Answer to Question #35026 in Microeconomics for musaka

Question

Explain the main differences among the four types of economic system

Answer 1

There are basically four kinds of economic systems:

1) Market economy-
An economic system in which individuals own and operate different factions of
production.
Examples: Free Enterprise & Capitalism

2) Command economy -
An economic system in which government owns and operates all factions of
production.
Examples: Socialism & Communism

3) Traditional Economy -
An economic system based on culture and tradition. Economy is based on
agriculture and hunting.
Examples: Non-Industrialized agrarian societies.

4) Mixed Economy -
An economic system where both command and market systems are featured.
Examples: United States is not a pure capitalist country for there are forms of
socialism instilled in it to benefit individuals in need of services and has
minimum wages, however, free enterprise reigns in the U.S. China also has both
forms of economy, however, the Chinese government controls the prices and
production.