Free Enterprise

The Free Enterprise System

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Objectives

We will explain the impact of economic concepts with in the free enterprise, systems such as supply and demand, profit, and world competition on the economy of Texas.

I will complete my Quizziz lesson.

E.Q. How did Covid -19 affect supply and demand?

Free Enterprise

Thousands of Texans have created businesses under the free enterprise system. Many business owners have become wealthy because of the free enterprise system. Another name for free enterprise is capitalism.

Capitalism

In a capitalism, the economy is based on supply and demand. You are given the opportunity to make a profit. Profit is money that a business makes after it pays its expenses.

Risk for Failure

Not all businesses are huge, millions of business owners make enough money to support themselves and their families without becoming wealthy. However, by starting a business, an individual also opens himself to the possibility of failure. The possibility for failure is the main risk that people face in the free enterprise system.

Multiple Choice

What is the main risk people face in free enterprise?

• supply and demand

• failure

• choice

Market Economy

The American free system economy is one example of a market economy. In a market economy people are free to buy and sell whatever goods they wish. No one will force you to buy a particular brand or style. You can choose which store to shop at, how many, and so on. In a market economy, government interference is limited. The Government passes and enforces laws to ensure businesses are run fairly and safely.

Free to Choose

Because customers are free to choose which products to buy companies must figure out how to attract customers. Pricing is important. However, pricing is not that simple.

Multiple Choice

Which of the following examples is NOT an example of Free Enterprise?

• Santiago sells video games on Ebay.

• Jazzlynne can buy both Vans and Converse.

• Aaron buys his dog clothes.

• The Cuban Government heavily regulates business.

Supply and Demand

Pricing is governed by two economic principles supply and demand. Supply is how much of a given product businesses are producing and demand refers to how much of a product buyers are willing to purchase. Supply and demand work together to determine prices.

Effects of Supply/Demand

The effects of supply and demand can be seen on prices can be seen in many industries.

Multiple Choice

The video we just saw shows ........

• a high demand for lumber and low supply

• a low demand for lumber and high supply

Competition

The rivalry between companies selling similar products is known as competition. If two companies produce goods of equal quality but price them differently, more customers will be drawn to the company with lower prices. As a result, the presence of competition can often force lower prices.

Open Ended

Does Cuba have free enterprise? How do you know?

Major Texas Industries

Agriculture has been a big component of the Texas economy. Agribusiness- large scale farming, brings in $36 billion to the state each year. Like farming, ranching has long been a major industry in Texas. Today, Texas produces more beef than any other state.

Oil and Gas Industry

The oil and gas industry is a major part of the economy. Texas produces more oil than any other state. The state's petroleum refineries handle about a quarter of all refining in the country. Texas is also the country's leading natural gas producer. Texas and Louisiana together account for 40% of the natural gas produced in the U.S.

Aviation and Aerospace Industries

Today Texas is one of the major centers for aircraft manufacturing. Companies such as Lockheed Martin Aeronautics and Bell Helicopter, both in Fort Worth, produce planes and helicopters for the U. S. military. Also two major Airlines have their headquarters in Texas. American Airlines in Fort Worth and Southwest Airlines based in Dallas.

Multiple Select

Which of the following airlines have their headquarters in Texas? Check both that apply.

• Delta Airlines

• American Airlines

• United Airlines

• Southwest Airlines

Houston Space Center

For more than 50 years, NASA’s Johnson Space Center (JSC) in Houston has led our nation and the world on a continuing adventure of human exploration and discovery. The center has played a vital role in powering our country into the 21st century through technological innovations and scientific discoveries.

Multiple Choice

Johnson Space Center is named after .........

Medical Industry

Medical researchers have worked hard to meet the needs of the world. As a result, Texas has earned a reputation as a leader in medicine. Medical research enters around the state have draw millions of dollars in funding for medical research. Anderson Cancer Center in Houston, has been called one of the best in the country.

Trade with Mexico

Texas and Mexico have been natural trading partners for many years. Texas has long been the main entry point for Mexican products. These products include machinery, vehicles, oil, and agricultural goods.

NAFTA

The North American Free Trade Agreement was signed in 1994. This agreement eliminated many trade barriers. Many of the trade goods flowing between the U. S. and Mexico pass through Texas. As a result trade between Texas and Mexico doubled.

USMCA Agreement

In 2018 NAFTA was revamped and named the USMCA Agreement.

Poll

Do you think the UAMCA Agreement was a good deal?

• Yes

• No

Trade with Other Countries

Besides Mexico, the countries to which Texas exports the most goods are Canada, China, and Brazil. These exports are produced by companies all around Texas.

Mark as Done in the GC.