1. Factors of Production
-Capital or Capital Goods---the money or tools needed to produce goods/services
-Land / Resources– the natural resources needed to produce goods/services

2. Factors of Production
-Labor– the work required to produce goods/services
-Management—the decision making process that is involved in producing goods/services

3. Traditional Economy
Advantages
Disadvantages - -
-economy where people supply most of the goods and services they use
-many things are done by tradition
-usually in places of little modern technology

4. Command Economy
Advantages
Disadvantages - -
-economy where the government controls the factors of production
-Government makes all decisions

5. Market Economy
Advantages
Disadvantages - -
-individuals make all economic decisions according to supply and demand
-laissez-faire economics
-also called free market, free enterprise, or capitalism
-competition and supply and demand determine the economy-----the “invisible hand”

6. Mixed Economy
Advantages
Disadvantages - -
-a mixing together of market and command systems
-individuals have economic freedoms
-government retains some control for benefit of citizens