family for their personal consumption. There is little surplus and little exchange of goods. There is only a limited need for markets (places to buy and sell goods and services). This is the type of economy found in less developed nations of the world, usually in rural areas. Most less developed nations today are a mix of traditional and either market or command economies. Command EconomyThere are three types of economies: traditional (also known as subsistence), command (also known as planned) and market (commercial). In a command economy, decisions about what and how much to produce, where to locate economic activities, and what prices to charge for goods and services are made by a single, central government agency or authority. These economic decisions are often made to further social goals. Communism is one example of a command economy; socialism is another. In a command economy, the government, not market forces, controls the price of goods including agricultural products. Production costs are not reflected in prices. For example, it may cost $1.00 to produce a loaf of bread, but the price may be set at $.25 to ensure consumers are able to afford adequate supplies. Market EconomyThere are three types of economies: traditional (also known as subsistence), command (also known as planned) and market (commercial). In a market economy (elements of which may be considered a free enterprise economic system), decisions about what and how much to produce, where to locate economic activities, and what prices to charge for goods and services are determined by laws of supply and demand and "the market." Profit drives decisions in a market economy. USSR, The command economy:From 1928 onwards the Soviet economy course was charted at the centre and directives issued outwards from the centre passing downwards and outwards through a massive hierarchical bureaucracy. Stalin's emphasis on centralization, state ownership of the means of production, ...
