Chapter 2

Which involves making economic choices based on customs?

• command
• mixed
• market
• traditional

Which involves having the government make most economic decisions?

• command
• market
• traditional
• mixed

Which is based mainly on individual choice?

• market
• mixed
• traditional
• command

Which is an advantage of a traditional economy?

• very flexible and open to change
• efficient use of resources
• little disagreement over economic goals
• people do jobs best suited to them

Which is a disadvantage of a traditional economy?

• does not ensure maximum productivity
• does not clearly answer economic questions
• does not always use same production methods
• does not produce what ensures survival

Which is another term for a command economy?

• traditional
• mixed
• centrally-planned
• bureaucratic 

Which allows no private ownership of property?

• socialism
• monarchy
• communism
• capitalism

Which of the following statements is an advantage of a command economy?

• Economic decisions are well guided.
• The economy attempts to provide for everyone.
• The economy is rarely short of needed goods
• Economic decisions do not cause much suffering.

Which of the following nations has a command economy?

• Russia
• Japan
• Indonesia
• North Korea

Define profit.

• financial gain from a business transaction
• means “leave things alone”
• involves concentrating efforts in a certain area
• the idea that consumers are free to buy what they want