1. Three Types of Economies

2. 1. Traditional Economy - economic decisions based traditions/customs - all members work together to support society - societies are small - people own factors of production *Very few traditional economies exist today

3. 2. Command Economy - economic decisions made by government - factors of production owned by government - consumers have little/no power

4. 3. Market Economy - economic decisions made by private individuals - factors of production owned by private individuals - bargaining process - profit -invest *market- a place or situation in which buyers and sellers agree to exchange goods and services

5.  Two other names for a Market Economy… - Free Enterprise- little or no control by government - Capitalism- private individuals decide how to use capital to produce goods/services *The United States is considered a market economy

6.  Mixed Economy - mixture of the three basic systems *Today, most countries have a mixed economy