Market Economy

What is a Market Economy
It is where supply and demand are bought and sold, not controlled by the government, and prices are made by the free market

Other Names: Free Market, and Free Enterprise

Advantages:
Businesses either succeed or fail.
The businesses are forced to set a price point in which they can make a profit

Disadvantage:
A. Harms the environment
B. Produces inferior goods
C. The government doesn’t step in
D. Monopolies
E. Crisis is more likely to happen
F. Market Failure
G. Poor work conditions
H. Limited product range
I. Unemployment

What the government provides:
A. Legal and social framework
B. Provides public goods and services
C. Redistribute income
D. Taxing goods when their production generates spillover costs
E. Stabilizes the economy
F. Maintaining competition in the market

What consumers do:
A. Buy the goods and services
B. Gives consumers jobs
C. Self interest motives
D. Try to get the best benefit to budget

Prices being determined:
Depends on the communications between supply and demand and the competition leads to lowering prices on goods and services.

Who uses it:
A. Hong Kong
B. New Zealand
C. Singapore

What Government uses it: Limited Government

What is this