3. Sarah wants to buy a car but only has $3,000 saved. She found a car for $2,850 but it is ugly and she will eventually have to buy new tires in a year for $300.Sarah also
considered buying a newer car that does not have any necessary repairs and looks
much “cooler". However, Sarah would have to take out a loan for $6,000 as the car
is on sale for $9,000. What should she do? Why?

Brian has just finished college. he wants to set up a small business to make and sell fireworks. he registers his company and acquires a license from the government. he finds that most of his competitors are selling fireworks at an extremely low price. he would like to make more money, so he decides to innovate and develop better fireworks. he sells his fireworks at a higher price, and they are a huge hit with the customers. after a few years, he earns enough profit to set up a bigger fireworks factory that complies with the government’s health and safety regulations. he even starts exporting fireworks overseas. which type of economy does this scenario describe?