Unit 1 Day 10

Economic Systems

Take Out Your Notebooks

• (drum roll)

• Essential Question #3:

• For Whom To Produce?

A World Where Grades Make Candy

How should we allocate scarce resources??

AKA

For whom to produce???

Market System

a.k.a.

Free Enterprise a.k.a.

Capitalism

Buzz words: ______ motive, ________ exchange, efficient, _______ ________ ownership

__________ & __________ control F.O.P.

__________ & __________ answer the 3 questions. No government __________.

No “pure” examples, but ____, _________, ______ are close

Command System

a.k.a.

Communism

Buzz words: _________ planning, “little _______ to work hard”, “mis-match between ______ & ____________”, government _________

____________

controls F.O.P.

_________

answers 3 questions.

No “pure” examples, but ______, _______, ___________ are close

The Spectrum of Economic Systems

• Hong Kong USA France China North Korea

• Market Mixed-Market Socialism Communism• (Mixed)• Most Freedom Least Freedom• Least Regulation Most Regulation

Economic & Social Goals

Market

Command

Employ-ment

Price Stability

EfficiencyGrowthEquitySecurityFreedom

• _____]-------------------------------------------[________

• Ireland U.S. France China N.Korea

• In the American economy, the goal of• economic equity is MOST connected with• A giving participants a fair chance to• succeed• B restoring laissez-faire capitalism• C creating limits on corporate profits• D subsidizing businesses that would• otherwise fail

A market economy has an advantage overa traditional economy in that the marketeconomyA controls prices and wagesB fixes incomes of consumersC limits the profits of large corporationsD adjusts to consumer demands over time

• Which of the following determines the• division of the economy’s output among• groups and individuals in a market• system?• A the incomes of individuals• B labor unions through collective• bargaining• C marketing departments within firms• D federal and state laws

In a market economy, how are the basiceconomic questions of what, how, and forwhom to produce answered?A by using a nation’s social customs andtraditionsB by using a combination of traditionaland command economiesC by the individuals and firms in thenation’s marketplaceD by the nation’s federal and/or localGovernments

For capitalism to be successful there MUST beA government regulationB perfect informationC private property ownershipD an equal distribution of wealth

A critical principle of capitalism isthe idea ofA communal ownershipB voluntary exchangeC government regulationD limited competition

Which of the following describes how goods pass from producers to consumers in a freeenterprise system?A capital investmentB voluntary exchangeC consumer sovereigntyD taxes and subsidies

• In a market economy, which of the following laws would one be MOST LIKELY to find implemented by the government?

• A laws that set the price of fruits and vegetables

• B laws instructing firms of how many workers to employ

• C laws requiring all property unsold after 90 days to be given to the government

• D laws preventing individuals from destroying the property of others

• Which of the following would one expect to find in a command economy?

• A a government product planning commission

• B a lack of government intervention in the economy

• C strict protection of private property rights

• D underproduction of public goods

• In England, the government owns industries such as the airline, TV stations, hospitals, universities, and defense contractors. However, most other industries involve privately owned firms that compete for business. Which of the following would BEST describe the type of economy England has?

• A tradtitional

• B command

• C market

• D mixed

Which of the following is associated with a command economy?A full employmentB private propertyC inventionsD innovations

• Which of the following economic systems is BEST at providing incentives to produce?

• A. traditional

• B. command

• C. market

• mercantilist

The US economy is one in which producers are generally free to produce what they wantand consumers are free to purchase what they desire, so long as no laws are broken. Atthe same time, however, the government does regulate some aspects of the economy. TheUS can BEST be described as which of the following?

A. a market economyB. command economyC. liberated economy

mixed economy

• Which of the following characteristics BEST defines a command economy?

• A. inequity of income distribution

• B. government ownership of the means of production

• C. private ownership of the means of production

• decentralization of economic decision making