Free Enterprise Market Economy vs. Command Economy

Economy Economy is defined as a system by which productive resources are used to provide goods and services that satisfy peoples’ wants. All societies have this culture trait, but not all economies are the same.

Free Enterprise Market Economy In a Free Enterprise Market Economy, citizens control the production and distribution of the goods and services that are provided.

Characteristics of a Free Enterprise Market Economy Entrepreneur-individual/citizen who assumes all the risks in a new business Higher quality of goods driven by competition Entrepreneurs can own private property Great variety of goods allowing for consumer choice Based on Supply and Demand-business supply goods demanded by consumers Economic freedom Typically practiced in countries with a limited government Example is the United States

Command Economy In a Command Economy, there is central or government regulation and control of all production, distribution and sales.

Characteristics of a Command Economy Government ownership and control of industry and distribution Government sets prices for goods produced No consumer choice-must purchase what the government produces Government determines wages or salaries of workers Typical of an unlimited government with an absolute or totalitarian leader. Examples are the former Soviet Union and North Korea

What type of economy do you think is more successful? Why?

Assignment You will create a flip book to explain the characteristics of a Free Enterprise Market Economy and a Command Economy. Include characteristics of each (7 for Market and 5 for Command) and explain what each characteristic means. Create an illustration for each type of economy. Give an example of each type of economy Must be neat and legible Due on Thursday, 1-6-11