Economic Systems Flocab Read & Respond

A group of businesspeople open a factory in their hometown to produce car parts. The business owners decide which parts and how many to produce based on customer orders. Under which type of economic system does this business most likely exist?

• mixed economy

• market economy

• command economy

• traditional economy

According to the passage, why can’t Cuba be considered a purely command economy?

• Cuba recognizes private property.

• Cuba offers publicly-funded social programs.

• Cuba’s economy lends itself to a winner-take-all attitude.

• All economic systems are actually considered a mixed economy.

According to the passage, what determines how resources are collected, produced and distributed in a traditional economy?

• birth and societal role

• choice and competition

• technology and innovation

• historical precedent and environment

Nikola’s t-shirt business produced 100 shirts. In less than one day, all 100 shirts sold out. Fifty additional orders were placed, but could not be fulfilled since he had run out of shirts. Which of the following is true?

• There was more supply than demand.

• There was more demand than supply.

• Supply and demand were about equal.

• The rate of production exceeded demand.

With which of these statements would an opponent of command economies most likely agree?

• A. With no incentive to earn more money, people won’t work hard.

• B. Stability should come first and foremost in any economic system.

• C. We must ensure that all citizens receive equal outcomes at all costs.

• D. Unwise spending should not be a possibility in an economic system.

Based on the passage, which of the following best describes the relationship between a command economy in theory and command economies in practice throughout history?

• In theory, a command economy is not subject to market forces. In practice, command economies have been affected by supply and demand.

• In theory, a command economy promotes instability. In practice, command economies have been insulated from instability.

• In theory, a command economy promotes fairness. In practice, command economies have resulted in unchecked power.

• In theory and in practice, command economies achieve equal outcomes.