1.1.6 Flashcards
1
Q
what is a market
A
set of arrangements that allow transactions to take place between buyers and sellers
2
Q
free market
A
market forces are allowed to guide allocations of resources
3
Q
advantages and disadvantages
A
freedom of choice
high motivation - high rewards
political freedom
high levels of inequality
lack of merit goods
monopolies if competition decreases
4
Q
command economy
A
state controls allocation of resources
5
Q
advantages and disadvantages
A
minimum standard of living provided
less wastage of resources
long term planning
slow decision making
bribery or competition
less motivation or efficiency due to same wages
6
Q
mixed economy
A
resources are allocated partially through the state and through price signals
