Economic Systems

In a market economy, what most strongly affects the price and quality of goods and services?

• tariffs

• competition as well as supply and demand

• trade barriers

• government control

What three economic questions are asked when studying the similarities of traditional, command, market, and mixed economies among nations of the world?

• What to produce, why to produce, when to produce?

• What is your opportunity cost, what economic resources are needed, why should these resources be used?

• What is produced, how is it produced, and for whom is it produced?

• What is your opportunity cost, why are economic resources needed, when should these resources be used?

Which of the following would reflect a country with a mixed economy?

• Prices and wages are completely regulated by a country’s government.

• A combination of privately-owned industry and government control.

• A country’s distribution of resources is based on inheritance.

• Prices and wages are determined by the laws of supply and demand rather than being regulated by a country’s government.

In a command economic system or planned economy, the government controls the economy. The state decides how to use and distribute resources. The government regulates prices and wages; it may even determine what sorts of work individuals do. Socialism is a type of command economic system. Historically, the government has assumed varying degrees of control over the economy in socialist countries. In some, only major industries have been subjected to government management; in others, the government has exercised far more extensive control over the economy. The classic (failed) example of a command economy was the communist Soviet Union. The collapse of the communist bloc in the late 1980's led to the demise of many command economies around the world.

According to the passage, why is it unusual for a country to have a command market in today’s society?

• A command market allows too much freedom for private businesses.

• A command economy depends on bartering and most societies do not barter anymore.

• The failure of the Soviet Union proved to the world that command markets do not work.

• Government distributions of resources allowed for too much competition between businesses.

Native Americans used to barter for goods. They did not use currency. Economic decisions were based on customs. What economic system would an indigenous group like the Native Americans most likely have?

• market economy

• free enterprise economy

• traditional economy

• command economy

Which country is closest to pure command?

• North Korea

• United States

• United Kingdom

• Germany

Sam loves science and wants to become a doctor but he is learning how to make clay bricks like his father and grandfather.

• Free Market
• Traditional
• Mixed
• Command

Katia is an accountant in a government run business where she was placed after graduation.

• Command
• Traditional
• Free Market
• Mixed

If my government is selling me bread for $5 a loaf, and I have no choice but to buy that type of bread, I live in a _____ economy. 

• Traditional 
• Market 
• Command 
• Mixed

I am a farmer in Africa, and have always traded for my goods.  I have a _____ economy. 

• Traditional 
• Command 
• Market
• Mixed