Economic Types
Market
Advantage: adjusts easily to change
Command
Advantage: can ensure stability because it does not coincide with buisness cycles
Mixed
Advantage: can focus on social welfare and political freedom, as well as individual liberties
Market
Advantage: capital (money) flows to where it will get the greatest return
Market
Advantage: consumers can buy whatever they like in whatever amount they want
Command
Advantage: distributes wealth among all of society
Market
Advantage: great variety of goods and services
Mixed
Advantage: has advantages from both market and command economies
Market
Advantage: little government intervention
Market
Advantage: prices determined by market forces (supply and demand); competition brings down prices
Command
Advantage: serves people collectively instead of individuals; focus on equality
Command
Also called Communism and/or Socialism
Market
Also called a Capitalist economy
Mixed
Combines elements of pure market and command economies. Government and individuals share the economic decision making process
Market
Competition determines price and increases the quality of products
Command
Consumers have few, if any, choices in the market place
Command
Disadvantage: can often lead to corruption among state planners
Command
Disadvantage: cannot determine societies objective and consumer preferences as well as market can
Command
Disadvantage: cannot easily adjust to change
Market
Disadvantage: does not always provide basic needs of everyone in society, which can lead people to slip into poverty
Mixed
Disadvantage: government intervention can hinder progress
Mixed
Disadvantage: has disadvantages from both market and command economies
Market
Disadvantage: may make it difficult for government to provide adequate social services
Mixed
Disadvantage: may not lead to optimal use of resources
Command
Disadvantage: often there is insufficient resource distribution (shortages and/or surpluses)
Market
Disadvantage: people can make choices which are harmful to themselves and to others
Market
Disadvantage: there are occasionally market failures
Market
Economic decisions are made by individuals competing to earn profits based on supply and demand
Command
Factories are concerned with quotas
Mixed
Government guides and regulates production of goods and services
Mixed
Government serves to protect both producers and consumers from unfair policies and practices
Market
Individual freedom is considered very important; individuals have freedom to make economic decisions
Command
Individuals have little, if any, influence over economic functions
Market
Profit, not quotas, is the motive for increasing work
Market
Resources are owned by individuals
Mixed
Resources are owned by individuals
Command
Resources are owned by the government
Command
The government or other central authority makes all the economic decisions
Command
The government sets the prices of goods and services
Command
There is no competition; the purpose of business is to provide goods and services, not to make a profit