Types of Economic Systems

• Command 

           -Government owns capital, land, and controls land

• Traditional

           -Based on habits, ritual, and customs
           -They doorway new ideas and technology

• Mixed

          -Businesses are regulated by government to protect public's interest

• Free Market 

          -People and firms act in their own best interest
          -Buyers and sellers exchange goods and services

3 Economic Questions

1. What goods and services should be produced?
2. How should these goods and services be produced?
3. Who will consume these goods and services? 

Product Market
The buyer is usually a consumer and seller (firm)

Factor Market
Also known as the resource market
Factors of production
Buyer is the firm and seller (factor owner) 

Household 
Person or group that share an income

Firm
Organization that produces goods/services for sale