Economic Systems Quiz

Which of the following is NOT one of the questions that ALL economic systems answer?

• What will we produce?

• How will we produce it?

• For whom will it be produced?

• When does production start?

In which economic system is ALL property owned by individuals?

• Traditional Economy

• Command Economy

• Market Economy

• Mixed Economy

What is capitalism?

• government control of production and goods
• private control of production and goods for profit
• employee control of production, goods, and profit
• international control of production and goods for profit

According to the law of supply and demand, how does the scarcity of product that is in high demand affect prices?

• Scarcity of a high demand product stablizes the market value of the product.
• Scarcity of a high demand product increases the market value of the product.
• Scarcity of a high demand product neutralizes the market value of the product.
• Scarcity of a high demand product decreases the market value of the product.

According to the law of supply and demand, how does over-manufacturing of a product affect the price?

• Over-manufacturing reduces the price of a product.
• Over-manufacturing creates jobs to improve the economy.
• Over-manufacturing raises prices to offset production costs.
• Over-manufacturing leads to peaks in the business cycle.

What does communism believe in?

• Economic system with individuals having private ownership of money/production.
• Maintaining total control over society. 
• Economic equality through elimination of private property.
• A government of the people, by the people, for the people.

All of the following are the benefits of capitalism EXCEPT

• freedom to choose whatever consumers want to buy

• encourages innovation

• incentive to be rich

• equality among people

The government plans how to use resources to make goods and services.

• Market Economy

• Traditional Economy

• Command Economy

• Mixed Economy

Producers and consumers determine how to use resources and make goods based on supply and demand in the market, without government interference.

• Market Economy

• Traditional Economy

• Command Economy

• Mixed Economy

Both supply and demand and the government influence how resources are used to make goods and services.

• Market Economy

• Traditional Economy

• Command Economy

• Mixed Economy