Capitalism

Capitalism

and

the Free Enterprise System

By Dewitt Johnson

Where citizens own the factors of production.

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​People can choose how to use the factors of production.

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Includes land, automobiles, possessions and education.

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What is capitalism?

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Free to own a business, choose a job, or buy the product of your choice.

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​Business are allowed to compete with a minimum of government rules.

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What is Free-Enterprise (Economic Freedom)?

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1. Economic Freedom

2. ​Voluntary Exchange

3. ​Private Property Rights

4. ​The Profit Motive

5. Competition​

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What makes Capitalism work?

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Multiple Choice

This economic system is based on competition, profits, and self-interest.

• Socialism
• Communism
• Capitalism

Multiple Choice

What is capitalism?

• government control of production and goods
• private control of production and goods for profit
• employee control of production, goods, and profit
• international control of production and goods for profit

Sales taking place freely between buyers and sellers.

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Any purchase you make in America is voluntarily exchanged.

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Opposite would be command economy where some items are given.​

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Voluntary Exchange

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​​People can own and control their possessions and skills/abilities

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Opposite in a command economy all is owned by the government.​

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Private Property Rights

Multiple Choice

Capitalism is based on the _______ ownership of wealth.

• private

• public

Multiple Choice

Susan offers to trade her old iPod for Claudia's cell phone and Claudia accepts. Assuming both products work perfectly, we can conclude that

• both people have gained because the exchange was voluntary and non-fraudulent.

• Susan places the same value on cell phones as she does for iPods.

• neither party has gained because the exchange was fraudulent.

• Claudia is now happier than Susan.

Multiple Choice

This characteristic of a mixed economy states that the vast majority of labor, resources, and capital goods are owned by individuals rather than by the government.

• Private Property

• Freedom of enterprise and choice

• Motive of Self-Interest

• Competition

Encouraging people to improve their  material well-being.

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​Generally measured in money.

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​It's the opposite in a command economy where profit is not allowed.

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Profit Motive

How sellers attract consumers to their market.

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​The factors mainly seen are cost vs. quality.

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​Opposite in a command economy all is owned by the government.

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Competition

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Multiple Choice

The term used to describe money gained after a sale.

• cost price
• selling price
• profit 
• loss

Multiple Select

What two (select two) things would you probably compare when buying rice at the convenience store?

• Marketing

• Price

• Place

• Quality