- Prices and Resource Allocation
- FREE-MARKET = All resources allocated by the price mechanism, no government intervention.
- COMMAND = All resources are allocated by the government, no price mechanism.
- MIXED = Some resources are allocated by the price mechanism and some by the government.
- INCENTIVE = Prices create incentives for economic agents so they can achieve full self-interest.
- SIGNALLING = prices signal what's available, so traders can plan and coordinate economic activities.
- ALLOCATIVE / RATIONING = Buyers and sellers must respond to incentives for the marke to operate efficiently. Changing prices of goods and services allocate an ration the economy's scarce resources.