Using the illustrative categories in Fig 1.1, can we say what a ‘ real ‘ economy looks like – what is its typical form? In fact, mixed economies will be typified by the presence of markets represented all three of the panels (a)-(c)in Fig. 1.1 Mixed economies are defined by the existence in them of some combination of public and private resource allocation: both private firms and government are involved in determining what society produces, how and for whom. Now, in the new millennium, most of the world’ s economies are like this but, prior to the late 1980s, economies in eastern Europe and some in Africa and the Far East were centrally planned rather than mixed. This meant that there was relatively little room for private firms, and resource allocation was primarily determined by the state. Bureaucrats rather than businesspeople how production would be organized, and controlled the way in which goods and services were distributed. Most of the old centrally planned economies are currently engaged in a process of transition to mixed status. This means that the influence of the state over resource allocation is being eroded in these economies and there are increasing opportunities for private firms to actively participate in economic decision – making.