Econ 2200 Sec 53
Dr. Peter Kinyua
September 4, 2018
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
4. Characteristics of the Market System:
• Private Property
• Freedom of Enterprise and Choice
• Markets and Prices
• Technology and Capital Goods
• 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
7. The importance of Self- Interest is as simple as it sounds. Each economic unit tries to achieve its
8. Competition is important because it gives the freedom of choice exercised in pursuit of a
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.