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Lecture Economics (19/e) - Chapter 2: The market system and the circular flow

The main goals of this chapter are to: Differentiate between a command system and a market system; list the main characteristics of the market system; explain how the market system decides what to produce, how to produce it, and who obtains it; discuss how the market system adjusts to change and promotes progress; describe the mechanics of the circular flow model. 02 The Market System and the Circular Flow McGraw­Hill/Irwin Copyright © 2012 by The McGraw­Hill Companies, Inc. All rights reserved.

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02 The Market System and the Circular Flow McGraw­Hill/Irwin Copyright © 2012 by The McGraw­Hill Companies, Inc. All rights reserved. The Market System • Known as capitalism • Characteristics of market systems: Private property Freedom of enterprise and choice Self-Interest Competition Markets and prices • Australia, Switzerland, and the U.K. LO1 2-2 Global Perspective Index of Economic Freedom, Selected Nations LO2 2-3 Technology and Capital Goods • Advanced goods are technology and capital encouraged • Specialization •Division of labor •Geographic specialization LO2 2-4 Active, but Limited Government • Government may be needed to alleviate market failures • Government can increase effectiveness of a market system LO2 2-5 ... - tailieumienphi.vn
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