To sell state-run firms to individuals is to privatize. To privatize means to transfer from public or government control or ownership to private enterprise. When an individual owns a firm, for instance, it is said to be private.
What is a market based economic system with limited government involvement?
Economics MP1 Test Vocab Review
| A | B |
|---|---|
| Mixed Economy | Market based economic system with limited government involvement. |
| Market | An arrangement that allows buyers and sellers to exchange things. |
| Specialization | The concentration of the productive efforts of individuals and firms on a limited number of activities. |
Where households purchase goods and services from firms?
Product market: The market in which households purchase the goods and services that firms produce.
What is it called when you purchase the goods and services that firms produce?
The arena in which households buy the goods and services that firms produce is called the product market.
What provides the goods and services that are bought/sold and used?
A market is the free exchange of goods and services. The market provides the only form of control over what goods and services are bought and sold.
Which best describes how individuals help the economy grow?
Answer: Individuals help the economy grow by working in their own self-interest. Adam Smith, the father of economics, was the first to explain this concept of self-interest and how it benefits the economy.
What are the three factors of the free market economy?
In a free market system, individuals and privately owned businesses own the factors of production, make what they want, and buy what they want. In other words, individuals answer the three key economic questions of what to produce, how to produce it and who consumes that which is produced.
