Economic Systems

What are the three basic economic questions every society must answer?

• How to produce, for whom to produce, and what to produce.

• What to produce, how to produce, and when to produce.

• For whom to produce, how much to produce, and what to produce.

• What products to produce, where to produce, and how to produce.

What is a traditional economy?

• An economy where the government makes most of the economic decisions.

• An economy where consumers and businesses jointly answer questions of what, how, and for whom to produce.

• An economy where traditional societies use ritual/habitat/custom to answer what, how, and for whom to produce.

• An economy where the government and businesses jointly answer questions of what, how, and for whom to produce.

What are the advantages of a traditional economy?

• Everyone knows which role to play.

• Little uncertainty exists over what to produce.

• Little uncertainty exists over how to produce because you do things the same way your parents did.

• None of the above.

What is a command economy?

• An economy where the government makes most of the economic decisions.

• An economy where consumers and businesses jointly answer questions of what, how, and for whom to produce.

• An economy where traditional societies use ritual/habitat/custom to answer what, how, and for whom to produce.

• An economy where the government and businesses jointly answer questions of what, how, and for whom to produce.

Who answers the questions of what, how, and for whom to produce in a market economy?

• The government.

• Consumers and businesses.

• Traditional societies.

• None of the above.

What is the role of the government in a mixed economy?

• To make all economic decisions.

• To make some economic decisions.

• To make no economic decisions.

• None of the these.

Katia is an accountant in a government run business where she was placed after graduation.

• Command
• Traditional
• Free Market
• Mixed

Sam loves science and wants to become a doctor but he is learning how to make clay bricks like his father and grandfather.

• Free Market
• Traditional
• Mixed
• Command

Sarah would like to become a doctor when she grows up.  Unfortunately, she lives in a country where her job will be decided for her by the government.

• Traditional
• Free Market
• Mixed
• Command

Sally works in a private company that has to follow government rules for public safety.

• Free Market
• Command
• Mixed
• Traditional