Trade Barriers & Economies Day 2

What are the advantages and disadvantages of a command economy?

• The government provides for basic needs, but choice is limited.

• The government is not involved in production, consumption, or distribution. Many choices available

• Mix between government control and private business. Limited government regulation of industry.

• Businesses are based on tradition and choices are limited. People barter for goods.

Who or what answers the economic questions of “What to Produce? How to Produce? For Whom to Produce?” in a mixed economy?

• Decisions are based on the traditions and customs of the society.

• Decisions are made by the government.

• Decisions are made by individual producers and consumers.

• Decisions are made by a combination of the government and individuals.

The diagram shows an economic continuum. Which letter on the continuum represents where a Pure Market economy would most likely be located.

<-----A------B------------------------------C---------------------------------D-->

Total Government No Government

Control Control

• A

• B

• C

• D

A person who comes up with a product or service, and finds the money and time to produce this new product.

• Entrepreneur
• Incentive
• Specialization
• Barter

Moana's village would be an example of a ___________ economy.

• Traditional

• Planned/command

• Mixed

• Free-market