WorksheetsCh 2/3 Economics Systems Quiz
Total questions: 25
Worksheet time: 23mins
An economic system is
Shaped by the amount of scarcity on society experiences
Determined by the self interest of the individuals in a society
The way a society uses its resources to satisfy its people’s wants
The way a society limits its people’s desires to easily fulfill them
In a traditional economy,
The goods of the group takes precedence over individual desires
The individual must decide how to make a living for himself or herself
Men and women typically exchange jobs as necessary for the family
Each generation within a clan chooses the job it will specialize in
In a command economy,
Resources are allocated according to consumer needs
Decisions are made by the families, clans, or tribes
Consumers and producers drive the economy
Government owns the means of production
What is one disadvantage of traditional economies?
Individual families adopt new production methods without consulting others
The clans compete for resources.
The system does not serve the society's goal of survival very well.
People are less productive than they might be otherwise
Under democratic socialism, the government
Owns all of the factors of production
Requires absolute obedience to those in power
Owns basic resources
Prohibits private ownership of property
Karl Marx predicted that dissatisfied workers would revolt
And force factory owners to raise wages and accept smaller profits
And take control of the factories where they worked
And use their own labor as a productive resource
And create a society without economic classes
What was the result of the North Korean economic plan of the late 1990s and early 2000s?
The size of the army remained constant
The nuclear weapons program had to be cut back
Millions of people died of hunger and malnutrition
Why do workers in a command economy have little motivation to improve their productivity?
Central planners do not provide jobs that are appropriate for local conditions
Workers are paid the same wages regardless of their output
Production quotas set by planners are typically below factory’s capacity
The lack of consumer goods means people have little reason to work hard
A trade in which both traders believe they are getting is worth more than what they are giving up is called
Free market
profit
laissez-faire
voluntary exchange
What is specialization?
The freedom to purchase what one wants and refuse unwanted products
People’s ability to concentrate their efforts in areas where they have an advantage
The right of individuals and groups to own specific businesses and resources
Sellers’ freedom to get the business of others by offering the best deal
The circular flow model represents
The economic behavior of individuals and businesses
The economic behavior of entrepreneurs
How businesses spend money in the product market
How individuals spend money in the factor market
The factor market is where
Businesses purchase shares from individual stockholders
Individuals purchase goods and services from suppliers
Individuals purchase the factors of production
Businesses purchase land, labor, capital, and entrepreneurship
What is one advantage of a market economy?
Since the central government pays for education, workers are more skilled.
Officials in local communities make economic decisions, leading to greater productivity.
Since the government does not control the economy, the political process is also free
Businesses directly pay for goods and services, such as roads and national defense.
Mixed economies
Are the least common type of economic system today
Often emphasize one type of economic system or another
Typically retain traditional production methods and local markets
Tend to be found in agricultural areas
To nationalize an industry is to
Change from control by local government to central government control
Place economic interactions that cross international boundaries under government control
Limit an industry to doing business within a country’s borders
Change from private ownership to government or public ownership
What is another name for a capitalist economic system?
free enterprise system
open opportunity system
private ownership system
voluntary choice system
The place where people buy and sell goods and services is called the ____.
specialization
capitalism
product market
factor market
The economic system that is based on private ownership of the factors of production.
capitalism
product market
factor market
specialization
____ occurs when sellers act independently to get consumers to purchase their products.
capitalism
product market
factor market
competition
The rights individuals have to own belongings, ideas, workplaces, and labor are called____
private property rights
consumer sovereignty
voluntary exchange
competition
The financial gain that a seller makes from a business transaction is known as____
competition
capitalism
factor market
profit
What type of economic system do you think is most successful? Explain your answer with evidence and examples.
Read the description of the economy of the imaginary country given below. Look at the continuum below the description. Explain (based off the options given) where you think its economy falls along the continuum and list the features of the economy that influenced your answer.
The government in this country provides free public education through high school for everyone. It also runs a university system that competes with private colleges and universities. Most of the land and all industries are owned by individuals or companies. The government provides public goods, including airports, railroads, and expressways that run throughout the land.
Market Economy ←----------------------------------------------------------------------------------> Command Economy
Do you think this economy would fall (1) Fully Market Economy, (2) Fully Command Economy, (3) 50/50 (split evenly), (4) Mixed, closer to Market, (5) Mixed, closer to Command? Explain why you chose your answer.
Read the description of the economy of the imaginary country given below. Look at the continuum below the description. Explain (based off the options given) where you think its economy falls along the continuum and list the features of the economy that influenced your answer.
In this country, most people work together in family groups and go fishing and hunting to get the food they need to survive. The government does not direct these families. However, the government owns several coal mines. It decides how much coal to produce, how much to sell to foreign governments, and how much to keep to run the power plants it owns. The government is considering developing a state-run fish cannery and having citizens work in the factory to add to government revenues.
Traditional Economy ←----------------------------------------------------------------------------------> Command Economy
Do you think this economy would fall (1) Fully Traditional Economy, (2) Fully Command Economy, (3) 50/50 (split evenly), (4) Mixed, closer to Traditional, (5) Mixed, closer to Command? Explain why you chose your answer.
In this country, the government owns all the oil wells and processing plants used to distill petroleum and other products from the oil. Private individuals and companies own farmland, food distribution systems, and grocery stores. However, the government gives economic aid to farmers to make sure that they do not lose money producing their crops. The government also provides health-care and education for every person in the country.
Is this a socialist or communist country? Explain what details helped you decide your answer.
