Capitalism

• The underlying theme of capitalism is the use

of wealth to create more wealth. In the case
of a single owner of an industrial enterprise
(such as a factory), the system reveals a
characteristic distinction. All the profits go to
one man, though many others share the work.
Full-scale capitalism results in an inevitable
divide between employer and employed, or
capital and labor.

What is Capitalism?

• Capitalism – economic

system in which
production, distribution,
and exchange of wealth is
privately owned with the
goal of making profit in a
market economy.

• Competition - rivalry in

supplying or acquiring an
economic service or good

Capitalism

Multiple Choice

What does privately owned mean?

• It's owned by the government

• It's owned by the individuals

• market economy - an economy in

which decisions regarding
investment , production and
distribution are based on supply
and demand

• prices of goods and services are

determined in a free price system

**The great thing about the free
market system is that prices and
quantities tend to move toward
equilibrium and, for the most part,
keep the market stable.

Market Economy

• supply and demand is an

economic model of price
determination in a market.

• in a competitive market, the

unit price for a particular good
will vary until it settles at a
point where the quantity
demanded by consumers will
equal the quantity supplied by
producers (equilibrium)

Supply and Demand

• If demand increases and supply remains unchanged, a

shortage occurs, leading to a higher equilibrium price.

• If demand decreases and supply remains unchanged, a

surplus occurs, leading to a lower equilibrium price.

• If demand remains unchanged and supply increases, a

surplus occurs, leading to a lower equilibrium price.

• If demand remains unchanged and supply decreases, a

shortage occurs, leading to a higher equilibrium price.

Laws of Supply and Demand

Multiple Choice

After building the Hoover Dam, California had more energy than it needed for a while. The price of fuel is most likely going to be…?

• high

• low

Multiple Choice

In 2008 at the beginning of Obama’s presidency, a recession occurred causing the housing market to crash. This led to many repossessed homes and evicted tenants with no way to pay mortgages or rent. After this what happened to house prices?

• It went up

• It went down

Multiple Choice

In 2021 the permission to continue the Keystone XL pipeline was not approved by the U.S Government, and the price of oil it would supply has gone up. Will there be a shortage or a surplus of oil?

• There will be a shortage

• There will be a surplus

Multiple Choice

In 1972, selling products hunted from Polar Bears was banned, though the demand is still prevalent. What will happen to the price?

• The price will increase

• The price will decrease

What pattern can you see?

Surplus = lower price
Shortage = higher price

• In the early 1800s the middle-class owners of

railroads, factories, and mines began
supporting laissez-faire. They believed that
freedom from government controls would
mean a growing economy with material
progress for all people.

Laissez-Faire Economics

Remember

him?!

Multiple Choice

What does laissez-faire mean?

• Government has full control

• Government has a little bit of control

• Government has no control

• Profit making without profit

sharing – seed of discontent
planted among lower class
(low wages) because factory
owner were so greedy

• This also plays into supply

and demand of workers and
employees which is very
apparent today

Low Wages and Unhappy People