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Flashcards in Markets Deck (7)
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1

Factor market

Buying and selling factors of production from households to firms e.g. Labour, capital

2

Product market

Buying and selling goods and services, consumers are demand and producers are supply, firms to households

3

Who sets prices in market economies?

Consumer sovereignty (consumer is king)

4

For whom (market)

Whoever is willing to pay for the resources

5

How to produce (market)

Efficiently to operate profitably

6

How does a market economy promote efficiency?

The producers incentive for profit makes them minimise costs

7

Invisible hand

Price mechanism; pressure on economy to change to the equilibrium price and quantity