Economic Systems

Societies embrace various economic systems to deal with the fundamental problem of __________.

• Supply

• Scarcity

• People

• Wants

The way the 19th-century Inuit divided the “spoils of the hunt” demonstrates a __________ economy.

• Traditional

• Command

• Market

• Capitalist

In a __________ economy, production questions are answered by the government.

• Traditional

• Command

• Market

• Capitalist

In a __________ economy, questions of what, how, and for whom to produce are answered by the buying and selling activity of individuals.

• Traditional

• Command

• Market

• Communist

__________ is a system in which government owns and controls some, but not all, productive resources

• Socialism

• Capitalism

• Governmentism

• Patriotism

How is the principle of “There’s No Such Thing As A Free Lunch” illustrated in a socialist economy?

• Socialist economies tend to collapse when they become too large.

• The marketplaces in a socialist economy are free for anyone to enter.

• Socialist policies offer advantages to the wealthy at the expense of those less well-off.

• Socialist economies tend to offer extensive government services but have high tax rates.

Which of the following is a disadvantage of a market economy?

• It sustains a high degree of uncertainty.

• It restricts personal freedom.

• It discourages creativity and new ideas for doing things

• It does not allocate resources as efficiently as other types of economies

Which statement describes a disadvantage of a command economy?

• Items tend to be produced solely for the sake of profit.

• It cannot “change direction” easily if the need arises to do so.

• It does little to help the less advantaged obtain the goods and services they need.

• Nothing stops the government from producing things that people don’t need or want.

What kind of economy offers uniformity in wages regardless of individual productivity?

• all economies

• traditional economies

• command and socialist economies

• market and free-enterprise economies

Mixed economies can evolve when societies with different kinds of economies interact.

• True

• False