and services are to be produced?How should the goods and services be
produced?For whom should the goods and services be
produced?
Who will benefit?
Determining which of its citizens should benefit from the production of goods and services is something each nation must decide.
Market Economy
The three questions are answered. Individuals free to engage in business
transactions. Usually found in democratic government: USAJapanCapitalist Countries
Mixed Economy
Most countriesCombine Government and Private OwnershipUSAPost-officeSchoolsTown of Collierville (Water/Trash Bill)
CAPITALISM
Economic resources are usually privately owned by individuals rather than by the government.
Individual owners free to decide what they will produce with the resources.
Voluntary Exchange
MARKET
Arrangement that allows buyers and sellers to come together to trade goods, services and resources
MARKETPLACE
Any place where buyers and sellers exchange goods, services, and some form of money.
Example: When government hires new employees they receive human resources in exchange for compensation.
VOLUNTARY EXCHANGE
The act of buyers and sellers freely and willingly engaging in market transactions.
PROFIT
The money left from sales after subtracting all the costs of operating the business.
Run a risk of losing invested moneyOwners face extra hoursStress
Competition
Rivalry among businesses to sell their goods and services to buyers
The reason for advertisementBuy “new” and “improved” productsWho else is using their productDog eat dog world
Freedom of Choice
Enter the business you want to enterSelect the career you want mostEarn a profit by competing in business
Government Regulations
Not pure capitalismPrevention of harming othersExample: Can not dispose of chemical
wasteCan’t practice surgery unless you have been
granted a medical license by the appropriate agency
Previously controlled economies “new rights”
The right to earn a fair profitThe right to do business with minimal
government regulationThe rigth to fail
Complete Questions
An establishment or enterprise that supplies goods and services in exchange for some form of payment is _______________
The key economic questions must be answered because resources are _________________
A place where __________ and __________ exchange goods and service for money is called the marketplace.
The second question in the key economic questions is: _______ should the goods and services be produced.
The third question in the key economic questions is ____ ___ should the good and services be produced.