Use the descriptions to place your terms on your spectrum. Economics Vocabulary Use the descriptions to place your terms on your spectrum.

*Command A command economy is a system where the government owns the property, sets prices and wages, tells people what jobs they will do and how much to produce. Sometimes this type of economy is called “communist.”

Market In a market economy, individuals make key economic decisions. They decide the price of goods and how much of a product is produced indirectly through the law of supply and demand. Individuals own private property and decide what jobs they will have.

Free Enterprise* The system has four characteristics: little to no control of the market by the government, doing business with anyone you want, ownership of private property, and the ability to work to make a profit; this system is also known as capitalism Most market economies use the free enterprise system.

Traditional* In this type of system, people do the same job that their parents did. Many people are simple farmers who grow just enough food to feed their families and most communities make what they need locally. The terms subsistence farming and cottage industry are often used when referring to a traditional economy.

Socialism The government functions as a democracy, but it has a large role in people’s lives. It uses tax money to take care of many of its people’s needs: health care, college tuition, maternity leave, etc.