Micro Chap. 2

Arrangements whereby buyers and sellers interact to determine the prices and quantities exchanged of a commodity.

The balancing of supply and demand in a m..arket

Markets in which no firm or consumer is large enough to affect market

with each participant pursuing his or- her own private interest, a market system works to the benefit of all). With each participant pursuing his or her own private interest. A market system works to the benefit of all.

A method of organizing production whereby each group of people oncentrates ist efforts on a particular set of tasks.

Productive inputs that include all durable produced goods that are in tum used in production.

The use of economic resources that produces the maximum level of satisfaction possible with the given inputs and technology.

Involves issues of fairness in the distribution of income.