Economy 1
Name one country that follows a Market Economy system.
The United States
In a Command Economy, the government typically:
A) Makes most decisions about what goods and services are produced.
B) Has no involvement in the production process.
C) Allows businesses to freely set prices based on demand.
D) Relies on consumers to drive all business decisions.
A) Makes most decisions about what goods and services are produced.
Which economic system combines both government control and private enterprise?
A) Market Economy
B) Command Economy
C) Mixed Economy
D) Traditional Economy
C) Mixed Economy.
Which of the following is true about a Traditional Economy?
A) Prices and wages are set by the government.
B) Decisions are based on customs, traditions, and beliefs.
C) People have the freedom to choose their own job and goods.
D) The economy is centered on large-scale industries and technology.
B) Decisions are based on customs, traditions, and beliefs.
In a Command Economy, the government has little to no control over business operations.
False.
In a Market Economy, who determines the prices of goods and services?
Consumers and producers (based on supply and demand).
In a Command Economy, the government may provide goods and services for free to its citizens.
True.
In a Mixed Economy, how do businesses adapt to both government regulations and market forces?
Businesses comply with regulations set by the government while still responding to market demand and competition.
In a Traditional Economy, why are jobs and products often passed down through generations?
Because the economy is based on traditions and customs, so skills and roles are often inherited within families or communities.
In a Market Economy, the law of supply and demand largely determines prices.
True.
Which of the following is a characteristic of a Market Economy?
A) The government controls all production and prices.
B) Individuals make decisions about production and pricing.
C) The government provides subsidies for all businesses.
D) Businesses only produce what is required by the state.
B) Individuals make decisions about production and pricing.
How does the government’s role in a Command Economy affect businesses?
The government owns and controls major industries and sets prices, limiting the freedom of businesses.
Which of the following is true about a Mixed Economy?
A) The government owns all industries.
B) There is a blend of private business and government regulation.
C) Businesses have no government oversight.
D) Prices are entirely controlled by the state.
B) There is a blend of private business and government regulation.
What is the major disadvantage of a Traditional Economy?
It can be slow to adapt to new technologies or changes in the market.
Mixed Economies are always fully government-controlled but with some private businesses.
False.
Which is a primary advantage of a Market Economy?
A) The government ensures everyone has equal access to goods.
B) Businesses are more likely to be efficient and innovative.
C) All resources are equally distributed among the population.
D) The government has more control over business practices.
B) Businesses are more likely to be efficient and innovative.
In which type of economy would you expect to see nationalized industries, where the government owns and controls production?
Command Economy.
Give an example of a country that uses a Mixed Economy.
The United Kingdom, Canada, or Australia.
In which type of economy would you expect to find bartering as a common way to exchange goods?
Traditional Economy.
In a Traditional Economy, businesses usually make decisions based on what is best for the entire country.
False.
What is the role of competition in a Market Economy?
It encourages businesses to innovate, lower prices, and improve quality to attract consumers.
Name a country that has a Command Economy.
North Korea.
What is one advantage of a Mixed Economy?
It combines the efficiency of a market economy with the social welfare protections of a command economy.
Name a real-world example of a Traditional Economy.
Some indigenous tribes, like the Inuit in Canada or the Maasai in Africa.
In a Command Economy, the government may provide goods and services for free to its citizens.
True