Capitalism

1
Capitalism

• What is Capitalism?

2
Capitalism

• Capitalism is an economic system in which
• The means of production and distribution are
  owned by individuals or businesses
• And
• Development depends on reinvested profits
  resulting from free markets

3
Capitalism or Not?

• Consider the definition of capitalism?
• A brother and sister want to sell soft drinks
  during little league games this summer. They ask
  the league officials for permission. The
  officials tell them they can sell soft drinks,
  but the drinks must be regular and diet soda in
  12 oz. cans, and for no more than a .05 profit
  per can.
• Is this an example of capitalism?

4
Group Answer

• The United States of America is often described
  as a capitalist society.
• Based on the two part ( A B) definition of
  Capitalism, work in your groups to provide and
  example of both part A B of the definition?

5
Comparing Economic Systems

• Traditional Economy
• Market Economy
• Command Economy
• See Worksheet 1 for definitions

6
Question 1

• Market Economy-also known as a capitalist
  economy, consumers influence the market through
  their demand and ability to buy.
• Producers are motivated by profit and therefore
  consumers buying patterns determine what goods
  and services are produced.

7
Question 2

• Former Soviet Union was a Command Economy. The
  government leaders are responsible for making
  economic decisions.
• Tribal or village areas represent Traditional
  economies where gods are produced based on the
  needs of that community.

8
Key Features of Capitalism

• Motivation for profits
• Private Ownership
• Voluntary Exchange
• Free Enterprise

9
Needed Resources for Capitalism

• Natural Resources
• Capital Resources
• Labor Resources
• Entrepreneurial Resources

10
Reading 1

• Identify examples of all four types of resources
  used to create the following products.
• Computer
• Jar of Apple Sauce
• T-shirt
• Airplane

11
Differences in Capitalist Society

• Key difference between businesses in a capitalist
  society is whether they provide goods or
  services.

12
Government Involvement

• The US Economy does have elements of Command
  Economics and Traditional Economics.
• Government plans and budgets spending
• Specific areas of the country resemble a
  Traditional Economy

13
Mixed Economy

• Although the US Economy is best described as a
  Capitalist society, the correct definition of its
  economic system is to call it a Mixed Market
  Economy.