Social Studies - 2019-20

CE.12a - Characteristics of the United States Economy

The student will apply social science skills to understand the United States economy by

a) describing the characteristics of the United States economy, including limited government, private property, profit, markets, consumer sovereignty, and competition;


Adopted: 2015

BIG IDEAS

UNDERSTANDING THE STANDARD

The United States economy is primarily a free market economy but is characterized as a mixed economy.

ESSENTIALS

The United States economy has characteristics of a free market economy, but because it has some aspects of command and traditional economies it is characterized as a mixed economy.


Government intervenes in a market economy when the perceived benefits of a government policy outweigh the anticipated costs.


Characteristics of the United States economy

 A market exists whenever buyers and sellers exchange goods and services.

 Free enterprise: Markets are generally allowed to operate without undue interference from the government. Prices are determined by supply and demand as buyers and sellers interact in the marketplace.

 Private property: Individuals and businesses have the right to own real and personal property as well as the means of production without undue interference from the government. The government provides a structure to define and enforce such property rights.

 Profit motive: Profit consists of earnings after all expenses have been paid. Individuals have the opportunity to create a business and earn profits.

 Competition: Rivalry between producers and/or between sellers of a good or service usually results in better-quality goods and services at lower prices.

 Consumer sovereignty: Consumers determine through purchases what goods and services will be produced.

 Government involvement in the economy is limited. Most decisions regarding the production of goods and services are made in the private sector.

KEY VOCABULARY

Updated: May 16, 2018