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Jim values his car at $2,000, and Kelly values it at $5,000. Can value be created in this situation? How? Suppose Jim refuses to sell for less than $6,000. Is value destroyed? Why or why not?
Market Economy
An economic system in which production and prices are determined by unrestricted competition between privately owned businesses, without substantial government intervention in the form of price controls.
Economic Efficiency
A situation where all resources are optimally allocated to serve each individual or entity in the best way while minimizing waste and inefficiency.
Private-Sector Risk
The risk associated with the non-governmental sector, encompassing uncertainties in business environments, market dynamics, and financial operations.
Invisible Hand
A term coined by Adam Smith to describe the self-regulating behavior of the marketplace where individuals pursuing their own interest often benefit society as a whole.
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