1. Spectrum of Economic System

2. Means of production are privately owned
Means of production are privately owned. Supply and demand determine prices, and businesses are free to direct resources into activities that promise the greatest profits.
Capitalism

3. Capitalism Advantages Efficiency Freedom
Decentralized- consumers and producers work together
High degree of consumer satisfaction
Flexibility to accommodate change
Capitalism

4. Capitalism Disadvantages Does not satisfy everyone’s needs
Ignores public goods
Produces only for demand…so it ignores the poor
Capitalism

5. Government owns and runs some of the basic productive resources in order to distribute output in ways deemed to be in the best interest of society
Most are democracies
Socialism

6. Advantages
Those who are not fortunate or productive enough to earn it through competition still share in the benefits of society.
People use electoral power to influence decisions
Socialism

7. Socialism Disadvantages Less efficient
More workers are hired than needed
Taxes are generally higher
Workers are reluctant to work in these countries
Socialism

8. Political and economic framework where all property is collectively owned, labor is organized for the common advantage of the community, and everyone consumes according to their needs.
So far no one has achieved pure communism
Communism

9. Communism Characteristics Disadvantages
Central planning authority rather than supply and demand
Government controls labor…no choice
Central planning authority makes all decisions and the state owns most of the major factors of production
Individual risk taking is forbidden
State decides what, how and for whom to produce
Communism

10. Communism Disadvantages Individual freedom is lost
Lacks incentives that encourage people to work hard
Fails to meet the needs and wants of consumers
Inefficiency of centralized planning
Inability to change and be flexible
Communism