Free Market and Command Economies

The concept that people have the right and privilege to control their possessions as they wish.

• legal equality
• open opportunity
• private property
• profit incentive

Profit is ______

• something that leads a person to make a certain choice.
• the amount of a good or service that customers will buy at all prices. 
• The amount of money earned by a buisness after cost are removed.
• The total amount of a good or service that is available to buy.

incentive  is ______

• something that leads a person to make a certain choice.
• the amount of a good or service that customers will buy at all prices. 
• The amount of money earned by a buisness after cost are removed.
• The total amount of a good or service that is available to buy.

In a market economy, who decides on the prices of goods and services?

• government
• buyers and sellers
• firms
• local leaders

Why do markets exist?

• to allow people to exchange goods and services
• to allow people to earn money
• to increase profits for business owners
• to concentrate the productive efforts of individuals

Which of the following describes the benefits of specialization in a free market?

• Specialization leads to higher prices.
• Specialization leads to decreased competition among producers.
• Specialization leads to lower overall output.
• Specialization leads to efficient use of capital, land, and labor.

Which of the following describes a market economy?

• The government decides to move you and many of your friends to the country so you can study farming

• You notice a lot of people in your neighborhood have dogs so you decide to start a dog walking business

• You grow up in a small village and are a fisherman just like your father and grandfather

• The leader of your country decides you will become a coal miner

What countries have a Command Economy?

• Iceland, Sweden, France, Australia

• United States, Russia, Africa, Haiti

• India, United Kingdom, Brazil

• North Korea, Cuba, Soviet Union, China, Vietnam

Command economies are usually dominated by:

• Free enterprise

• Traditions, customs, and beliefs

• State-owned enterprise

• All of the above

A large part of a command economic system is controlled by:

• a centralized power; federal government

• No one. It's an economy based off of individual freedom