Economic Decisions and Systems Quiz

What are needs?

• Things that add comfort and pleasure to your life

• Products that you can see and touch

• Things that are required in order to live

• Activities that are consumed at the same time they are produced

What are goods?

• Things that are required in order to live

• Things that add comfort and pleasure to your life

• Products that you can see and touch

• Activities that are consumed at the same time they are produced

What is the basic economic problem?

• Scarcity - not having enough resources to satisfy every need

• The process of choosing which wants will be satisfied

• The value of the next-best alternative that you did not choose

• Having unlimited wants and limited funds

What is the first step in the decision making process?

• Evaluate the advantages/disadvantages of each choice

• Identify the choices

• Define the problem

• Choose one

What are the three economic questions?

• What goods and services will be produced? How will goods and services be distributed? What needs and wants will be satisfied with the goods and services distributed?

• What goods and services will be produced? How will goods and services be produced? What needs and wants will be satisfied with the goods and services distributed?

• What goods and services will be produced? How will goods and services be distributed? What needs and wants will be satisfied with the goods and services produced?

• What goods and services will be produced? How will goods and services be produced? What needs and wants will be satisfied with the goods and services produced?

What is a command economy?

• Government owns & controls resources; decides what and how goods are produced, distributed, shared. Personal economic freedom is limited

• People own and control resources; consumer purchases drive businesses to meet needs and decide what goods and services to produce

• Most business is privately owned by individuals, not the government

• Goods and services produced the same way as prior generations; for less developed countries not engaged in the global economy

What is a market economy?

• People own and control resources; consumer purchases drive businesses to meet needs and decide what goods and services to produce

• Most business is privately owned by individuals, not the government

• Government owns & controls resources; decides what and how goods are produced, distributed, shared. Personal economic freedom is limited

• Goods and services produced the same way as prior generations; for less developed countries not engaged in the global economy

What is a traditional economy?

• Most business is privately owned by individuals, not the government

• People own and control resources; consumer purchases drive businesses to meet needs and decide what goods and services to produce

• Government owns & controls resources; decides what and how goods are produced, distributed, shared. Personal economic freedom is limited

• Goods and services produced the same way as prior generations; for less developed countries not engaged in the global economy

What is a mixed economy?

• Government owns & controls resources; decides what and how goods are produced, distributed, shared. Personal economic freedom is limited

• Most nations are this – elements of government control and consumer driven

• People own and control resources; consumer purchases drive businesses to meet needs and decide what goods and services to produce

• Goods and services produced the same way as prior generations; for less developed countries not engaged in the global economy

What determines what is produced and at what price in a market economy?

• Quantity of a good or service that businesses are willing and able to provide

• Quantity of a good or service that consumers are willing and able to buy

• Government regulations

• Consumer preferences