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Terms: capitalism, consumer sovereignty, elasticity, factors of production, incentives, invisible hand, producers' sovereignty, productivity, property rights.
- Capitalism: An economic system based on private ownership of resources and markets, driven by profit and competition.
- Consumer sovereignty: The consumer's buying choices determine what goods are produced, directing the market.
- Elasticity: A measure of how much quantity demanded or supplied changes when price or income changes.
- Factors of production: The resources used to create goods: land, labor, capital, and entrepreneurship.
- Incentives: Rewards or penalties that influence people's economic behavior and decision-making.
- Invisible hand: Adam Smith's concept that individuals pursuing self-interest unintentionally benefit society as a whole.
- Producers' sovereignty: A system where producers control what is made and sold, limiting consumer choice.
- Productivity: The amount of output produced per unit of input (e.g., labor hour or machine time).
- Property rights: Legal ownership and control over resources, allowing owners to use or transfer them freely.
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