An Overview of the Market System and the Canadian Economy
Suppose that you were assigned to compile a list of all the individual goods and services available at a large shopping mall, including the different brands and variations of each type of product. We think you would agree that this task would be daunting and the list would be long! And, although a single shopping mall contains a remarkable quantity and variety of goods, it is only a miniscule part of the national economy.
The basic institutions require«
for a market economy.
The Four Fundamental Questions any economy faces
How the "invisible hand" helps to close the gap between private and public interests.
The role of government in a market economy.
About the structure of the Canadian economy.
Part One • An Introduction to Economics and the Economy
Who decided that the particular goods and services available at the mall and in the broader economy should be produced? How did the producers determine which technology and types of resources to use in producing these particular goods? Who will obtain these products? What accounts for the new and improved products among these goods?
In Chapter we saw how equilibrium prices and quantities are established in individual product and resource markets. We now widen our focus to take in all product markets and resource markets—ca italism, also called the rivate enter rise system or simply the market system. In this chapter we examine the characteristics of the market system and how it answers questions such as those posed above.
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