Lileny Garcia Econ 2200 Sec 53 Dr. Peter Kinyua September 4, 2018 Assignment 1 1. The term laissez-faire capitalism is in French for “let it be”. In this case, it means that the government will not interfere with the economy. Proponents of laissez- faire in the welfare system believe that if government did interfere with the economy, they would be corrupted and instead of helping the people, they would only benefit themselves. This helps to prevent unfairness and corruption. 2.
The command system is the opposite of Laissez-faire by the government owning most of the property and resources. What this means, is that this system has what is called a central planning. A central planning determines the production goal made in resources such as distribution, composition and organization. 3. The market system is a mixed economy in which the government is a part of but does not take ownership off. Participants are able to act on their own, buy and sell any product in which benefits themselves. 4. Characteristics of the Market System: • Private Property • Freedom of Enterprise and Choice • Self-Interest • Competition • Markets and Prices • Technology and Capital Goods • Specialization • Use of Money • Active, but Limited, Government 5.
The right of private property gives people the freedom of owning property without the government to get involved. This was designed for property owners, if they die they have the right to decide who keeps their property. 6. Freedom of Enterprise and Freedom of Choice, are the two roles in the economy’s market. It is very important for the competitive market economy because without them there wouldn’t be a market economy. 7. The importance of Self- Interest is as simple as it sounds.
Each economic unit tries to achieve its own goal. 8. Competition is important because it gives the freedom of choice exercised in pursuit of a monetary return. 9. Competition among buyers and sellers diffuses economic power.
10. Competition is the regulatory mechanism of the market system, but those who respond to market signal are rewarded. Those who don’t respond are penalized.