Cell Phone Economy Note Sheet The Cell Phone Economy
Market Forces & Government Roles
Student Name
Date
Part 1: Three Ways to Run an Economy
Market Economy
Goods and services are offered by __________________ companies. Because companies __________________ for your business, the result is lots of __________________, __________________ prices, and better services.
Command Economy
The __________________ owns and offers all goods and services and __________________ what they will cost. Consumers have only one choice and one set of prices.
Mixed Economy
A __________________ economy in which the government owns some property, offers some goods/services, and makes __________________ that affect how businesses compete.
Part 2: The Battle for Competition
What is a Monopoly?
When one company controls an __________________ __________________ without any competition.
Anti-Trust Laws
Laws that __________________ monopolies and activity that reduces __________________.
Federal Power & Agencies
Sherman Act (1890):
Prohibits activity "in restraint of _________________________."
Clayton Act (1914):
Power to prevent companies from _________________________ together.
Federal Trade Commission (FTC):
Agency that stops companies from competing _________________________.
Part 3: Cause and Effect
Government Action (Cause) Market Impact (Effect) The government blocks a merger between AT&T and T-Mobile. The government places tariffs on imported phones.
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| The FTC stops "unauthorized charges" on consumer bills. |
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Critical Reflection
Why is government intervention necessary in a market economy? (Consider competition and consumer safety.)
Cell Phone Economy Slides Your Cell Phone &
The Economy
How competition, government, and market forces shape the device in your pocket.
The Market Economy
Private Ownership
Goods and services are offered by private companies, not the government.
The Result
Lower Prices & Better Services
More Consumer Choices
Competition
When companies fight for your business, YOU win.
The Command Economy
The government owns and offers ALL goods and services.
One Choice, One Price:
"There would only be one cell phone provider: the government."
No Competition
Gov't Sets Prices
The Mixed Economy
Market Side
Private Business & Competition
Gov't Side
Rules, Safety, & Services
"A market economy in which the government owns some property and makes rules that affect how businesses compete."
The Monopoly Problem
Monopoly
When one company controls an entire industry without any competition.
No competition = Whatever prices they want.
Anti-Trust Laws
Sherman & Clayton Acts: Tools the government uses to keep markets competitive and fair.
The FTC
Federal Trade Commission: The agency that stops unfair competition and protects consumers.
Cause & Effect
Cause
Gov't blocks merger (AT&T/T-Mobile)
Protects consumer choice & keeps prices lower.
Cause
Gov't places tariffs on foreign phones
People buy domestic; helps U.S. companies compete.
Cause
FTC makes safety rules for tech
Consumers protected from health risks & radiation.
Cell Phone Economy Answer Key Teacher Resource
Answer Key: Cell Phone Economy
Lesson: Markets and Mandates
Unit: Government & the Economy
Part 1: Three Ways to Run an Economy
Market Economy: offered by private companies. Because companies compete for business, the result is lots of choices, lower prices, and better services.
Command Economy: The government owns and offers all goods and services and decides what they will cost.
Mixed Economy: A market economy in which the government owns some property, offers some goods/services, and makes rules that affect how businesses compete.
Part 2: The Battle for Competition
Monopoly Definition
...controls an entire industry without any competition.
Anti-Trust Definition
...laws that prohibit (or block) monopolies and activity that reduces competition.
Sherman Act: restraint of trade.
Clayton Act: prevent companies from merging together.
FTC: stops companies from competing unfairly (or deceiving people).
Part 3: Cause and Effect
Cause Market Impact (Sample Answers) Blocking Mergers Ensures more than one provider exists; keeps prices lower and forces companies to innovate for consumers. Tariffs Encourages citizens to buy local/domestic products; makes foreign items more expensive. FTC Action (Charges) Increases consumer trust; prevents companies from overcharging people unfairly.
Critical Reflection (Sample)
Government intervention is necessary to prevent "monster companies" (monopolies) from destroying competition. Without intervention, prices would skyrocket because consumers would have no other choices. Additionally, the government ensures the market stays fair and safe by researching health risks (like radiation) and preventing deceptive billing practices.
