Ch 2 HW

Ch 2 HW - Stephanie Chin Section 26001 9/19/07 Ch 2...

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Stephanie Chin Section 26001 9/19/07 Ch 2 Homework 1. The market system is based on competition for resources whereas a command system is based on government distribution of resources. Therefore the market system deals with scarcity by allowing individuals to compete for resources whereas the command system deals with scarcity by controlling how resources are distributed so that they can be used evenly. In the command system the government owns and makes decisions about resources and in the market system where there is private property, self-interests guide resources. 2. Self-interest helps society achieve economic goals because our self-interests push us to make our own economic decisions regarding consumption and production. There is a wide variety of desired goods and services because different people want and need different things and therefore entrepreneurs start businesses to meet these wants. Entrepreneurs may be at the helm of society but the entire economy is commanded by the dollar vote, which is basically the consumer wants and needs. A business needs consumers to survive and so ultimately all businesses are under the command of consumers. 3. Private property is crucial to the market system because it creates competition in the economy. With this competition, there must protection for the private property or else big business and even the government could potentially take advantage of new businesses. 4.
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This note was uploaded on 02/21/2008 for the course ECON 203 taught by Professor Al-sabea during the Fall '05 term at USC.

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Ch 2 HW - Stephanie Chin Section 26001 9/19/07 Ch 2...

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