Entrepreneurs and Their Role

in an Economy
• Provide an example of an entrepreneur.

• What are problems faced by

entrepreneurs?

• How can an entrepreneur increase a

country’s GDP?
 Entrepreneur Cause and Effect
A country’s An GDP goes
If the business
laws make it entrepreneur up.
is successful,
easier for the believes their International
the
entrepreneur to idea for a new trade
entrepreneur
start a product will increases.
will create
business and earn a profit Taxes are
new products
have laws to and want to collected to
and hire new
protect their risk their $ and help the
workers
investments resources to government
(creates new
start a earn money
jobs)
business
 Three Economic Questions

What to produce?

How to produce?

For whom to produce?

How does each of the economic
systems answer the three basic
economic questions?
 TRADITIONAL ECONOMY

Basic
What to How to For whom to
Economic
produce? produce? produce?
Questions

What people need Hunting, farming Make their own

to survive & gathering products

Answer: Whatever was Social roles Whoever usually

produced in the determine who received products
past does what will receive them
again
 COMMAND ECONOMY
Basic
What to How to For whom to
Economic
produce? produce? produce?
Questions

Government does Gov’t controls the

Government the planning for distribution
decides what will production, system for
be produced factory locations housing,
(gov’t owns the transportation,
Answer: means of and sets prices.
production)
Class reward
Gov’t chooses system, waiting in
people’s jobs and line / rations
their salaries
 MARKET ECONOMY

Basic
What to How to For whom to
Economic
produce? produce? produce?
Questions

Whatever Business owners Consumer’s

consumers will choose – own the income
buy means of determines who
production receives which
Answer: Success of a goods and
good or service goal is the most services
determines efficient and
whether it will be profitable Whoever can buy
produced methods it!
 MIXED ECONOMY
(more market than command)
Basic
What to How to For whom to
Economic
produce? produce? produce?
Questions

Business owners/ Business owners/ Consumer’s

leaders decide leaders decide income
what to produce how to produce determines who
based on sales, items, but the receives which
but the government sets goods & services
government minimum safety (whoever can buy
Answer: controls some of requirements, it), but the
decision making minimum wage, government
and age to work provides welfare
for workers. Also benefits for the
set guidelines for needy
products (safety)
 MIXED ECONOMY
(more command than market)
Basic
What to How to For whom to
Economic
produce? produce? produce?
Questions

Government Government Government

decide what to controls most of determines who
produce, but the means of receives which
private ownership production, but goods & services;
Answer: of business is business owners/ a few items
allowed in limited leaders make available outside
amounts limited decision government
on how to control (black
produce items market)