| A | B |
|---|
| Economic System | a nation’s plan for answering the three economic questions |
| Command Economy | the resources are owned and controlled by the government…government officials decide how to answer the Three Economic Questions |
| Communism | a form of a command economy where government controls most of the resources and decisions |
| Market Economy | the resources are owned and controlled by the people of the country…individuals answer the Three Economic Questions |
| Marketplace | anywhere that goods and services exchange hands |
| Traditional Economy | goods and services are produced the way it has always been done…used in less developed nations |
| Mixed Economy | combines elements of both the command and market economies…most nations fall into this category |
| Capitalism | private ownership of resources by individuals or businesses rather than by the government…individual owners decide what to produce and individual consumers decide what to buy |
| Private Property | you may own whatever you want as long as it does not break any laws |
| Freedom of Choice | you may choose what to buy, what to sell, how to produce, etc. as long as it doesn’t break any laws |
| Profit | is the money left over from sales after all of the costs of operating a business have been paid… it is at the heart of Free Enterprise |
| Competition | rivalry among businesses to sell their goods and services |
