Economic Equality, part 1

Economic equality means the same thing to everyone.

• True

• False

Answer explanation

Economic equality can mean different things to different people. It might mean guaranteeing a certain standard of living or quality of life. It could mean everyone having the exact same things. To others it might mean everyone's basic needs being met.

The basic problem that all economic systems are trying to address is...

Answer explanation

Scarcity! Not having enough resources for all of your people! How will we produce enough? How will we decide what to produce? Who will make these decisions? How much will things cost?

Gov'ts typically respond to the problem of scarcity through 3 basic systems. Which is NOT one of them?

• Command economy

• Mixed economy

• Universal Basic Income

• Free market economy

Answer explanation

While Universal Basic Income fits within the command economy model, specifically communism, it is a political decision, and not an economic system.

What does "laissez-faire" mean?

• Help it thrive

• Let it collapse

• Leave it alone

Answer explanation

Laissez-faire capitalism is an economic decision to lessen gov't intervention in the economy and leave the decisions up to the people. People will then (according to the theory) be rewarded for their efforts and the market will be determined by supply and demand.

Where do collectivism and individualism go on this spectrum? You can write the whole word or put "C" and "I".

Answer explanation

The left side of the spectrum is associated with collectivism, and the right side of the spectrum is associated with individualism.

Where do command economy, mixed economy, and free market economy go on this spectrum? You can write "CE," "ME," and "FME" for each.

Answer explanation

A command economy is controlled by the gov't and is associated with collectivism and communism. A free market economy is associated with individualism and laissez-faire capitalism.

Which economic system best represents Canada?

• Command economy

• Mixed economy

• Free market economy

Answer explanation

Canada has a mixed economy - this means we embrace some principles of free market and command economies. We embrace capitalism to a degree while still recognizing the need for gov't intervention.

Which are associated with a command economy?

• Gov't makes decisions about production.

• Supply and demand determines the market.

• No private property or competition.

• Gov't intervention is very limited.

Answer explanation

Command economy:

Characteristics:

•Gov’t decides what will be produced.

•Gov’t owns public property for the people.

•No private property or competition.

•Production quotas are set and prices are set by the gov’t.

•Distribution is controlled according to people’s needs to promote economic equality.

•All decisions are made by the gov’t and a central planning committee.

Which is associated with a command economy?

• Egalitarianism

• Equitable distribution of income.

• Equal opportunity.

Answer explanation

Each 3 economic systems correlate to these 3 answers.

Command economy - Egalitarianism

Mixed economy - Equitable income distribution

Free market - Equal opportunity

Each show how equality can be achieved in different ways and help us understand why economic equality means different things to different people.

The best example of a command economy is:

• Cuba

• Sweden

• Canada

• USA

Answer explanation

Although Sweden does have a high degree of gov't intervention, particularly through progressive taxation, Cuba is a communist country with basic income, social welfare, and state-run enterprise.