The name Disney is known around the world. Yet as a young man, Walt Disney was a failed filmmaker operating out of a makeshift studio in a garage in Los Angeles. Disney had moved there from Kansas City, where he had helped create cartoon advertisements for showings in movie theaters. Dreaming of making full-scale movies, he headed to Los Angeles— then, as now, the film industry capital—to pursue his dream. For five years, he struggled to make ends meet. Then he released an animated film featuring a character that would soon become a household name: Mickey Mouse.
The year was 1928, and the film industry was about to explode: the ability to add sound to movies had just been developed; color movies would emerge in just a few years.
Disney and his workers made full use of ... new technologies.
Today, Walt Disney Company is a business giant. With income from four motion-picture units (Walt Disney Pictures, Touchstone Pictures, Hollywood Pictures, and Miramax Films), television (Disney owns ABC), videocassettes, recordings, theme parks, resorts, publications, and merchandise based on Disney characters, "Disney" is practically an industry unto itself. This huge media presence has brought Disney characters to millions of people around the world. Walt Disney combined economic success with a cultural impact that few, if any, others have achieved.
Examining the Profiles
1. Making Comparisons What similarities are there in the early lives of Lucas and Disney?
2. Evaluating Information Both Lucas and Disney have influenced millions of people through their films. Do you view this as something positive or something negative? Explain your answer.
Chapter 2 Summary
Economic Systems (pages 33-39)
• Every society has an economy or economic system, a way of allocating goods and services to satisfy the WHAT, HOW, and FOR WHOM questions.
• In a traditional economy, the major economic decisions are made according to custom and habit. Life in these economies tends to be stable, predictable, and continuous.
• In a command economy, government makes the major economic decisions. Command economies can change direction drastically in a short time, focusing on whatever the government chooses to promote.
• Command economies tend to have little economic freedom, few consumer goods, and little uncertainty.
• A market economy features decentralized decision making with people and firms operating in their own self-interests.
• A market economy adjusts gradually to change, has a high degree of individual freedom and little government interference, is highly decentralized, and offers a wide variety of goods and services that help to satisfy consumers' wants and needs.
Evaluating Economic Performance
The social and economic goals of U.S. society include economic freedom, economic efficiency, economic equity, economic security, full employment, price stability, and economic growth.
When goals conflict, society evaluates the costs and benefits of each in order to promote one goal over another; many election issues reflect these conflicts and choices.
People's goals are likely to change in the future, as our economy evolves.
Capitalism and Economic Freedom (pages 46-51)
• Capitalism is a competitive economic system in which private citizens own the factors of production.
• The five characteristics of capitalism are economic freedom, voluntary exchange, private property rights, profit motive, and competition.
• The entrepreneur is the individual who organizes land, capital, and labor for production in hopes of earning a profit: the profit motive is the driving force in capitalism.
• In capitalism, firms are in business to make a profit. To do this they must offer products consumers want at competitive prices.
• Consumer sovereignty states that the consumer is the one who decides WHAT goods and services to produce.
• The national government plays the role of protector, provider and consumer, regulator, and promoter of economic goals.
• The United States has a mixed economy, or a modified private enterprise economy, in which its citizens carry on their economic affairs freely but are subject to some government intervention and regulation.
CHAPTER 2: ECONOMIC^YSTEMS AND DECISION MAKING 53
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