The U.S. Economy

1
The U.S. Economy

• EQ How does a market economy protect consumers?
• (Turn in Green Book to page 248)

2
Four Types of Economies

• 1. _____________ all economic decisions are
  made by the government.
• 2. _____________ based on the economic
  decisions of the past.
• 3. _____________ some economic decisions are
  made by government and some by individuals.
• 4. _____________ all economic decisions are
  made by individual producers consumers

3
Free Enterprise

• AKA-- ________________
• Called Free Enterprise because each person is
  free to _______________.

4
Key Components of Free Enterprise a Market
Economy

• Define each and give 1 example why it is so
  important
• Private Property
• Voluntary Exchange
• Full Employment
• Productivity/Efficiency
• Division of Labor/Specialization
• Equity/Securities
• Test Practice page 253, 1-3

5
Circular Flow Model of Our Economy
6
Circular Flow Dynamics

• How does the Circular Flow illustrate Economic
  Interdependence?
• What takes place in the Factor Market?
• What takes place in the Product Market?
• Test Practice page 257, 1,2,3

7
Economic Interdependence

• Using the Circular Flow Model, create a scenario
  that could actually happen in real-world and
  specifically show how it would affect each sector
  of our economy.

8
Law of Demand

• When _________ go up, __________ goes down.
• When _________ go down, _________ goes up.
• Demand is the amount of a good/service consumers
  are wanting or needing to buy.

9
Law of Supply

• When _________ go up, __________ goes up.
• When _________ go down, _________ goes down.
• Supply is the amount of a good/service producers
  are willing to produce.

10
Complimentary Goods

• Products that go together.
• Name a complimentary good for each
• Mayonnaise
• Pepsi
• Paper Plates
• Flatscreen Plasma TV

11
Substitute Goods

• Products that are basically the same.
• Name a substitute good for each
• Mayonnaise
• Pepsi
• Paper Plates
• Flatscreen Plasma TV

12
Complimentary vs. Substitute

• Take 2 complimentary goods. What happens to
  demand for one when price for the other goes up?
• Take 2 substitute goods. What happens to demand
  for one when price for other goes down?

13
What Affects Price

• Inflation ____________________
• Deflation ______________________
• List everything you can that would influence the
  price of a new automobile.