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Benefits of Free Enterprise
Transcript of Benefits of Free Enterprise
Basic Principles of Free Enterprise
Role of the Consumer
• The fundamental purpose for a free enterprise system is to give consumers the right to make their own economic choices.
Questions for the Class??
Federal and state agencies regulate industries whose goods and services affect the well being of the public. The government imposes various restrictions.
Businesses must follow certain environmental protection rules and are subject to local zoning laws. Zoning laws
may forbid homeowners from running businesses out of their homes.
The government key part is consumer protection.
Example would be setting manufacturing standards, and supervising the sanitary conditions in which the foods are produced.
However, government regulation can have negative effects on both businesses and consumers.
Government protection of the consumers with agencies and regulations were too costly for businesses
during the 1960s and 1970s. Businesses pointed out that the rules were cutting into profits, slowing growth, and forcing them to charge unnecessarily high prices.
Growth in government oversight of industry also raised government spending.
Benefits of Free Enterprise
Role of the Government
Americans expect the government to protect property rights, contracts, and other business activities in our free enterprise system. The government can protect these rights by having educated consumers who are aware of the kind of products they are buying to make informed choices. Consumers use governments information to protect themselves from dangerous products and fraudulent. Public Disclosure laws are placed to require companies to give consumers important information about their products.
A Tradition of Free Enterprise
In America, many businesses emerge from entrepreneurs or groups of people who are looking for a way to improve their economic status and success.
Some of these people include immigrants who perceive America as the "land of opportunity" or a place that their assiduousness will pay off.
Economics/ Period 3
The main reason these immigrants and many other people have been able to start their own businesses and contribute to the economic growth, is because of free enterprise.
Free enterprise is an economic system that gives people the liberty and flexibility they need to start their own businesses and compete in the marketplace.
explains that money is what motivates people and businesses.
Since America is a free enterprise system, business owners and the managers are the ones who deal with the business's activities.
They are the ones in charge of how the business will be formed, operated, and what the business is going to produce and sell.
Also, since they are in charge, they are fully responsible of their economic output and the failure or success of their business.
is the notion that any person can compete in the marketplace.
Each company and person has distinct profits because of their performance in the marketplace.
Depending on how successful a business is, the wealthier or the poorer the owners will be.
in the marketplace.
This means that everyone has the same legal rights to compete in the market, and as a result this maximizes the use of human capital.
People also have
private property rights
, in which people can control whatever they own, like property, as they please.
Everyone has the right of
. This allows them to be able to choose the agreements they want to be part of.
There is the right of
in which people choose what they want to buy and sell and when they want to do so.
With all these rights provided
, or the rivalry between sellers to appeal to consumers while lowering the price of their products, becomes harder.
What type of economy does America have?
What are some ways the government protects the well being of the public?
What is one way that the government can take your property and what must they do to compensate you?
What happens when one of the individuals of the binding contracts doesn’t keep their promise?
What Is This??
America has many businesses that emerged from people who wanted a better life style. The reason these people were able to start their businesses was because of the free enterprise economic system America has. This economic system gave people the chance to start their own businesses and compete in the marketplace. Some characteristics that define a free enterprise is profit motive, open opportunity, and the economic rights provided to people who want to start businesses.
In a free enterprise system, the consumers have the right to make their own economic decisions. They are able to purchase products or services from producers, and when they do this the producers get an idea of how much and what to make. Consumers also join interest groups in order to make their wishes known.If consumers did not demand goods or services, many individuals would be out of work. The government is expected by the public to protect property rights, contracts and other business activities in the free enterprise market. The government protects these rights by having educated consumers, placing public disclosure, restrictions and zoning laws on businesses. However, the governments regulation can have negative effect on businesses and consumers since they government protection can be costly.
• The Bill of Rights to the United States Constitution guarantees certain individual freedoms, such as freedom of speech and religion. The Constitution also guarantees important rights that allow people to engage in business activities.
• In the modern times, the king or other rulers had the power to take people’s property for their own use.
• Early American statesmen wanted to protect themselves against this, so they included property as a protected right under the Fifth Amendment, which states that: “Be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.”
• The Fifth Amendment applies only to the actions by the federal government, the fourteenth Amendment ratified in 1868 includes a due process clause extending the same limitation to the state governments.
• The due process clauses prevents the government from taking away property form an individual except for when there is public reason and the government must pay the person the fair value of the property that’s been taken.
• Congress can only tax in the ways the constitution allows. Article 1 gives Congress the power to levy taxes, but Sections 2 and 9 require direct taxes to be apportioned according to population so that everyone will pay the same amount.
• The Sixteenth Amendment ratified in 1913, first gave Congress the clear right to set taxes based on income.
• Finally, the Constitution guarantees people and businesses the right to make binding contracts.
• Article 1 section 10 prohibits the states from passing any “Law impairing the Obligation of Contracts.” Meaning that Individuals or businesses cannot use the political process to get excused from their contracts.
• A consumer is an individual who purchases products or services from the producer.
• Consumers need to buy products from producers in order to maintain a well-balanced market industry.
• Consumers may also join an interest group in order to make their wishes known.
• “An interest group is a private organization that tries to persuade public officials to act or vote according to group members’ interest”.
• If consumers did not demand goods or services, many individuals would be out of work.