chapter 2 the united states economy n.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
Chapter 2: The United States Economy PowerPoint Presentation
Download Presentation
Chapter 2: The United States Economy

Loading in 2 Seconds...

play fullscreen
1 / 19

Chapter 2: The United States Economy - PowerPoint PPT Presentation


  • 54 Views
  • Uploaded on

Chapter 2: The United States Economy. FREEDOM OF ENTERPRISE & CHOICE. PRIVATE PROPERTY. ROLE OF SELF-INTEREST. COMPETITION. CAPITALIST IDEOLOGY. FREEDOM OF ENTERPRISE & CHOICE. PRIVATE PROPERTY. ROLE OF SELF-INTEREST. COMPETITION. CAPITALIST IDEOLOGY. LARGE NUMBERS. ENTRY &

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Chapter 2: The United States Economy' - phil


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
slide2

FREEDOM OF

ENTERPRISE

& CHOICE

PRIVATE

PROPERTY

ROLE OF

SELF-INTEREST

COMPETITION

CAPITALIST IDEOLOGY

slide3

FREEDOM OF

ENTERPRISE

& CHOICE

PRIVATE

PROPERTY

ROLE OF

SELF-INTEREST

COMPETITION

CAPITALIST IDEOLOGY

LARGE

NUMBERS

ENTRY &

EXIT

slide4

FREEDOM OF

ENTERPRISE

& CHOICE

PRIVATE

PROPERTY

ROLE OF

SELF-INTEREST

COMPETITION

ACTIVE, BUT

LIMITED,

GOVERNMENT

MARKETS

& PRICES

CAPITALIST IDEOLOGY

slide5
The Importance

of Property Rights

slide6

Private Property Rights

  • Property rights: The right to use, control, and obtain benefits from a good or service.
  • Private property rights involve:
    • the right to exclusive use.
    • legal protection against invaders.
    • the right to transfer to another.
slide7

Private Property and Incentives

  • Private ownership is a key to prosperity because it provides people with a strong incentive to take care of things and develop resources in ways that are highly valued by others.
  • Private owners can gain by using their resources in ways beneficial to others.
  • They have a strong incentive to care for and manage what they own.
  • They have an incentive to conserve for the future (especially if the property’s value is expected to rise).
slide8

Private Property and Incentives

  • Private ownership is a key to prosperity because it provides people with a strong incentive to take care of things and develop resources in ways that are highly valued by others.
  • With private property rights, owners are liable if their property is used in a manner that damages the property of others.
  • Private ownership links responsibility with the right of control.
  • In contrast, commonly owned property will be poorly maintained and over-utilized rather than conserved for the future.
slide9

Private Property and Markets

  • When private property rights are protected and enforced, permission of the owner is required for use of a resource.
    • If you want to use a good or resource, you must either buy or lease it from the owner.
    • Individuals are faced with the cost of using scarce resources.
  • Market prices provide a strong incentive for private owners to consider the desires of others and to use and develop resources that are highly valued by others.
slide10

1. (a) Can private owners do anything they want with the things that they own?

(b) Why is private ownership important?

(c) Do the owners of land and buildings near your campus have an incentive to use those assets to provide things that students value highly? Why or why not?

Questions for Thought:

2. Does a 60 year old tree farmer have an incentive to plant and care for Douglas fir trees that will not reach optimal cutting size for 50 years? Explain.

slide11

Questions for Thought:

3. Selling your organs is a violation of federal law, a felony punishable by up to five years in prison or a $50,000 fine. Because of this, in September 1999 eBay intervened when a person put one of his kidneys up for sale on eBay (the bidding reached $5.7 million before it was pulled). Is the United States a better place to live because such transactions are prohibited? Why or why not?

slide12

1 Hong Kong

4 New Zealand

5 United States

13 Chile

14 Canada

20 Germany

75 Malaysia

93 Brazil

106 Poland

144 Vietnam

151 Iran

152 Cuba

GLOBAL PERSPECTIVE

Index of Economic Freedom, Selected Nations

Rankings among 156 nations, 2000

FREE

MOSTLYFREE

MOSTLYUNFREE

REPRESSED

Source: Heritage Foundation & The Wall Street Journal

slide13

ECONOMIC GOALS

  • Economic Growth
  • Full Employment
  • Economic Efficiency
  • Price-Level Stability
  • Economic Freedom
  • Equitable Distribution
  • Economic Security
  • Balance of Trade

Tradeoffs!

slide14

CIRCULAR FLOW MODEL

RESOURCE

MARKET

BUSINESSES

HOUSEHOLDS

PRODUCT

MARKET

slide15

CIRCULAR FLOW MODEL

RESOURCE

MARKET

RESOURCES

INPUTS

BUSINESSES

HOUSEHOLDS

PRODUCT

MARKET

slide16

CIRCULAR FLOW MODEL

$ COSTS

$ INCOMES

RESOURCE

MARKET

RESOURCES

INPUTS

BUSINESSES

HOUSEHOLDS

GOODS &

SERVICES

GOODS &

SERVICES

PRODUCT

MARKET

slide17

CIRCULAR FLOW MODEL

$ COSTS

$ INCOMES

RESOURCE

MARKET

RESOURCES

INPUTS

BUSINESSES

HOUSEHOLDS

GOODS &

SERVICES

GOODS &

SERVICES

PRODUCT

MARKET

slide18

CIRCULAR FLOW MODEL

$ COSTS

$ INCOMES

RESOURCE

MARKET

RESOURCES

INPUTS

BUSINESSES

HOUSEHOLDS

GOODS &

SERVICES

GOODS &

SERVICES

PRODUCT

MARKET

$ REVENUE

$ CONSUMPTION

slide19

CIRCULAR FLOW MODEL

Chapter

Conclusions

$ COSTS

$ INCOMES

RESOURCE

MARKET

RESOURCES

INPUTS

BUSINESSES

HOUSEHOLDS

GOODS &

SERVICES

GOODS &

SERVICES

PRODUCT

MARKET

$ REVENUE

$ CONSUMPTION