Economic Systems and Decision Making

What is the primary purpose of an economic system?

• To establish political governance.

• To organize the production of goods and services to meet needs and wants.

• To promote cultural traditions.

• To manage international trade agreements.

Which of the following is NOT one of the three big economic questions that an economic system must answer?

• What should we produce?

• How should we produce it?

• Who should we produce it for?

• When should we produce it?

In traditional economies, what primarily determines economic decisions?

• Government regulations.

• Market demand and supply.

• Cultural traditions passed down through generations.

• Technological innovations.

What is the main focus of production in traditional economies?

• Generating large surpluses for international trade.

• Meeting the basic needs of the local community.

• Developing new technologies and innovations.

• Producing luxury goods for profit.

What is a key strength of traditional economies regarding resource management?

• They encourage rapid industrialization.

• They are often very sustainable due to responsible resource management.

• They prioritize global trade over local needs.

• They quickly adopt modern innovations.

In a command economy, who makes all economic decisions?

• Individual consumers.

• Private businesses.

• The government.

• Cultural leaders.

What guides the government's decisions on what to produce in a command economy?

• Consumer preferences.

• National priorities.

• Historical traditions.

• Profit maximization.

Which of the following is a common challenge faced by command economies?

• Difficulty in meeting basic needs.

• Over-reliance on cultural traditions.

• Heavy restriction or absence of private businesses.

• Lack of government control over industries.

In a market economy, what primarily determines what goods and services are produced?

• Government regulations

• Consumer demand

• Traditional customs

• Central planning committees

How do businesses in a market economy typically aim to attract more customers?

• By adhering strictly to traditional production methods.

• By seeking government subsidies.

• By making their products better, cheaper, or more appealing than competitors.

• By limiting the availability of their goods.