Elements of Americas market economy in a global setting Essay

Mankiw (2006) characterize a commercialize economy as an economic schema where the production and distribution of goods and services through complete markets and price systems (p. 7). The amounts of products produced be not pre-determined. At the same time, the amount of goods that will be used is not restricted but bound by market forces. Thus, producers and consumers through the interaction of supply and demand create the market by which products and services are consumed and used.The U.S. is considered as the icon of this market system which is primarily based on Adam Smiths capitalism (Rothbard, 2004). To fully understand the mechanism of a market economy, an understanding of its signalise elements is essential. Some of the key elements that will be discussed through this paper are situation rights, competition, and profit. To facilitate this task, discussions will be based on the place setting of the U. S. market economy. The first element for discussion is property ri ghts.Under the U. S. Constitution, property rights provide the owners of a real, personal or intellectual to exercise ownership, dictation and sovereignty over their proper (pp. 166-170). Thus, owners are able to utilize the property as they want to, use to gain benefit and protect it from harm. They fall in the right to benefit from it or from its use. The only constraint with the practice of these rights is that they should transgress any law or inhibit the rights of others (Mankiw, 2006).Competition is described to be the rivalry of individuals or parties because of common or dependent interest (p. 699). In a free market, Rothbard (2004) suggests that competition is the subject matter by which markets determine which suppliers are outgo to meet demands. Similar to theories on evolution, the process of competition is a means to ensure quality. Thus, competition ensures that consumers are able to get the best product available. However, Rothbard also points out that competitio n is also a means of controlling the market internally or externally (p. 12-113).Profit is considered the supreme goal of any economic enterprise. From an economic perspective, profits can be realized when revenues exceed the total cost of inputs (Mankiw, 2006, pp. 271-272). It is achieved when consumers have the capacity to corrupt a product at more than cost of suppliers production. In a simplistic model, profit is what is gained from using various economic resources. Thus, suppliers will plow to want to produce the product because of the economic incentive of its consumption.