Question

What are the three ways that societies can organize themselves economically?

Short answer

The three ways in which societies can organize themselves economically are:

1. As a Traditional Economy
2. As a Command Economy
3. As a Market Economy

Step-by-step solution

Step 1. Society as a traditional economy

The traditional economy is typically an agricultural economy where things are done the same as they have always been done.

It is the oldest system and is used in parts of Asia, Africa, and South America.

In this economy, they produce what they consume. The families are farmers and they produce crops for consumption.

Step. Society as a Command Economy

A Command Economy is an economy where economic decisions are passed down from the government authority and where the government owns the resources.

It is still practiced in Cuba and North Korea.

In this economy, the government decides what goods and services are to produce, what techniques to use for production and what prices to charged for the goods.

Step 3. Society as a Market Economy

A Market economy is an economy where economic decisions are decentralized, private individuals own resources, and businesses supply goods and services based on demand.

In this economy, decisions are made by the market forces of demand and supply.

The more the society values the person's output the higher will be the income of that person.