2.9 Flashcards
1
Q
define market economic system
A
a system with prices that are based on the competition between the private sector businesses, markets are not controlled by the government
2
Q
what is the private sector
A
the part of the economy made up of individuals and privately owned businesses that make economic decisions
3
Q
what is a public sector
A
the part of the economy that is under control of the government
3
Q
what are the characteristics of market economy
A
- many buyers and sellers
- buyers seek maximum satisfaction from consuming the goods and services they buy
- sellers want to maximise profit
4
Q
what are the advantages of the market economic system
A
- increased consumer choice
- competition leads to efficiency
- incentives to work
5
Q
what are the disadvantages of the market economic system
A
- some goods will not be provided at all or not in sufficient quantity
- income and wealth inequalities
- environmental issues
- wasteful competition
