Economic Spectrum Quiz Review

Things we would like to have—things that improve our quality of life, such as entertainment and vacations.

• Needs

• Wants

• Scarcity

• Market Economy

Are things that are required for survival, such as food, clothing, and shelter.

• Needs

• Wants

• Scarcity

• Command Economy

Having limited resources for unlimited wants and needs.

• Needs

• Wants

• Scarcity

• Mixed Economy

The type of economy that the government or other central authority makes all economic decisions.

• Traditional

• Free Market

• Mixed

• Command

The type of economy that government guides and regulates production of goods and services, and resources are owned by individuals.

• Traditional

• Free Market

• Mixed

• Command

The type of economy where tradition and custom govern economic decisions.

• Traditional

• Free Market

• Mixed

• Command

The type of economy that economic decisions are made by individuals competing to earn profits based on supply and demand.

• Traditional

• Free Market

• Mixed

• Command

Which of the following is NOT a positive about Traditional Economies?

• Little friction among members because there is little competition

• There is little social mobility

• Individual roles are clearly defined

• System is generally well understood by participants

Which of the following is NOT a positive for a Command Economy?

• Lack of incentives for innovation

• Can ensure stability because it does not coincide with business cycles

• Distributes wealth among all of society

• Products produced fulfill needs

Which of the following is NOT a positive for a Free Market Economy?

• Prices determine by market forces (supply and demand); competition brings down prices

• Consumers can buy whatever they like in whatever amounts they want

• Capital flows to where it will get the greatest return

• People can make choices which are harmful to themselves and to others