The Role of markets Flashcards
1
Q
how do markets help solve the economic problem (resources)
A
markets help to allocate scarce resources to satisfy competing wants in economic system.
markets require no resources to function
2
Q
how do markets help solve the economic problem (people)
A
markets coordinate descisions between buyer and seller in a decentralised way
3
Q
why do markets work
A
markets work because they provide incentive for both consumer and producer, they gain by exchange
4
Q
when does a market exist
A
when BUYERS and SELLERS come to EXCHANGE GOODS
5
Q
what is voluntary exchange
A
buyers and sllers are not forced to participate in exchange
