Download Market Forces

Market Forces
Goal 8: The learner will analyze the features of the economic system of the United
States
Objective 8.02 and 8.03
-Describe how the free enterprise system encourages private ownership of property and promotes
individual initiative by defining the terms listed in this section.
-Explain the circular flow of economic activities and how interactions determine the prices of goods
and services by completing the graphic organizer.
Review
Name that Economy
•You will be placed in a small group.
•A description of an imaginary country will be revealed. Your group will have 5 seconds to
huddle and discuss the type of economy that is being described.
•At the end of 5 seconds, one of your group members will hold the appropriate card based
on the group’s decision.
Scenario A
•After much deliberation, state planners in country A have decided that it would be in their
country’s best interest to produce more automobiles than textiles. The state planners have
allocated the resources needed to construct the automobiles and instructed the various
factories on how many automobiles should be produced.
Scenario B
•In country B, the CEO of Ryland Audio recently decided to increase production levels on
the company’s latest version of an MP3 player and decrease production levels on the
company’s compact disc players. The decision was made since more profit is to be gained by
meeting demand and selling MP3 players.
Scenario C
•When times are difficult in Country C, people tend to rely on their communities for
assistance. Changing temperatures, which greatly alter harvests, can lead to troublesome
times. In country C it is very important to form strong bonds with neighbors with whom
people can share or trade.
Scenario D
•As long as the business owners in Country D can abide by fair trade policies, they can
produce and sell whatever goods they please. For example, owners of a video game company
in country D decided to wait until the holidays to release a new game to increase the
anticipation and profit for the game.
Warm Up
Copy and Answer the following question:
Explain why you think that you should or should not download music for free from the
Internet. Include at least three reasons to support your argument.
Lecture:
Free Enterprise
Economic Rights
•Private Property
–Property owned by individuals or companies, not by the government.
–The ability to own this is expressly protected by the Constitution.
•Voluntary Exchange
–Allows people to decide what and when they want to buy and sell.
Protecting your Product
•Patent- gives the inventor of a new product the right to produce and sell it for 20 years.
•Copyright- gives an author the exclusive right to sell his or her creative works.
–As a producer these protections give you security, equity and freedom.
Circular flow of economic activity
•Government plays a part in the circular flow of the economy in most modern economies
•They buy land, labor and capital to produce goods, and they provide certain goods and
services as well.
•They also collect taxes from individuals and businesses.
•They then give money to individuals and businesses.
Economic Interdependence
•This is the system that is created by a mixed economic model and therefore makes the
government, business and the individual interlocked in economics.
Activity
Circular Flow Model
You will receive a blank Circular Flow Model, on which you will place the specific examples
of economic activity.
Review
Discuss the Circular Flow Model and prepare vocabulary for next class.