Study Guide
Main Idea
An economic system is a set of
rules that governs what goods and
services to produce, how to produce
them, and for whom they are
produced. 
1
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Study Guide (cont.)
Key Terms
– economy 
– economic system 
– traditional economy 
– command economy 
– market economy
2
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Study Guide (cont.)
Objectives
After studying this section, you will be able to: 
– Describe the characteristics of the traditional,
command, and market economies. 
– Explain the advantages and disadvantages of
the traditional, command, and market
economies. 
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3
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Traditional Economies
• Many of our actions spring from habit and
custom. 
• In a society with a traditional economy,
the allocation of scarce resources, and
nearly all other economic activity, stems
from ritual, habit, or custom. 
• Habit and custom also dictate most social
behavior.
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5
Examples
• Many societies–such as the central African
Mbuti, the Australian Aborigines, and other
indigenous peoples around the world–are
examples of traditional economies. 
• The Inuits of northern Canada in the 1800s
provide an especially interesting case of a
traditional economy. 
– The Inuit hunted, and shared the spoils of the
hunt with other families. 
– The hunter most responsible for the kill had first
choice, the second hunter to help with the kill
chose next, and so on.
6
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Examples (cont.)
– The hunter had the honor of the kill
and the respect of the village, rather
than a physical claim to the entire
kill. 
– Because of this tradition of sharing,
and as long as skilled hunters lived
in the community, a village could
survive the long harsh winters.
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Advantages
• The main strength of a traditional
economy is that everyone knows which
role to play. 
• Little uncertainty exists over WHAT to produce. 
– If you are born into a family of hunters,
you hunt. 
– If you are born into a family of farmers,
you farm. 
• Likewise, little uncertainty exists over HOW
to produce, because you do everything the
same way your parents did.
8
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Advantages (cont.)
• Finally, the FOR WHOM question is
determined by the customs and traditions
of the society. 
• Life is generally stable, predictable, and
continuous.
9
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Disadvantages
• The main drawback of the traditional
economy is that it tends to discourage new
ideas and new ways of doing things. 
• The strict roles in a traditional society have
the effect of punishing people who act
differently or break rules. 
• The lack of progress leads to a lower
standard of living than in other types of
economic societies.
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11
Command Economies
• Other societies have a command
economy, one in which a central authority
makes most of the WHAT, HOW, and FOR
WHOM decisions. 
• Economic decisions are made by the
government: the people have little, if any,
influence over how the basic economic
questions are answered.
12
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Examples
• There are few command economies in the
world today, but they still can be found in
North Korea and Cuba. 
• In the former Soviet Union, until recently a
command economy, the government made
the major economic decisions. 
13
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Advantages
• The main strength of a command system
is that it can change direction drastically in
a relatively short time. 
• The former Soviet Union went from a rural
(or primitive) agricultural society to a leading
industrial nation in just a few decades. 
• Another advantage is that there is little
uncertainty in this type of economy. 
• Most command economies tend to provide
minimum levels of education, health, and
other public services at little or no cost to
its people.
14
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Disadvantages
• One disadvantage of a command system is
that it is not designed to meet the wants of
consumers, even though many basic needs
are provided. 
• A second disadvantage is that the system
does not give people the incentive to work
hard. 
– At one time the former Soviet Union set some
production quotas by weight. 
– This resulted in workers finding ways to add
weight to products, thus reducing the number of
units they needed to fill the quota.
15
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Disadvantages (cont.)
• Finally, people with new or unique ideas
find it difficult to get ahead in a command
economy. 
• Each person is expected to perform a job in
a factory, in the bureaucracy, or on a farm,
according to the economic decisions made
by central planners.
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Market Economies
• In a market economy, people and firms
act in their own best interests to answer
the WHAT, HOW, and FOR WHOM
questions. 
• In a market economy, people’s decisions to
buy, or not, act as votes.
17
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Market Economies (cont.)
• After the “votes” are counted, producers
know what people want. 
• Because producers are always looking for
goods and services that consumers will
buy, the consumer plays a key role in
determining WHAT to produce.
18
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Examples
• The United States, Canada, Japan, South
Korea, Singapore, Germany, France,
Great Britain, and other parts of Western
Europe are all based on the concept of a
market economy. 
19
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Advantages
• One advantage of a market economy is
that, over time, it can adjust to change. 
– During the gasoline shortages of the 1970s the
consumers’ demand for large, inefficient cars
decreased. 
– Because auto makers still wanted to sell cars,
they moved resources from the production of
large cars to small ones. 
– When gas prices finally declined in the mid1980s, the trend slowly began to reverse.
20
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Advantages (cont.)
• A second major strength of the market
economy is its high degree of individual
freedom. 
• Producers may make whatever they think
will sell. 
• Consumers, on the other hand, spend their
money on the goods and services they
prefer.
21
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Advantages (cont.)
• A third strength is the relatively small
degree of government interference. 
• As long as competition exists, the market
economy tends to take care of itself. 
22
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Advantages (cont.)
• Another strength of the market economy
is the incredible variety of goods and
services available to consumers. 
• Almost any product can and will be
produced if a buyer for it exists.
• A final strength is the high degree of
consumer satisfaction.
23
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Disadvantages
• One of the disadvantages of the market
economy is that it does not provide for the
basic needs of everyone in the society–
some members of the society may be too
young, too old, or too sick to care for
themselves. 
24
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Disadvantages (cont.)
• Another disadvantage of a market
economy is the relatively high degree of
uncertainty that workers and businesses
face as the result of change.
25
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Section Assessment (cont.)
Describe the characteristics of a
traditional economy.
A traditional economy sets economic
roles; life is stable, predictable,
continuous; and discourages ideas.
26
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Section Assessment (cont.)
Identify the advantages and
disadvantages of a command
economy.
Advantages: great change in short
time; Disadvantages: does not meet
needs and wants of consumers; lacks
incentives to work hard; large
bureaucracy; little flexibility; ideas
discouraged
27
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Section Assessment (cont.)
Identify the advantages and
disadvantages of a market economy.
Advantages: adjust to change
gradually; individual freedom; lack of
government interference; produces
great variety of goods and services;
high consumer satisfaction;
Disadvantages: does not provide
basic needs of everyone; lacks
services people want and need;
workers and businesses face high
uncertainty as a result of change.
28
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Section Assessment (cont.)
Analyzing information How are
roles defined in a traditional economy?
Roles are set by long-standing
customs.
29
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Section Assessment (cont.)
Making Comparisons How are the
WHAT, HOW, and FOR WHOM
questions answered in the command
and market economies?
Command: central authority answers
questions; Market: people and firms
acting in their own best interests
provide answers.
30
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Economic Security
• Americans desire protection from such
adverse economic events as layoffs and
illnesses. 
• States have set up funds to help workers
who lose their jobs. 
• On the national level, Congress has set up
Social Security – a federal program of
disability and retirement benefits that
covers most working people.
32
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Price Stability
• Another goal is to have stable prices. 
• If inflation– a rise in the general level of
prices – occurs, workers need more money
to pay for food, clothing, and shelter. 
• People who live on a fixed income – an
income that does not increase even though
prices go up – find that bills are harder to
pay and that planning for the future is more
difficult.
33
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Price Stability (cont.)
• High rates of inflation, causing rises in
interest rates, can discourage business
activity by discouraging businesses from
borrowing and spending. 
• Price stability makes budgeting easier and
adds a degree of certainty to
the future.
34
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• Chapter 2, Section 3
Define the following:
•
•
•
•
•
•
•
•
•
36
Capitalism
Free Enterprise
Voluntary Exchange
Private Property Rights
Profit
Profit Motive
Competition
Mixed Economy
Modified Private Enterprise Economy
• List the 5 Characteristics of a Free Enterprise Economy.
• What is the Role of the Entrepreneur?
• What is the Role of the Consumer? (two things.)
• What is the Role of the Government? (5 things.)
• Give an example of each of the 5 roles the government
plays in a Market Economy.
37
Study Guide (cont.)
Objectives
After studying this section, you will be able to: 
– Explore the characteristics of a free
enterprise system. 
– Describe the role of the entrepreneur, the
consumer, and government in a free
enterprise economy. 
Applying Economic Concepts
Voluntary Exchange Why is voluntary
exchange one of the most popular features of a
market economy?
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38
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Introduction
• A market economy is normally based on a
system of capitalism, where private
citizens, many of whom are entrepreneurs,
own the factors of production. 
• Free enterprise is another term used to
describe the American economy. 
• In a free enterprise economy, competition is
allowed to flourish with a minimum of
government interference.
39
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Competition and Free Enterprise
• A free enterprise economy has five
important characteristics – economic
freedom, voluntary exchange, private
property rights, the profit motive, and
competition.
40
Voluntary Exchange
• A second characteristic of capitalism is
voluntary exchange – the act of buyers
and sellers freely and willingly engaging in
market transactions. 
• Market transactions are made in such a
way that both the buyer and the seller are
better off after the exchange than before
it occurred. 
• Buyers, for example, can do many things
with their money. 
• With voluntary exchange, sellers also have
many opportunities to sell their products.
41
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Private Property Rights
• Another major feature of capitalism is the
concept of private property rights, the
privilege that entitles people to own and
control their possessions as they wish. 
• Private property gives people the incentive
to work, save, and invest.
42
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Profit Motive
• Under free enterprise and capitalism,
people are free to risk their savings or any
part of their wealth in a business venture. 
• Profit is the extent to which persons or
organizations are better off at the end of a
period than they were at the beginning.
43
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Profit Motive (cont.)
• The profit motive – the driving force that
encourages people and organizations to
improve their material well-being – is
largely responsible for the growth of a free
enterprise system based on capitalism.
44
Competition
• Finally, capitalism thrives on competition –
the struggle among sellers to attract
consumers while lowering costs. 
• Because capitalism is based on freedom
and voluntary exchange, buyers compete
to find the best products at the lowest
prices.
45
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The Role of the Entrepreneur
• To take risks in order to produce a profit.
• Entrepreneurs are the ones who start up
new businesses such as restaurants,
automobile repair shops, Internet stores,
and video arcades. 
46
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The Role of the Entrepreneur (cont.)
• In the end, the entrepreneur’s search for
profits can lead to a chain of events that
involves new products, greater
competition, more production, higher
quality, and lower prices for consumers.
47
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The Role of the Consumer
• To demand new and better products and
to support the production of those products
by giving their money to the entrepreneurs
who have taken the risk to create those
products.
48
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The Role of the Consumer (cont.)
• The dollars they spend are the
“votes” used to select the most
popular products.
49
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The Role of Government
• The government has become a protector,
provider of goods and services, consumer,
regulator, and promoter of national goals. 
50
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Protector
• As protector, the government tries to make
sure that everyone follows the “rules of the
game” to ensure an efficient and
fair economy.
51
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Provider and Consumer
• All levels of government provide goods and
services for citizens. 
– The national government, for example, supplies
defense services. 
– State governments provide education and public
welfare. 
– Local governments provide, among other things,
parks, libraries, and bus services. 
52
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Regulator
• In its role as a regulator, the national
government is charged with preserving
competition in the marketplace. 
• It also oversees interstate commerce,
communications, and even entire industries
such as banking and nuclear power. 
• Most businesses do not like to be told how
to run their affairs, and they argue that
consumers can always sue in court if there
are problems.
53
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Promoter of National Goals
• Government is supposed to reflect the will
of a majority of its people. 
– A government program such as Social Security,
as well as laws dealing with child labor and the
minimum wage, reveal how Americans have
modified their free enterprise economy.
54
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Promoter of National Goals (cont.)
• Because of these modifications, and
because there are some elements of
tradition in our economy, the United States
is said to have a mixed economy, or a
modified private enterprise economy. 
• In a mixed economy people carry on their
economic affairs freely, but are subject to
some government intervention and
regulation. 
55
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Section Assessment
Main Idea Using your notes from the
graphic organizer activity on page 46
of your textbook, explain how the basic
economic decisions are made under
capitalism.
They are made through free
interaction of individuals looking out
for their own best interests.
56
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Section Assessment (cont.)
List the five major characteristics of a
free enterprise system.
The five major characteristics are
economic freedom, voluntary
exchange, private property, profit
motive, and competition.
57
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Section Assessment (cont.)
Describe the role of the entrepreneur.
The entrepreneur organizes and
manages land, capital, labor and
starts up businesses.
58
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Section Assessment (cont.)
Explain the importance of the
consumer in a free enterprise system.
They determine what is, and what is
not, produced when they express
their wants in the form of purchases
in the marketplace.
59
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Section Assessment (cont.)
Identify the role of the government in
a free enterprise economy.
The government acts as a protector,
provider and consumer, regulator,
and promoter of national goods.
60
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Section Assessment (cont.)
Voluntary Exchange Cite at least
three examples of voluntary
exchanges that you made this week.
How are you better off by having made
the exchanges? Did the person with
whom you exchanged gain too? How?
Answers will vary.
61
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Section Assessment (cont.)
Understanding Cause and Effect
Americans have varying economic
goals. How have these oftencompeting goals modified our free
enterprise economy?
They have modified our economy
through increased government
intervention in the economy in the
form of programs like Social Security
and laws dealing with minimum wage
and child labor.
62
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Section Close
In small groups, make brief
presentations on the lesson plans
you have developed for the Extra
Credit Project on page 32 of your
textbook. Then discuss what makes
the free enterprise system unique.
63
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Section 1: Economic Systems
• Every society has an economy or economic
system, a way of allocating goods and services to
satisfy the WHAT, HOW, and FOR WHOM
questions. 
• In a traditional economy, the major economic
decisions are made according to custom and
habit. Life in these economies tends to be stable,
predictable, and continuous. 
• In a command economy, government makes the
major economic decisions. Command economies
can change direction drastically in a short time,
focusing on whatever the government chooses to
promote.
65
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Section 1: Economic Systems (cont.)
• Command economies tend to have little economic
freedom, few consumer goods, and little
uncertainty. 
• A market economy features decentralized
decision making with people and firms operating
in their own self-interests. 
• A market economy adjusts gradually to change,
has a high degree of individual freedom and little
government interference, is highly decentralized,
and offers a wide variety of goods and services
that help to satisfy consumers’ wants and needs.
66
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Section 2: Evaluating Economic
Performance
• The social and economic goals of U.S. society
include economic freedom, economic
efficiency, economic equity, economic security,
full employment, price stability, and economic
growth. 
• When goals conflict, society evaluates the costs
and benefits of each in order to promote one goal
over another; many election issues reflect these
conflicts and choices. 
• People’s goals are likely to change in the future,
as our economy evolves.
67
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Section 3: Capitalism and Economic
Freedom
• Capitalism is a competitive economic system in
which private citizens own the factors of
production. 
• The five characteristics of capitalism are
economic freedom, voluntary exchange,
private property rights, profit motive, and
competition. 
• The entrepreneur is the individual who organizes
land, capital, and labor for production in hopes of
earning a profit: the profit motive is the driving
force in capitalism.
68
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Section 3: Capitalism and Economic
Freedom (cont.)
• In capitalism, firms are in business to make a
profit. To do this they must offer products
consumers want at competitive prices. 
• Consumer sovereignty states that the consumer
is the one who decides WHAT goods and services
to produce. 
• The national government plays the role of
protector, provider and consumer, regulator, and
promoter of economic goals.
69
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Section 3: Capitalism and Economic
Freedom (cont.)
• The United States has a mixed economy, or a
modified private enterprise economy, in which
its citizens carry on their economic affairs freely
but are subject to some government intervention
and regulation.
70
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Identifying Key Terms
Match the letter of the term best described by each statement.
C
___
the idea that people rule the market
D a society’s organized way of providing for its
___
people’s wants and needs
H the driving force that encourages people and
___
organizations to try to improve their material wellbeing
A.
B.
C.
D.
E.
72
capitalism
command economy
consumer sovereignty
economic system
fixed income
F.
G.
H.
I.
J.
inflation
private property rights
profit motive
traditional economy
voluntary exchange
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answer. The Chapter Assessment is on pages 54–55.
Identifying Key Terms (cont.)
Match the letter of the term best described by each statement.
F a rise in the general level of prices
___
___
A a system in which the factors of production are
owned by private citizens
___ the right and privilege to control one’s own
G possessions
A.
B.
C.
D.
E.
73
capitalism
command economy
consumer sovereignty
economic system
fixed income
F.
G.
H.
I.
J.
inflation
private property rights
profit motive
traditional economy
voluntary exchange
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to display the answer.
Identifying Key Terms (cont.)
Match the letter of the term best described by each statement.
I
___
an economic system in which ritual, habit, and
custom dictate most economic and social behavior
B an economic system in which a central authority
___
makes economic decisions
A.
B.
C.
D.
E.
74
capitalism
command economy
consumer sovereignty
economic system
fixed income
F.
G.
H.
I.
J.
inflation
private property rights
profit motive
traditional economy
voluntary exchange
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to display the answer.
Identifying Key Terms (cont.)
Match the letter of the term best described by each statement.
E the situation in which the money an individual
___
receives does not increase even though prices go
up
J the act of buyers and sellers freely conducting
___
business in a market
A.
B.
C.
D.
E.
75
capitalism
command economy
consumer sovereignty
economic system
fixed income
F.
G.
H.
I.
J.
inflation
private property rights
profit motive
traditional economy
voluntary exchange
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Reviewing the Facts
Describe the main strength and
weakness of a traditional economy.
strength: everyone knows which role
to play; weakness: discourages new
ideas and new ways
76
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Reviewing the Facts (cont.)
List the five major weaknesses of
the command economy.
does not meet needs and wants of
consumers; lacks effective incentives
for people to work hard; requires large
bureaucracy that consumes
resources; has little flexibility; new
ideas and individuality discouraged
77
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Reviewing the Facts (cont.)
Describe how a market economy, a
traditional economy, and a command
economy adapt to change.
Traditional: often punishes those who
attempt to change the way things are
done; Command: problems adjusting
to changes because of inflexibility;
Market: flexible and can adjust to
change
78
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Reviewing the Facts (cont.)
Describe the seven major economic goals
which most Americans agree on.
economic freedom–freedom to make one’s
own economic decisions; economic
efficiency–recognition that resources are
scarce and need to be used wisely; economic
equity–belief that the economy should be
managed justly, impartially, and fairly;
economic security–protection from effects of
adverse economic events; full employment–
desire for the economic system to provide as
many jobs as possible; price stability–desire
for stable prices; economic growth–production
of more and better goods and services
79
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Reviewing the Facts (cont.)
Explain how society resolves the
conflict among goals which conflict.
economic system is flexible, allows
choices, and accommodates
compromises
80
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Reviewing the Facts (cont.)
State how people and businesses
benefit from economic freedom.
People can choose their employer,
where and when they work, and how
they spend their money. Businesses
hire the best workers, and decide
what and how to produce and what
prices to charge.
81
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Reviewing the Facts (cont.)
Explain the importance of the
entrepreneur in a free enterprise
economy.
When entrepreneurs succeed, they
benefit by gaining profits; workers
benefit through jobs and higher
wages; consumers benefit by having
more and better products to buy; and
government benefits through greater
tax revenues.
82
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Reviewing the Facts (cont.)
Provide examples of how the
government acts as protector,
provider and consumer of goods and
services, regulator, and promoter of
national goals.
protector–enforces laws against false
advertising; provider and consumer–
provides highways, uses productive
resources; regulator–oversees
interstate commerce; promoter of
goals–minimum wage promotes equity
83
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Thinking Critically
Drawing Conclusions Some people
believe the profit motive conflicts with
the goals of economic security and
equity. Do you agree or disagree? Why
or why not?
Some might argue that the profit motive
does conflict with those goals, pointing
out that business owners, in their drive
for profits, may be less than fair. Others
may argue that there is no conflict,
because the drive for profits eventually
leads to economic success for all.
84
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Thinking Critically (cont.)
Understanding Cause and
Effect How can the movement of
people and the communication of
ideas affect the type of economic
system a society has?
Freedom of movement of people and
ideas is the hallmark of a market
economy. Lack of movement is a
tendency of traditional and command
economies.
85
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to display the answer.
Thinking Critically (cont.)
Making Inferences What incentive
does owning private property give
people?
Private property gives people the
incentive to work harder, to save, to
invest, and to succeed.
86
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to display the answer.
Thinking Critically (cont.)
Making Comparisons Reproduce
the diagram on page 55 of your
textbook. Then, in the spaces
indicated, identify several
elements of command and
tradition in the U.S. economy that
make it a mixed, or modified
private enterprise, economy.
Answers will vary.
87
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to display the answer.
Applying Economic Skills
Tradition Most people tip for service
in restaurants, but not for service at
clothing stores or gas stations.
Explain how this illustrates
economic behavior by tradition
rather than by market or command.
Tipping for service in a restaurant is a
long-established tradition, just as
tipping at clothing stores and gas
stations is rarely done.
88
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to display the answer.
Applying Economic Skills (cont.)
Freedom and Equity Explain the
role you as a consumer must play
in obtaining economic equity for
yourself.
reporting unfair pricing or false
advertising
89
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to display the answer.
Applying Economic Skills (cont.)
Voluntary Exchange How does the
principle of voluntary exchange
operate in a market economy?
Both buyers and sellers must believe
that something they want has more
value than the money or products
they want to give up.
90
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to display the answer.
Identify the type of economy in the
following situations: (1) After hearing
complaints about postal service, Jack
starts a delivery service. (2) Production
has remained the same for generations.
(3) A proposal to introduce new
production methods is held up for
months while paperwork is prepared.
market; traditional; command
91
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to display the answer.
Click the mouse button to return to the Contents slide.
Continued on next slide.
Continued on next slide.
Continued on next slide.
In groups of three or four, develop a lesson plan
and teaching materials for a 30-minute class,
suitable for junior high students, titled “Free
Enterprise–The American Economic System.”
Explore online information about the
topics introduced in this chapter.
Click on the Connect button to launch your browser and go to the
Economics: Principles and Practices Web site. At this site, you
will find interactive activities, current events information, and Web
sites correlated with the chapters and units in the textbook.
When you finish exploring, exit the browser program to return to
this presentation. If you experience difficulty connecting to the
Web site, manually launch your Web browser and go to
http://epp.glencoe.com
Explore online information about the
topics introduced in this chapter.
Click on the Connect button to launch your browser and go to the
BusinessWeek Web site. At this site, you will find up-to-date
information dealing with all aspects of economics. When you
finish exploring, exit the browser program to return to this
presentation. If you experience difficulty connecting to the Web
site, manually launch your Web browser and go to
http://www.businessweek.com
Economic Indicators Economic indicators are
economic statistics reflecting the general direction of the
economy. Some indicators are termed leading indicators
because they tend to lead or forecast the direction of the
economy or business cycle; the stock market is known
as a leading indicator. Another important indicator is the
U.S. Department of Labor’s quarterly Employment Cost
Index, which measures the rate of change in employee
compensation. Like the average hourly earnings data, it
allows economists to keep a beat on wage inflation,
which is often seen as a catalyst to overall inflation.
Teaching Capitalism in Russia
Gang of Four
Click on a hyperlink to choose that topic.
Teaching Capitalism in Russia Switching to a market
economy has not been easy for Russia and other
Eastern European nations. In Russia, for example, real
money plays a small role in the current economy. The
Russian currency, the ruble, is used to buy basic
necessities such as food. IOUs, barter, and alternate
currencies are used in most dealings involving
companies. Some companies, such as the
Magnitogorsk Metal Works, issue their employees
cards, rather than currency, that can be used in
company-owned shops and the city department stores.
Gang of Four South Korea, Taiwan, Singapore, and
Hong Kong are collectively known as the “gang of four“
because they have successfully instituted market
economies. The economy of South Korea has been
bolstered by the production of automobiles and
computers. Taiwan‘s economy depends heavily on the
manufacturing of textiles, cement, plastics, electronic
appliances, and other goods. Singapore’s economy
encompasses international banking, finance,
communications, high-technology manufacturing, and
tourism. Hong Kong’s economy relies heavily on the
exportation of the textiles, clothing, electronic appliances
and equipment, plastic products, and watches and clocks
that it produces.
The word market derives from the Latin word
mercari, which means “to trade.“ Its first use
in its present meaning–the place where
trading goes on–probably appeared in the
twelfth century.
Walt Disney won more Oscars than anyone
ever has–twenty “Oscar” statuettes and a
dozen more special plaques and certificates.
Toys Online Consumer approval of online
shopping has grown tremendously. At the start
of the 1999 Christmas shopping season, online
toy stores such as KBkids.com, Toysrus.com,
and eToys.com logged nearly twice the number
of visitors compared with a year earlier. Traffic
to the toy sites rose 99 percent overall as
consumers became more comfortable using the
Internet and making online purchases.
The Internet and the
Right of Privacy
The Internet provides millions with quick access
to information. There are trade-offs, however.
One is privacy. Powerful database technologies
have made it possible to quickly gather personal
information on millions of Americans who cruise
the Web.
Read the BusinessWeek Newsclip article on
page 45 of your textbook. Learn more about
privacy on the Internet.
Continued on next slide.
This feature is found on page 45 of your textbook. Click
the Speaker button to listen to an audio introduction.
The Internet and the
Right of Privacy
Analyzing Information What issue is
the article addressing?
a person’s right to privacy on the Internet
and how that right is being exploited
Continued on next slide.
Click the mouse button or press the Space Bar to display the
answer. This feature is found on page 45 of your textbook.
The Internet and the
Right of Privacy
Drawing Conclusions What solution to
protecting the right of privacy does the
article present? In your opinion is this a
good solution, or should others be
suggested?
The article suggests that companies should
be required to request permission to use
personal information and that they offer
something in exchange for that information.
Click the mouse button or press the Space Bar to display the
answer. This feature is found on page 45 of your textbook.
Economics and You
Video 3: Economic Systems
and the American Economy
After viewing Economic Systems and the
American Economy, you should be able to: 
• Explain how a free enterprise system works. 
• Describe the role of government in the
American economy. 
• Understand how the minimum wage affects
the economy in general.
Continued on next slide.
Click the mouse button or press the Space Bar
to display the information.
Economics and You
Video 3: Economic Systems
and the American Economy
Side 1
Disc 1
Chapter 3
Click the Videodisc button
anytime throughout this
section to play the complete
video if you have a videodisc
player attached to your
computer.
Click inside this box to play the preview.
Click the Forward button to
view the discussion questions
and other related slides.
Continued on next slide.
Economics and You
Video 3: Economic Systems
and the American Economy
What are some examples of
government’s role in the American
economy?
Possible answers: requiring
businesses to pay workers a
minimum wage; requiring
businesses to meet
environmental standards
Click the mouse button or press the Space Bar to display the
answer.
Side 1
Disc 1
Chapter 3
Making Comparisons
When you make comparisons, you determine
similarities and differences among ideas,
objects, or events. Making comparisons is an
important skill because it helps you choose
among alternatives.
Continued on next slide.
This feature is found on page 40 of your textbook.
Making Comparisons
Learning the Skill
• Identify or decide what will be compared. 
• Determine the common area or areas in which
comparisons can be drawn. 
• Look for similarities and differences within these
areas.
Continued on next slide.
Click the mouse button or press the Space Bar to display the
information. This feature is found on page 40 of your textbook.
Making Comparisons
Practicing the Skill
• Read the passages on page 40 of your textbook, then
answer the questions on the following slides.
Continued on next slide.
This feature is found on page 40 of your textbook.
Making Comparisons
What is the topic of these passages?
the Russian economy
Continued on next slide.
Click the mouse button or press the Space Bar to display the
answer. This feature is found on page 40 of your textbook.
Making Comparisons
How are the passages similar?
Different?
While both passages examine the
Russian economy, Viewpoint A discusses
the products now available to the Russian
people, and Viewpoint B examines the
economy in a global context.
Continued on next slide.
Click the mouse button or press the Space Bar to display the
answer. This feature is found on page 40 of your textbook.
Making Comparisons
What conclusions can you draw
about the opinions of the writers?
The writer of the first passage holds a
more optimistic view of the Russian
economy and what it offers the Russian
people. The writer of the second passage
voices concerns about Russia’s progress
toward capitalism.
Click the mouse button or press the Space Bar to display the
answer. This feature is found on page 40 of your textbook.
Click a picture
to learn more
about George
Lucas or Walt
Disney. Be
prepared to
answer the
questions that
appear on the
next two slides.
George Lucas
1944–
This feature is found on page 52 of your textbook.
Walt Disney
1901–1966
Continued on next slide.
Making Comparisons What similarities
are there in the early lives of Lucas and
Disney?
Neither Lucas nor Disney achieved early
success in their careers.
Continued on next slide.
Click the mouse button or press the Space Bar to display the
answer. This feature is found on page 52 of your textbook.
Evaluating Information Both Lucas and
Disney have influenced millions of
people through their films. Do you view
this as something positive or something
negative? Explain your answer.
Answers will vary.
Click the mouse button or press the Space Bar to display the
answer. This feature is found on page 52 of your textbook.
End of Custom Shows
WARNING! Do Not Remove
This slide is intentionally blank and is set to auto-advance to end custom
shows and return to the main presentation.
Click the mouse button to return to the Contents slide.