3. Traditional Economies Found in rural, developing nations Customs govern the economic decisions Technology is not readily available Farming, hunting, and gathering are the main activities Life is similar to what has happened for generations Economic activities centered on survival

4. What is produced and what an individual does is based on birth Examples of Traditional Economies are Burkina Faso, Bolivia, Botswana Government intervention is scarce Economic decisions are made based on tradition

5. Command Economies Central authority makes decisions and decides how resources shall be used. There is little individual freedom There is no competition Businesses are not run to create a profit Consumers have few choices in the market place Factories must meet quotas

6. Shortages are common Idea is that collectively you are stronger Public ownership of property Central planning (targeted production levels. Government decides what your occupation shall be.

7. Government sets the prices of goods and services Examples of command economies are Cuba, North Korea, and the People’s Republic of China

8. Market Economies Resources are privately owned Economic decisions are made by individuals that are competing to make profits Individual freedom is very important Economic decisions are made by the principals of supply and demand Profit is the motive for increasing work

9. Sometimes referred to as capitalism. Economic freedom Competition among businesses for customers Individuals can keep profit Competition determines price and increases the quality of a product

10. Mixed Economy Government and individuals share the decision making process Government guides and regulates production of goods and services offered Individuals own means of production Government protects workers from unfair policies Most effective economy for providing goods and services US & most Western European countries.