Command Economy Free Market Economy • An economy where people can freely buy & trade goods & services. • The price of each good or service is determined by demand, not the government. Capitalism • An economy where people can own their own business and property. • Competition between businesses is encouraged. • Less government control. Economic Models • An economy that is controlled by the government. • The means of production (factories, etc.) are publicly owned. • Lack of choices of where to shop and sale goods. Socialism Communism • An economy where people are allowed to own property & produce goods but the government tells them: • What they get to keep • How much they must give away • What they can sell it for • An economy & government in which the major productive resources in a society—such as mines, factories, and farms—are owned by the government, and wealth is divided among citizens equally.