CHAPTER2

Introducing the Market Economy

In This Chapter

  • From feudalism to capitalism
  • Adam Smith and the self-regulating market
  • Opportunity costs: making choices with limited resources
  • The benefits of trade
  • The efficient market

The market system that prevails throughout the world today is a far cry from the environment from which it emerged. We take for granted that there are small businesses and large corporations. People go to work every day to earn a living and, one hopes, to get some satisfaction from their labors. Advanced transportation and communication facilitates trade as businesses interact freely across the globe. They strive to gain ...

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