ECN 204 Lecture 2: Lecture 2.docx
Document Summary
Lecture 2: market system is an economic system in which property resources are privately owned and markets and prices are used to direct and coordinate economic activities, also known as capitalism the opposite of command system. Command system is where everything is owned by the government and economic decisions are made by a central government body. Efficiency the market system promotes efficient use of resources, by using them for the production of goods and services most wanted by society. Incentives the market system encourages skill acquisition, hard work, and innovation leads to greater production and higher incomes, then eventually higher standards of living. Freedom the market system permits/thrives on freedom . Entrepreneurs and workers are free to further their own self- interest, subject to the rewards and penalties imposed by the market system itself: market failure and need for government, private markets will not make available public goods.
