The document discusses the key economic concepts of the free enterprise system and the Industrial Revolution. It provides background on Adam Smith and his seminal work The Wealth of Nations, in which he advocated for laissez-faire economic policies and explained how the invisible hand of the free market benefits the economy through supply and demand. The Industrial Revolution led to major changes in how people lived and worked as economic activity shifted away from the home and into factories.

1. The
Industrial
Revolution

2. The Industrial Revolution
• Economic changes in Britain that
spread to the rest of the World.
• Major changes in where people
lived, working conditions and
standards of living because of the
Industrial Revolution.

3. The Industrial Revolution
Make a list of 10 things that you notice in this picture

4. Essential Questions
• How does the free enterprise
system work?
• What factors caused the
Industrial Revolution?
• How did the Industrial Revolution
change the ways people lived?

5. Wednesday, February 8, 2012
• What group redrew the map of Europe following
the Napoleonic Wars in order to restore a
balance of power?
– Congress of Vienna
• Who lead the independence movements in
Venezuela, Columbia, Peru and Bolivia?
– Simon Bolivar
• What reform movement attempted to end the
practice of slavery?
– Abolition
• In what year did Mexico gain its independence
from Spain?
– 1821
• What did Napoleon sell to the United States in
1803?
– Louisiana

6. Monday, February 13, 2012
• What movement were
Locke, Rousseau, Montesquieu, Hobbes and
Voltaire a part of?
– The Enlightenment
• Name three leaders of Latin American
independence movements?
– Simón Bolívar, José San Martín, Toussaint
L’Ouverture, and Miguel Hidalgo
• Who was the author of The Wealth of Nations?
– Adam Smith
• Who advocated using violence against his
political opponents during the Reign of Terror
during the French Revolution?
– Robespierre
• What is an ABSOLUTE MONARCH?
– Hereditary Rulers (ex. King) with unlimited and

7. E C O N O M I C S
• describes how people meet their
needs by making, distributing and
using goods and services

8. E C O N O M I S T S
study how people
– work and earn money
– save and invest money
– Use their time, energy and satisfy
their needs

9. Free Enterprise System
the freedom to make their own
choices in deciding what to buy,
where to work, and what to make.
Individuals are free to make their
own economic decisions.

10. Free Enterprise System
People own property.
Some people invest in order to
make profits
Profit - extra money that is made
after all expenses are paid.

11. Free Enterprise
• Several producers
make same goods
or provide same
services
• Gives consumers
choices.
• Improves quality
and reduces
prices.

12. Free Enterprise
• What is the ROLE
OF GOVERNMENT?
• Government
interference is
LIMITED!!!!!!!!!!!

13. Free Enterprise
• Government
– Supplies some
services
– Sets rules
– Settles economic
disputes

14. Free Enterprise
• PRODUCERS
– Those that make
and sell services
• CONSUMERS
– Those that buy
and use goods
and services

15. Free Enterprise
• LAW OF SUPPLY
& DEMAND
– SUPPLY is how
much producers
make available
– DEMAND is how
much of a product
consumers are
willing to buy

16. A D A M S M I T H
The Prophet of Free
Enterprise
The Wealth of
Nations
Published 1776
The PROPHET OF PROFITS

17. The Wealth of Nations
• Smith explained
– The benefits of
division of labor
– How supply and
demand determine
prices
– How inefficient
businesses fail
– Successful
businesses sell the
best goods sell at the
best prices

18. The Wealth of Nations
• Smith argued
– That each person
pursues his or her
own interest. So
– An INVISIBLE HAND
guides individual
actions that benefits
the economy.

19. The Wealth of Nations
• Smith argued for
– LAISSEZ-FAIRE
(hands-off)
economic policy
– The government
does NOT interfer
with the economy.

20. The Wealth of Nations
Quote 1
“The market price of every particular
commodity is regulated by the
proportion between the quantity
which is actually brought to
market, and the demand of those who
are willing to pay the natural price of
the commodity.”
• What is Smith attempting to explain?

21. The Wealth of Nations
Quote 2
“As every individual, therefore, endeavors as
much as he can both to employ his capital in
the support of domestic industry, and so to
direct that industry that its produce may be
of the greatest value; every individual
necessarily labors to render the annual
revenue of the society as great as he can. He
generally, indeed, neither intends to promote
the public interest, nor knows how much he
is promoting it.”
• What is Smith attempting to explain?