2. Do Now:
Since the Cuban government began allowing people to
open businesses in late 2010, nearly a quarter of a
million of them opted to work for themselves, opening
shops, selling goods, driving taxis and fixing cellphones.
Cubans also began buying and selling homes and cars
among themselves for the first time in 50 years. What
aspects of these changes do you think are good for the
Cuban people? Why? Are there any possible negative
outcomes to these free-market changes? Explain.
4.
• United States: the 3 economic decisions are
determined by individuals (…for the most
part)
5. Free Enterprise
System in which business can be conducted
freely with little government intervention
6. In the US, we have the right to…
1. own private property and enter into contracts
2. make individual choices
3. engage in economic competition
4. make decisions based on self-interest
5. participate in the economy with limited
government involvement and regulation
7. Freedom to own private property and
enter into contracts
Private property:
Goods owned by individuals
and businesses, NOT the
government
You can use it as you wish
You can buy as much as you can afford
8. Freedom to own private property and
enter into contracts
Contracts:
Agreements people make
with one another to buy
and sell goods and
services
*Legally binding even if not
written!
9. Freedom of choice
Free to do what you want
with what you own
Producers have freedom to
produce what they want for
who they want
Consumers have freedom
to purchase what they want
from who they want
10. Freedom to engage in competition
Competition
Economic rivalry between businesses selling the same or
similar product
*keeps prices “fair” and encourages producers to improve on
products
11. Freedom to make decisions based on
self-interest
Producers and consumers make choices for
their own benefit
Voluntary exchange: both parties benefit from
an exchange
12. Freedom to participate in the
economy with limited government
involvement
Individuals and businesses make
most of the decisions, NOT the
government
Government: regulator
Laws to protect workers,
consumers, and businesses
Government also provides public
services (taxes)
Redistributes wealth (Ex: welfare)
Ultimate goal: economic growth
13. Economic actors in a free
enterprise?
1. Producers
2. Consumers
3. Government
14.
15. Both products and
resources are
being exchanged
This free exchange of
goods and services is The MARKET
called….
16. 2 Kinds of Markets…
1. Product market
• All the exchanges of products (goods and
services)
2. Resource market
• All the exchanges of resources
Editor's Notes
Photo: collection of games
In contrast to Cuba where the people rely on the rationing system/ the government for all their food...In Cuba, people do not have the freedom of choice (the freedom to buy/eat what they want)… *consumers do not have the freedom to purchase what they want from who they want…. And because the government controls everything, producers do not have the freedom to produce what they want for who they want. They produce for the government and have no say in how the food is distributed / allocated
Coke > Pepsi (1960s) diet pepsi was the first diet cola to be distributed on a national scale in the US… but coca-cola immediately followed… Apple & samsung – both trying to create the best phone possible with the resources/technology that they have available…
Communist regimes like cuba & north korea –only the government / high government officials seem to benefit!
