1. Market Economies Unit 2.3

2. Fundamentals of a Market Economy Private Property Rights Limited Government Involvement – Lassiez-faire capitalism Voluntary Exchange in Markets Competition Consumer Sovereignty – What consumers decide to buy ultimately decides what gets made Specialization

3. Circular Flow of Market Economies Products Markets Factor Markets

4. Impact of Market Economies Advantages – Responsive to consumer needs – Economic freedom – Competition – Faster growth Disadvantages – Inequity of income distribution – Resources used on frivolous items – Externalities – Job insecurity

5. Role of Government in a Free Market System Regulation Public Goods