TJC ECON 2301 FINAL – QUESTIONS 100% SOLVED.

List the main characteristics of the market system - ANSWERprivate property, freedom on enterprise, freedom of choice, self-interest, competition, markets and prices, technology and capital goods, specialization, division of labor, geographic specialization, use of money, active/limited government Why does the supply curve slope upward? - ANSWERIt is due to the value of the product and the profit producers can get from supplying the product Competition is the disciplinarian of the market economy... - ANSWERit makes producers find cost-effective ways of manufacturing; it also keeps them from over-charging What are the five fundamental questions; and how does a market system answer them? - ANSWER1) What will be produced? -- they produce based on consumer demand 2) How will it be produced? -- Low cost of production/goods for more profit 3) Who will pay? -- Consumers interested in the product 4) How will the system accommodate change? -- it stays dynamic/changes as consumer interest does 5) How will the system promote progress? -- technological advance; capital accumulation Do prices tend to become more or less flexible as time passes? - ANSWERThey tend to