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8 Cards in this Set

  • Front
  • Back

What is an example of a Market Economy?

Producing items that have a high demand

Market Economy

Decisions regarding investment, production, and distribution are based on market determined supply and demand, and prices of goods and services are determined in a free price system.

What is the driving force of a market economy?

Maximizing profit

What is a normal good?

A product that you buy more of when you receive more money. (higher income)




Example: Festival food

What is an inferior good?

A product that you buy more of when you have less money. (lower income)




Example: Wal-Mart food



What is a substitute?

A product that can replace your product if you price increases, or something else happens

What is a complement?

A product that helps your product flourish, is not a threat to your company.


If this product doesn't do well, it can hurt you though

What is Demand?

What people are willing and able to buy