FOUNDATIONS of ECONOMICS

In this type of economy, the people decide the supply, demand, and price.  

• Market 

• Traditional

• Command 

• Mixed

Answer explanation

In a market economy, the people decide the supply, demand, and price of goods and services. This type of economy is driven by the forces of supply and demand, allowing for a more flexible and efficient allocation of resources. Unlike traditional, command, or mixed economies, a market economy relies on individual choices and voluntary transactions to determine the production and distribution of goods and services.

This type of economy is passed down through family traditions. They learn from their parents. 

• Traditional 

• Market 

• Mixed 

• Command 

Answer explanation

A traditional economy is one where customs, traditions, and beliefs shape the goods and services produced, as well as the rules and manner of their distribution. In this type of economy, people learn from their parents and pass down family traditions, making it the correct choice for the question.

Which type of economy has central ownership, the government, and lack of individual choice?

• Market

• Mixed

• Command

• Traditional

Answer explanation

A command economy is characterized by central ownership, usually by the government, and a lack of individual choice. In this type of economy, the government makes all the decisions regarding production, distribution, and consumption of goods and services. This is in contrast to market, mixed, and traditional economies, where individual choice and market forces play a more significant role.

Capitalism is in what type of economy?

• Traditional

• Command

• Market

• Authortarian

Answer explanation

Capitalism is a market economy, where individuals and businesses make decisions about production, distribution, and consumption of goods and services. In this system, prices are determined by supply and demand, and competition drives innovation and efficiency. Traditional, command, and authoritarian economies have different structures and decision-making processes, making the market economy the correct choice for capitalism.

Trading something for something else - no currency involved

• demand

• barter

• goods

• market

Answer explanation

The question asks about a method of trading where no currency is involved. Among the options, 'barter' is the correct choice as it refers to the exchange of goods or services directly without using any currency. The other options, such as demand, goods, and market, do not describe this type of trading.

Tools we use to make products

• capital resources

• human resources

• natural resources

• entrepreneurs

Answer explanation

Capital resources are the correct choice because they refer to the tools, equipment, and machinery used to produce goods and services. Human resources involve the workforce, natural resources are raw materials from nature, and entrepreneurs are individuals who create businesses. Capital resources specifically focus on the tools used in production.

A person who buys goods and services

• consumer

• entrepreneur

• resource

• currency

Answer explanation

A consumer is the correct choice because it refers to a person who purchases goods and services for personal use. Entrepreneurs create and manage businesses, resources are materials or assets used in production, and currency is a medium of exchange. The question asks for a person who buys goods and services, which is a consumer.

The making, buying and selling of goods and services

• economics

• inflation

• market

• barter

Answer explanation

Economics is the correct choice because it is the social science that studies the production, distribution, and consumption of goods and services. The question describes the making, buying, and selling of goods and services, which are all key components of economics. Inflation, market, and barter are related concepts, but they do not encompass the entire scope of the question.

Which type of economy is usually paired with a Communist government?

• Mixed

• Market

• Command

• Traditional

Answer explanation

A Command economy is typically associated with a Communist government. In this type of economy, the government controls and plans all economic activities, including production, distribution, and consumption. This centralized control aligns with the principles of communism, which emphasize collective ownership and the absence of social classes.

Individuals who come up with a new idea for a good or service, then they make it a reality

• resource

• human resources

• consumer

• entrepreneur

Answer explanation

An entrepreneur is the correct choice because they are individuals who come up with new ideas for goods or services and then work to make those ideas a reality. Entrepreneurs take risks and invest resources to create and develop new businesses, products, or services, distinguishing them from other options like resources, human resources, and consumers.