Economic Systems

Organize these features into the correct economic system.

Groups:

(a) Planned Economy

,

(b) Mixed Economy

,

(c) Market Economy

• Both the government and firms choose how to allocate resources.

• Firms will try and minimise production costs and maximise profits.

• Products are produced by private firms and by the government.

• Firms choose according to what customers are willing to pay for.

• Some products are sold for money in the market whilst the government distributes others.

• The government distributes goods and services, sometimes equally or maybe according to need.

• Government decides and makes decisions based on factors other than cost.

• Products are distributed according to who can afford to pay the highest price.

• Government decides what goods and services should be produced.

Which economic system is controlled entirely by government decision making?

A market economy is controlled exclusively by the government,

• True

• False

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

• Government ownership of resources

• Private ownership of resources

• Centralized decision-making

• Fixed prices set by the government

In a market economy, prices are determined by:

• The government

• Supply and demand

• International organizations

• Large corporations

Which of the following best describes a market economy?

• An economy where the government makes all economic decisions

• An economy where economic decisions are made by individuals and businesses

• An economy where resources are distributed equally by the government

• An economy where there is no competition

What is a key feature of a command economy?

• Private ownership of businesses

• Government control of all major sectors

• Free market competition

• Decentralized decision-making

Which economic system is characterized by the absence of government intervention?

• Mixed economy

• Command economy

• Traditional economy

• Market economy

In which type of economic system are resources allocated based on customs and traditions?

• Market economy

• Command economy

• Mixed economy

• Traditional economy

Which of the following is not one of the fundamental economic questions?

• What should be produced?

• How should it be produced?

• What price should it sell for?

• Who should it be produced for?