Flow Chart – American Free Enterprise, pgs. 52-53
American Free Enterprise
Economic
Freedom
Property Rights
Profit Motive
Voluntary
Exchange
Competition
Open
Opportunity
Definition
Definition
Definition
Definition
Definition
Definition
Benefits
Benefits
Benefits
Benefits
Benefits
Benefits
Chapter 3 – Features of American Free Enterprise
Power Point Project, pgs. 51-70
Introduction Slide
Include on slide:
1. Title –Features of American Free Enterprise
2. Your Name
3. Picture (Any picture to represent the
American Economy)
Each additional Slide should have:
1. Title (Feature)
2. Summary and description of the
feature
3. Picture(s) to represent each of the
features of American Free Enterprise
4. Description of how each picture
represents the feature
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
Slide 1 – Introduction Slide
Slide 2 - Property Rights
Slide 3 - Profit Motive
Slide 4 - Voluntary Exchange
Slide 5 - Competition
Slide 6 - Role of the Consumer
Slide 7 - Role of the Government (Information
and Free Enterprise, Protecting Health, Safety,
and
Well-Being, Negative Effects of Regulation)
Slide 8 - Major Federal Regulatory Agencies
(Explain 5 from pg. 55)
Slide 9 - Technology and Productivity (include
Technological Progress)
Slide 10 - Public Good (Include 3 Features,
define public and private sector)
Slide 11 – Free-Rider Problem and Market
Failure
Slide 20 – Positive and Negative Externalities
Journal Entry: Antz
 Briefly describe some ways
that the movie Antz movie
modeled the Command
Economic philosophies.
 Can the ant colony mentality
work as an economic
system? Explain why or why
not.
 Do you feel that people in
the U.S. believe more in the
greater good of the “colony”,
or the individual? Explain
your answer.
Chapter 3 – Journal Entry

Describe in your own words,
why you feel that economic
freedom, property rights,
profit motive, voluntary
exchange and competition are
beneficial to the American
economy.
Chapter 3 – American Free Enterprise
1.
2.
There are over 18 million
businesses in the United States;
3 million minority-owned
businesses.
America has been a place where
anyone, from any background
can achieve success.
Chapter 3 – American Free Enterprise
3.
Describe the following goals of the U.S.
Government:
1.
Employment – provide jobs for
everyone who is able to work
(economists consider 4-6%
desirable; current 9.7)
2.
Growth – each generation should
enjoy a higher standard of living;
economy must provide additional
goods and services each year (GDP
3.
Stability – keeping economy stable
and secure gives consumers,
producers, and investors
confidence
1.
Price – gov’t aims to prevent
sudden, drastic shifts in
prices; prices up – hurts
consumer, prices down –
hurts producers
2.
Financial Institutions –
banks are secure, money
protected from fraud or
mismanagement
Chapter 3 – American Free Enterprise
5.
6.
Features of Public Goods:
1. Consumers pay individually:
is impractical. Government
collects taxes to fund
programs.
2. Excluding nonpayers:
certain facilities should be
available to all, excluding
nonpayers is unrealistic.
3. Any number of consumers
can use them without
reducing the benefits to any
single consumer.
Military, interstate highway,
waste management, national
parks, firefighter, education
Chapter 3 – American Free Enterprise
7.
8.
9.
10.
Cost and Benefits
1.
The benefit to each individual is less
than the cost that each would have to
pay if it were provided privately
2.
The total benefits to society are
greater than the total cost
Public sector finances and produces public
goods, private sector involves transactions
of individuals and businesses.
Free Riders are people who do not pay for
certain goods or services, but reap the
benefits of it.
Market Failures are situations when the
market, on its own, does not distribute
resources efficiently.
•
Certain production is impractical and
does not generate profit, such as
roads, highways.
•
Education, paid for through taxes.
Certain people do not pay taxes, yet
reap the benefit of education.
Chapter 3 – American Free Enterprise
11.
12.
13.
Externality – an economic side
effect/impact of one person’s actions, that
generates benefits or costs to someone
(bystander) other than the person deciding
how much to produce or consume
Positive externality – beneficial side effects
of the production of goods and services
•
Education creates a positive
externality because the more
educated people are less likely to
engage in violent crime, which makes
everyone in the community, even
people who are not well educated,
better off.
Negative externality – negative side effect
of the production of goods and services
•
Theft and losses endured by WalMart, are passed on to the consumers
by way of increased prices on goods
Chapter 3 – American Free Enterprise
14.
Goals of the Government:
1.
Encourages the creation of
positive externalities, such as
education
2.
Aims to limit negative
externalities, such as acid rain
created from power plants and
auto emissions
Chapter 3 – American Free Enterprise
15.
16.
17.
Poverty threshold is an income level
below that which is needed to support
families or households.
Poverty threshold in the United States in
2002:
•
Single parent under age 65, with
one child, $12,120
•
Four person family with two
children, $18,400
Established in the 1930s, the
government welfare plan collects taxes
from individuals, then redistributes
them to others. Government aid for the
poor.
Chapter 3 – American Free Enterprise
15.
16.
Cash transfers are direct payments of money to poor,
disabled, and retired people.
Cash Transfers
1.
Temporary Assistance for Needy Families –
TANF replaced the AFDC discontinued direct
federal welfare; sends money to states, which
design and run their programs. States must
adhere to strict federal rules; designed to free
people from welfare dependence
2.
Social Security – created in 1935, during the
great depression, provides cash transfers of
retirement income to the elderly and living
expenses to disabled Americans. Takes payroll
taxes from current workers and redistributes
them to current recipients
3.
Unemployment Insurance – Funded by federal
and state governments. Unemployment checks
provide money to eligible workers who have lost
their jobs through no fault of their own
4.
Workers Compensation – state funded program
that pays injured workers money for the lost
wages they have endured as a result of their
injuries
Chapter 3 – American Free Enterprise
20.
21.
22.
23.
In-kind benefits are goods and services that
are provided for free or at greatly reduced
prices.
•
Food stamps, subsidized housing,
legal aids, etc.
Medical benefits provided in the united
states are based on categories such as
health insurance for the elderly, disabled,
and poor
•
Medicare covers Americans over 65,
as well as the disabled
•
Medicaid covers poor who are
unemployed or not covered by
employers insurance plans
Federal, state, and local governments all
provide educational opportunities.
Education programs add to a nation’s
human capital and labor productivity.
President Bush challenged “faith-based
initiatives” (charities, community groups,
churches) to assist people in need.
Traditionally, shown the ability to save and
change lives.
Due Friday 9 - 4
1.
2.
3.
4.
5.
Antz Video Questions
Flow Chart– Free Enterprise
Chapter 3 Guided Reading
Worksheet
Crossword Puzzle
VIS Terms
Chapter 3 – VIS Terms
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Property Rights
Profit Motive
Voluntary Exchange
Consumer Sovereignty
Public Goods
Public Sector
Private Sector
Free Rider
Externalities
Welfare