How Economies Differ (HSC SSCE Economics): Flashcards

Economic decisions made by individuals & businesses in self-interest

Capitalism, free enterprise, laissez-faire

Supply & demand forces interact to set market price & quantity

Consumers determine what is produced through market demand

Production decisions by market forces & government combined

Market for production inputs: resources, labour, capital, enterprise

Pressure on firms to lower prices or improve quality

High-income earners face higher marginal tax rates

Goods benefiting entire community (parks, roads, defence)

Goods not produced enough by private sector (arts, education)