Market and Command Economy
Alishia and Tammy
Where businesses and consumers makes economic decisions with NO government control over the economy.
So individuals are responsible for income, housing and health care.
Decisions are based on the interaction between supply and demand.
"Invisible hand" describes how individuals actually benefit society as a whole.
** Also called Capitalism
** Free enterprise
This is where the government officials controls all major areas of the economy.
Government manages all or most of the resources.
Government set prices and decisions.
Income, housing, healthcare and education are government provided.
The command economy answers the three basic economic questions:
1. What to produce
2. How to produce
3. From whom to produce
** Also called Communism
** Opposes the free market pricing, private property, competition, and consumer choice.