Global Trend Awareness
Part3: What is the market economy?
The great virtue of a free market system is that it does not care what colour people are; it does not care what their religion is; it only cares whether they can produce something you want to buy. It is the most effective system we have discovered to enable people who hate one another to deal with one another and help one another.
Milton Friedman (1912-2006), a U.S. economist, Nobel laureate, and influential advocate of free-market capitalism and monetarism
Characteristics of a Market Economy
The market economy is a reflection of the collective demands and needs of society, where the invisible hand of supply and demand guides the way toward prosperity and progress.In a market economy, most goods and services are privately owned. Owners can profit by selling or leasing property, products, or services.
Business owners are free to produce, sell and purchase goods and services in a competitive market.
Self-interest is a primary factor behind a successful market economy. A market economy provides opportunity, gives people a chance to work for themselves, and lets them try to earn a living in a way that they want to.
Products/Services and Needs/Wants
Market Supply
the market supply of products and services differ in how they are produced, marketed, and consumed within a market economy.It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.
Adam Smith (1723-1790), known for economics and moral philosophy and author of The Wealth of Nations
Products pertain to tangible, physical goods that are produced, manufactured, and traded in the market. These can include items like smartphones, automobiles, clothing, and household appliances.
Services refer to intangible activities or tasks that are provided to consumers in exchange for payment. Services encompass a wide range of activities, such as healthcare, education, legal services, entertainment, and consulting.
Market Demand
In a market economy, both needs and wants are met through the production and exchange of goods and services, with the allocation of resources driven by consumer preferences and market forces.Capitalism does not permit an even flow of economic resources. With this system, a small privileged few are rich beyond conscience, and almost all others are doomed to be poor at some level. That is the way the system works. And since we know that the system will not change the rules, we are going to have to change the system.
Martin Luther King Jr. (1929-1968), American minister, civil rights leader and advocate for social justice
Market demand needs are the foundation of economic exchange, representing the essential goods and services that sustain human life and well-being, and they form the bedrock upon which market economies are built.
Needs refer to the basic, essential requirements for human survival and well-being, such as food, water, shelter, clothing, and healthcare.
Needs refer to the basic, essential requirements for human survival and well-being, such as food, water, shelter, clothing, and healthcare.
Demand wants are desires and preferences for goods and services that go beyond basic needs.
Demand wants are typically discretionary expenditures that are not necessary for survival but contribute to a higher quality of life or personal satisfaction. These can include things like entertainment, luxury items, travel, hobbies, and other non-essential purchases.
Demand wants are typically discretionary expenditures that are not necessary for survival but contribute to a higher quality of life or personal satisfaction. These can include things like entertainment, luxury items, travel, hobbies, and other non-essential purchases.