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The Complete Idiot's Guide to Economics, 2nd Edition by Tom Gorman

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Getting Organized: Command, Market, and Mixed Economies

Not all economies are organized in the same way. The three major ways they can be organized are as a market economy, a command economy, or a mixed economy.
In a market economy, consumers and producers decide what they want to purchase and produce by voting with their dollars in the marketplace. Purchasers decide what to buy based on their preferences and the prices of goods and services. Producers decide what to produce based upon their sales and the prices they get for their goods and services. In a pure market economy, also known as a laissez-faire economy (from the French allow to do), the government plays a very limited role. The government does not direct, and may even lack the power ...

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