American Free Enterprise

Land of Opportunity…

• American success due to:–Open land–Abundant natural resources–Talented labor supply fueled by

immigrants–Free enterprise

Characteristics of Free Enterprise

1) Profit is the key incentive in the American economy

2) Open opportunity – anyone can compete in the marketplace

3) Legal equality – everyone has the same rights4) People can have private property5) Voluntary exchange allows people to decide

what, when, and how they want to buy and sell.

Daily Writing Prompt

What are two characteristics of American Free Enterprise?

Public vs. Private sectors

• Public good - a shared good or service for which it would be inefficient and impractical to make consumers pay, or to exclude those who do not pay.

• Public goods are financed by the public sector – part of the economy that involves the transactions of the government

Public vs. Private sectors

• Market failures occur when the free market does not distribute resources efficiently.

• The “free rider” problem – people benefit from public goods that they have not paid for.

Public vs. Private sectors

• Private sector – the part of the economy that involves transactions of individuals and businesses

Exit Ticket

After seeing part of the film “Sicko,” do you think the United States should adopt a universal healthcare system? Would you be willing to pay higher taxes to

ensure that you will get care when you are sick?

Role of the Government in the Free Market

• Eminent domain – the right of a government to take private property for public use

• Government protects the public interest – the concerns of society as a whole.

• Regulates industries to protect the public health, safety, and well-being

The 5th Amendment

“no person shall be...deprived of life, liberty, or property, without

due process of law; nor shall private property be taken for

public use, without just compensation.”

Role of the Government in the Free Market

• Patents & copyrights give inventors and authors exclusive rights to sell their products