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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 |
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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. |
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What is the driving force of a market economy? |
Maximizing profit |
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What is a normal good? |
A product that you buy more of when you receive more money. (higher income) Example: Festival food |
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What is an inferior good? |
A product that you buy more of when you have less money. (lower income) Example: Wal-Mart food |
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What is a substitute? |
A product that can replace your product if you price increases, or something else happens |
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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 |
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What is Demand? |
What people are willing and able to buy |