Economics of Africa Review

In a traditional economy how are economic decisions made?

• custom and habit
• government leaders
• consumers and planners

In a command economy how are economic decisions made?

• custom and habit
• government leaders
• consumers and planners

In a market economy how are economic decisions made?

• custom and habit
• government leaders
• consumers and the market
• individuals starting new businesses

Who takes on the risk in starting a new business in a market economy?

• consumers
• government planners
• individual business people

Why do most economies in the world today operate between a market economy and a command economy?

• Government control always makes a market economy profitable
• most economies have found they need a mix of free market and some government control to be successful and protect consumers
• most consumers prefer government control to a free market economy

How could the economies of South Africa and Nigeria be best described?

• mixed
• market
• traditional 
• command

What does South Africa specialize in?

• Gold, diamonds and platinum
• oil
• high quality cotton
• textile manufacturing

What does Nigeria specialize in?

• Gold, diamonds and platinum
• oil
• high quality cotton
• textile manufacturing

What does Kenya specialize in?

• Gold, diamonds and platinum
• oil
• high quality cotton
• textile manufacturing

How does voluntary trade help the economy?

• It means prices will always be low
• It works when tariffs are in place
• It encourages specialization and usually means more profit