Upton - Chapter 2 section 2 The Free Market
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What are the characteristics of a free market?
* Product Market * Money Flow * Physical Flow * Firms supply household with good and services * Households supply firms with land, labor and capital. * Factor Market
Free Market Economy
Economic system whose advantages include economic sufficiency, freedom, and growth.
Incentive
Expectation that encourages people to behave in a certain way.
Competition
Struggle among producers for the dollars of consumers
Specialization
Concentration of productive efforts of individuals and firms on a limited number of activities.
Consumer Sovereignty
Power of consumers to decide what gets produced.
