1. Market Economy: Circular Flow
2. Command Economy
2.1. Cons
2.1.1. 1
2.1.1.1. Produce too much of one thing and not enough of another, Face shortages
2.1.1.2. Workers have little motive to improve productivity and to save resources
2.1.1.3. They do not anticipate consumer demand
2.1.1.4. Great suffering for people living under them endured.
2.1.1.5. Plans are created ahead of time
2.2. Pros
2.2.1. 2
2.2.1.1. They seek to provide for everyone
2.2.1.2. They are planned out on a large scale and meet social goals, create industrial powers.
2.2.1.3. Can use nation's resources to produce items needed for the society that do not produce money.
2.3. Examples
2.3.1. China, North Korea, Cuba
2.3.2. Karl Marx: the most influential leader: The communist Manifesto
2.4. Caractheristics
2.4.1. The state directed and controlled a large share of the country's economic output
2.4.2. The state set production goals, controlled prices, and allocated resources throughout most of the economy.
3. Market Economy
3.1. Cons
3.1.1. Tendency for an inequitable distribution of wealth, poorer work conditions and environmental degradation
3.2. Pros
3.2.1. Increased efficiency, productivity, and innovation.
3.2.2. All resources are owned by individuals and the decisions about them are made by those individuals.
3.3. Examples
3.3.1. Mexico, United States, United Kingdom (the prices of goods and services are set by supply and demand).
3.4. Characteristics
3.4.1. Based on individuals choice, not governments directives.
3.4.2. Self-interested: Max. Profit
3.4.3. Private property rights
3.4.4. Competition
3.4.5. Consumer Sovereignty
3.4.6. Specialization
3.4.7. Markets: place or situation in which people buy and sell resources/good/services with Voluntary exchange.