In a country like
the United States, most economic decisions are resolved through the
market, so we begin our systematic study there. Who solves the three
fundamental questions—what, how, and for whom— in a market
economy? You may be surprised to learn that no one individual or
organization or government is responsible for solving the economic
problems in a market economy. Instead, millions of businesses and
consumers engage in voluntary trade, intending to improve their own
economic situations, and their actions are invisibly coordinated by a
system of prices and markets. To see how remarkable this is, consider
the city of New York.
