Mixed Economy

What is it?

An economic system in which economic decisions are guided by the changes in prices that occur as individual buyers and sellers interact in the market place. Most of the resources are owned by private citizens Economic decisions are based on Free Enterprise.

Countries that Use this System

United States

United Kingdom






  • In a mixed economy individuals have the freedom to possess the means of production; to participate in managerial decisions; to buy, sell, fire, and hire as needed; and employees are able to organize and protest peacefully.
  • There's also a high level of state participation and spending, which leads to tax-funded libraries, schools, hospitals, welfare, social security etc.
  • There's little restriction on business, but only for the greater good such as environmental regulations, labor regulation etc.
  • The ideal combination of freedom and restrictions is meant to ensure the maximum standard of living for the total population.


  • Heavy taxes reduce incentives to work hard or make profits
  • Less efficient than private sector
  • Excessive control over business activity can add costs and discourage enterprise
  • It leans more toward government control and less on individual freedom.

How does it address the three basic Economic Questions?

The basic questions are really answered by the government, but more by the individuals. The citizens decided what should be made for them, and how much it should be. They also decide how it should be made because a lot of us own small/private businesses that creates the product. Finally since it is produced for individuals alike, people are the ones who know how to please other people to buy that good or service.


Comment Stream

3 years ago

I feel as thought this presentation very accurately described a market economy. It addressed the FOPs, as well as the advantages and disadvantages of the economy. Offering a broad description and then more detailed facts, this was a very solid representation.

3 years ago

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3 years ago

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3 years ago

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3 years ago

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