Scarce resources provided by nature that societies choose to use include oil, land, water, and time. These elements are important to the economy because oil, land, and water provide money for the market. The more they are used, the more scarce they become, the higher the demand for them, the higher the prices go. Time plays an important role in this cycle because there is not a lot of time before resources run out. Time is important because people need to use it in the best way that they can. For example, if a machine makes one thousand products in one day, and there is an order for one thousand and two hundred, what does the owner of the company do? He can either stay late to make the extra two hundred, but he would have to pay the workers overtime which is time and a half and that would cost him money. His other option would be to wait until the next day, but then he might loose business because the order was for one thousand and two hundred

Macroeconomics deals with the big picture-with the macroaggregates of income, employment, and price levels. Although microeconomics still deals with important details because the big picture is made up of its parts. Billions of dollars would be meaningless if they did not correspond to the thousand and one useful goods and services that people really need and want.

Markets are the means by which buyers and sellers carry out exchange at mutually agreeable terms. Markets may be physical places, such as the supermarket, department store, and shopping mall, or markets may consist of the arrangements by which buyers and sellers communicate their intentions, such as letters, phone calls, classified ads, and radio and television ads. These market mechanisms provide information about the quantity, quality, and price of products offered for sale. A market exists whenever and wherever there is a mechanism for buyers and sellers to meet and do business. It is in the marketplace that individuals and corporations, acting in their own best interests, will determine what to produce, how much to produce, and for whom to produce. When consumers decide to buy a particular product, they are "voting" for that product in dollars. When the dollars are counted, producers will know what consumers want and that is what they will produce.

The laws of supply and demand also apply to the market economy. People demand goods and services, businesses supply goods and services, and the balance of supply and demand determines the prices of goods and services. The law of supply states that business will provide more products when they can sell them at higher prices and fewer products when they must sell them at lower prices. The law of demand states that buyers will demand more products when they can buy them at lower prices and fewer prices when they must buy them at higher prices.

A mixed economy is an economic system in which characteristics of both capitalism and socialism can be found. In a mixed economic system, both public and private institutions exercise a degree of economic control. In most free world industrial economies, a mixture of governmental industries and private industries exist in varying degrees. Even in the U.S., where free enterprise dominates the economic system, many forms of government enterprise and direct control can be found. The Post Office and the Tennessee Valley Authority are both operated by the federal government, and public transportation facilities are owned and operated by state and local governments. Federal, state, and local regulatory agencies exercise direct control over the operation of much of private enterprise, substantially restricting its freedom of action. Mixed economy is defined as the economic system that operates partly under free market principles, in which business ownership is in private hands and prices are set by supply and demand, and partly under government ownership or control. A mixed economy combines elements of free and command economies.

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Approximate Word count = 2850
Approximate Pages = 11 (250 words per page double spaced)