Krueger, Explorations in Economics 1e, Module 5

command economy

An economic system un which central planners make the important decisions about what, how, and for whom to produce.

Economic system

An organizational structure for addressing what, how, and for whom to produce.

Socialism

Economic system under which most resources and businesses are publicly owned and economic decisions are made by groups of workers and consumers.

Free-enterprise system

An economic system based on private (individual or business) ownership of resources and voluntary exchange.

Traditional economy

An economic system in which decisions about resources are made by habit, custom, superstition, or religious tradition.

Market economy

An economic system in which most key economic decisions are made by business owners and consumers.

Capitalism

An economic system in which most resources and businesses are privately owned.

Mixed economy

A market economy with significant government involvement and elements of tradition.

Communism

A political-economic system under which all resources and businesses are publicly owned and economic decisions are made by central authorities.

Rationing

The placement of limits on the amount of goods each person can purchase.

Incentive

The prospect of a reward or punishment that influences a decision or motivates greater effort.