Free Enterprise System

Nick, Trent, Mitchell, and Peyton

Definition

-allows people to own their own buisness instead of the government and the importance of entrepreneurs because they promoted economic growth and freedom.

Profit

The total amount of money made when comparing the cost of making the product and the amount it sells for.

Producers and Consumers

Producers- are the people who make and sell the product

Consumers- the people who buy the product

Law of Supply and Demand

1. If the demand increases and supply is unchanged, a shortage occurs, and the price will be increased

2. If demand decreases and supply is unchanged, a surplus occurs, and the price will decrease

3. If demand is unchanged and supply is increased, a surplus occurs, and the price will decrease

4. If demand is unchanged and supply decreases, a shortage occurs, and the price increases

Adam Smith

Father of economics.

Creator of the idea "laissez-faire" meaning the people should do what they want

Believed in the idea of the "invisible hand" which is the self regulating behavior of the market place. He believed in the competition between companies. He believed that the government shouldn't intervene with businesses.

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