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Understanding Free Enterprise: Choices and Pillars of Economic Growth

This section delves into the concept of free enterprise, emphasizing the freedom individuals have to make economic choices that yield the greatest benefits. It highlights the six fundamental pillars supporting free enterprise, with a particular focus on the significance of private property. By understanding these key elements, individuals can appreciate how free enterprise drives economic growth and innovation, fostering a vibrant marketplace where choices empower consumers and entrepreneurs alike.

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Understanding Free Enterprise: Choices and Pillars of Economic Growth

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  1. JA Economics

    Chapter 2
  2. Page 16 Free Enterprise Free to make choices Make the choice they believe offer them the most benefits Gets it’s strength and support from 6 pillars
  3. Page 17 FREE enterprise Private Property
  4. Page 17 Private Property Resource/product owned by individuals or businesses Protected by the U.S. constitution Businesses have an incentive to maintain their property
  5. Page 17 FREE enterprise Private Property Specialization
  6. Page 17 Specialization Businesses and people One product or a few parts of one product Contributes to higher wages and profits
  7. Page 18 FREE enterprise Voluntary exchange Private Property Specialization
  8. Page 18 Voluntary Exchange Because of specialization No one person or business makes one entire product Everyone is dependent on other people
  9. Page 18 FREE enterprise Voluntary exchange Private Property The Price System Specialization
  10. Page 18-19 The Price System Buyers and sellers look towards the price to send them a message Provides incentives Businesses have a desire to make a profit
  11. Page 18-19 The Price System Price doesn’t determine all economic behavior Values Charity Opportunity Convenience, service, loyalty, quality etc
  12. Page 16 FREE enterprise Market competition Voluntary exchange Private Property The Price System Specialization
  13. Page 20 Market Competition Define Market Resources Products Scarcity
  14. Page 16 FREE enterprise Market competition entrepreneurship Voluntary exchange Private Property The Price System Specialization
  15. Page 21 Entrepreneurship Helps the economy grow and change Three characteristics of an entrepreneur Innovative thinking Management skills Risk taker Page 15 in the study guide
  16. Page 22 Economic Systems Market system (free enterprise) Command system Traditional system Mixed – no pure form
  17. Page 23 Economic Models Represent the real world Descriptive, predictive and ideal Want-satisfaction chain in chapter 1 The circular flow of money, resources and products.
  18. Goods and Services Market G & S Goods and Services households Production Resources Market Resources Resources
  19. Circular flow of money How it grows How it shrinks
  20. Adam Smith Born in Scotland in 1723 University of Glasgow at age 14 Economy evolved People traded with once another
  21. Adam Smith Born in Scotland in 1723 University of Glasgow at age 14 Economy evolved People traded with once another
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