1. Free Enterprise and Free Market Systems

2. Factors of Production There is a conflict between what people want/need and what is available. The lack of resources creates the condition called scarcity. To answer the questions of what to make, how to make it, where to make it and what to charge, we need to know the 4 factors of production. The 4 factors of production are: land, labor (who will do the work,) capital (the money needed to do the work,) and entrepreneurship (the folks with the ideas, the skills to do the job, and the courage to try.)

3. Traditional Economy A traditional economy is a system where traditions, customs, and beliefs shape the goods and products the society creates. Countries that use this type of economic system are often rural and farm-based. Also known as a subsistence economy, a traditional economy is defined by bartering and trading. Little surplus is produced, and if any excess goods are made, they are typically given to a ruling authority or landowner.

4. Command A command economy, or a planned economy, is where the big decisions are made at the center by the government. In an economic system the main decisions are, for example, allocating resources like labor, capital and oil. Prices, too, are controlled. In a command economy, these decisions are taken by a central body, usually the government.

5. Market Economy A free market is a market economy system in which the prices for goods and services are set freely by consent between vendors and consumers, in which the laws and forces of supply and demand are free from any intervention by a government, price-setting monopoly, or other authority. A regulated market, in which government intervenes in supply and demand through non-market methods such as laws creating barriers to market entry or price fixing.

6. Types of Industry Primary Industries – they use natural resources to make money. (Farming, fishing, etc.) Manufacturing industries – people and businesses make, finished products from raw materials. (Wood made into a chair, cars made from parts, etc.) Wholesale industries – businesses that sell things just to businesses usually at a reduced price. Retail industries – business that sell directly to the final customers. Service industries – businesses that sell work instead of goods. ( teachers, doctors, etc.)