Comparing Economic Systems

What is an ADVANTAGE of a market economy compared with a traditional economy?

• In a market economy, economic decisions are made the way they have always been made.

• In a market economy, innovation and competition in the marketplace are encouraged.

• In a market economy, the government decides what is produced.

• In a market economy, there is an equal standard of living for everyone.

What is a difference between a market economy and a command economy?

• Competition provides consumers choices in a market economy.

• Supply and demand determine prices in a command economy.

• The government ensures much competition in a command economy.

• The government selects what is produced in a market economy.

In which economic system do individuals decide what, how and for whom goods and services are produced?

• Command

• Market

• Socialist

• Traditional

Goods produced and used to make other goods and services are called:

• scarcity

• capital resources

• human resources

• natural resources

Compare the way economic decisions are made in an Amish community with the way they are made in Cuba.

• Individuals and government make the decisions in an Amish community.

• Individuals make the decisions in Cuba.

• Tradition dictates how decisions are made in Cuba.

• Tradition dictates how decisions are made in an Amish community.

What do a command economy and a mixed economy have in common?

• Economic decisions are based on customs in both systems.

• Government controls or dictates what is produced in both systems.

• Government takes care of people's needs in both systems.

• Supply and demand determine prices in both systems.

What is a difference between a traditional economy and a free enterprise system?

• Decisions are made the way they always have been in a free enterprise system.

• Economic decisions are centered around the family in a free enterprise economy.

• Economic decisions are determined by competition in a traditional economy.

• Supply and demand drive economic decisions in a free enterprise system.

What is a disadvantage of a market economy compared with a command economy?

• Market economies create a huge gap between the wealthy and the poor.

• Market economies do not offer much competition for consumers.

• Market economies provide an equal standard of living for everyone.

• The government sets prices in a market economy.

Which economic system is based on customs and doing things the way they have always been done in the past?

• Command

• Market

• Socialist

• Traditional

The knowledge, efforts, and skills people bring to their work, also known as labor is called:

• scarcity

• natural resources

• human resources

• capital resources