Unit 2: Economic Systems and the Role of Government Test Review

Which of the following is NOT one of the fundamental economic questions all economies must answer?

• What will be produced?

• For whom will it be produced for?

• How will it be produced?

• How much will be produced?

Which of the following are the four types of economic systems?

• Market, Mixed, Traditional, and Command

• Market, Mixed, Bartering, and Communism

• Socialism, Communism, Capitalism, and Market

• Market, Mixed, Sole Proprietorship, and Traditional

Most countries in the world have what type of economic system?

• Market

• Mixed

• Traditional

• Command

A traditional economy ...

• Based on traditions, and customs - "The way it has always been done"

• People own all of the resources and make the decisions about what will be produced

• The government, or a central authority, owns all of the factors of productions and makes all of the economic choices

• There are elements of more than one economic system

A command economy ...

• Based on traditions, and customs - "The way it has always been done"

• People own all of the resources and make the decisions about what will be produced

• The government, or a central authority, owns all of the factors of productions and makes all of the economic choices

• There are elements of more than one economic system

A market economy ...

• Based on traditions, and customs - "The way it has always been done"

• People own all of the resources and make the decisions about what will be produced

• The government, or a central authority, owns all of the factors of productions and makes all of the economic choices

• There are elements of more than one economic system

A mixed economy ...

• Based on traditions, and customs - "The way it has always been done"

• People own all of the resources and make the decisions about what will be produced

• The government, or a central authority, owns all of the factors of productions and makes all of the economic choices

• There are elements of more than one economic system

What type of economic system does the United States have?

• Market

• Mixed

• Command

• Traditional

What are public goods and services?

• Goods provided by the government that anyone can use

• Goods provided by the government that only those who pay for them can use

• Goods provided by private businesses that anyone can use for free

• Goods provided by public businesses that anyone who pays for them can use

Why does the government provide public goods and services?

• They are too profitable and businesses will fight over providing them.

• Too many businesses want to provide the products, so the government provides them to avoid a surplus.

• They are not profitable, so businesses have no incentive to provide them.

• It is written into the Constitution that the government must provide certain public goods and services.