Command,
Market, Mixed
(Market)
Economies
Kirthank Manivannan
Criteria

Resource Allocation

Labor Allocation

Who Determines How, What, For Whom are
Goods Produced
Command Economies
Criteria
Resource Allocation
Labor Allocation
Who Determines
How, etc., to
Produce
Command
Economy –
Where one
person or the
government
has complete
control over
the economy,
and chooses
where
resources are
allocated, and
what people
should buy,
and what
products they
should work
on.
The government
chooses where to
allocate resources.
Planned ahead of time
for certain goods. If the
future situation goes
wrong, nobody buys,
and the resources are
wasted. Generally poor
allocation.
The government
chooses where to
allocate the
workforce. Like
resource allocation,
it is planned ahead
and can lead to
people working on
something that may
not sell, and thus
poor allocation.
How: One person,
a government,
whoever is in
charge.
What: Same as
Above.
Whom: Same as
Above, they
determine prices,
and thus choose
who will be able to
buy certain
products (poor
cannot afford
expensive, etc.).
Market Economies
Criteria
Resource Allocation
Labor Allocation
Who Determines
How, etc., to
Produce
Market
Economy – An
economic
system where
private
industries
direct the
economy.
Supply and
Demand
determine
where
resources
should be
allocated to,
and help drive
the economy.
Individual businesses
choose where to
allocate their own
resources, based on
their own financial
status, and if they can
pay for the resources.
Allocated based on
their own needs.
Individual
businesses choose
where to allocate
their workforce,
based on how their
goods/services are
doing, and whether
one area needs
more attention than
another.
How: Firms decide
how to produce.
What: Consumers
determine what is
produced (if
consumers don’t
like something, the
company will
change it).
Whom: Prices
determine who can
purchase (prices
are determined by
businesses).
Mixed (Market) Economies
Criteria
Resource Allocation
Labor Allocation
Who Determines
How, etc., to
Produce
Mixed (Market)
Economy – A
system where
both the
government
and private
businesses
direct the
economy. Both
determine
resource
allocation.
Individual businesses
choose where to
allocate their own
resources, based on
their own financial
status, and if they can
pay for the resources.
Allocated based on
their own needs.
HOWEVER, some
resources for certain
goods are subsidized,
so the price is lower.
Individual
businesses choose
where to allocate
their workforce,
based on how their
goods/services are
doing, and whether
one area needs
more attention than
another. The
government also
controls
businesses, so
they decide the
allocation.
How: Firms decide
how to produce.
What: Consumers
and government
determine what is
produced.
Whom: Prices
determine who can
purchase but some
goods/merit goods,
and services, are
provided by the
government
(schools, etc.)
Cuba = Command Economy

http://www.thecuttingedgenews.com/index.php
?article=73638
 “The persistent enemies of future Cuban
prosperity are: a complete lack of
economic freedom; an inefficient,
antiquated command economy; a
parasitic, rent-seeking, military-dominated
bureaucracy; massive corruption; and the
lack of an independent judiciary, rule of law,
or sanctity of contract.”
 Lack of economic freedom means that the
government or a person has control of what
happens with businesses and the economy,
thus Cuba is a Command Economy.
US = Market Economy

http://www.washingtontimes.com/news/2012/ja
n/17/still-in-top-10-but-falling-fast/

US still in top 10 of free economies, which
means that the government does not control
the economy and corporations as much as
other countries.

Against taxes, US’s tax system needs to be
changed, or else it will change from
economic freedom to more of a mixed
economy, since nowadays some businesses
are being subsidized, but only starting to
change.

US mostly follows the Market Economy
system.
Japan = Mixed (Market)
Economy

Resource Allocation: Some resources are
subsidized:
http://www.bloomberg.com/news/2011-0826/japan-passes-renewable-energy-bill-oneprecondition-of-kan-s-resignation.html
 Government subsidizes renewable
sources’ electricity in order to incentivize it
 Since Mixed (Market) Economies have the
government controlling businesses, which
can subsidize corporations to help them
(merit good producing businesses), this
article proves that Japan is a Mixed
(Market) Economy.