Business Concepts Chapter 2-Economic Systems

A nation's plan for answering the key economic questions

• Economic System

• Direct Economy

• Mixed Economy

• Traditional Economy

Goods are produced the way they have always been produced

• Mixed Economy

• Custom-Based Economy (Traditional Economy)

• Planned Economy

• Market Economy

Resources are owned and controlled by the government.

• Market Economy

• Mixed Economy

• Direct/Planned/Command Economy

• Custom-Based (Traditional) Economy

Found in countries with democratic forms of governments.

• Custom-Based Economy

• Capitalism

• Planned Economy

• Market Economy

Any place where buyers and sellers exchange good and services.

• Marketplace

• Private Enterprise

• Private Property

• Voluntary Exchange

Economic resources are privately owned. Individual owners are free to decide what they will produce.

• Private Enterprise

• Capitalism (Free/Private Enterprise System

• Private Property

• Voluntary Exchange

Buyers and sellers make their own economic decisions to determine what the price will be for goods and services produced and sold.

• Capitalism

• Business

• Marketplace

• Voluntary Exchange

An establishment or enterprise that supplies goods and services in exchange for payment in some form.

• Business

• Competition

• Profit

• Economic System

The right of an individual to choose whether to own a business, what business to enter, and what to produce with only limited government direction.

• Competition

• Private Enterprise

• Private Property

• Voluntary Exchange

You can own, use, dispose of things of value.

• Profit

• Competition

• Private Property

• Private Enterprise