After studying chapter 2, you MUST be able to

distinguish among the three types of economic problems

state the characteristics of market and planned economy

state how the market economy ( by market / price mechanism ), command economy ( by government / planning ) and tradition economy ( by customs and traditions ) solved the three economic problems

	command economy	market economy
Ownership of most resources	state - owned	privately - owned
Decision of resource allocation	1. government control dominates 2. centralized decision making	1. price mechanism dominates 2. decentralized decision making