1. Basic Characteristics of a Market Economy
Private property- individuals and private businesses own most land and capital goods
Free enterprise- with some limitations, individuals and firms are free to act however they wish in the economy

2. Basic Characteristics of a Market Economy
Self interest- the “invisible hand” that guides people to unconsciously do what is best for society
Competition- keeps prices in line with costs of production

3. Basic Characteristics of a Market Economy
System of Markets and Prices- Markets bring together buyers and sellers. The forces of supply and demand determine prices.
Limited government- At a minimum, government is needed to define and enforce property rights, and provide some goods and services that are not provided efficiently by the markets