Three basic questions

1. The basic economic problem facing society is ….

       A -  the scarcity of resources.

       B -  too little money.

       C -  prices are too high.

       D -  too little employment

 

2. Scarcity is the situation  which results from ….

       A – a gap between imports and exports

       B -  the irrationality of modern consumers

       C - an excessively large labor force

       D - limited resources and unlimited wants

 

3. Most people live in the countries that have a …..

 A – traditional economy

 B - command economy

 C – market economy

 D – mixed economy

 

4. An economic system that relies on habit, custom, or ritual to decide questions  

    of production and consumption of goods and services is a ….

      A – traditional economy

      B – command economy

      C – market economy

      D – mixed economy

 

5. When voluntary exchanges in the markets determine decisions on production

     and consumption, the society's economic system is a ….

      A – traditional economy

      B – command economy

      C – market economy

      D – mixed economy

 

6. An economic system in which the central government makes all decisions on

     production and consumption of goods and services is a ….

      A – traditional economy

      B – command economy

      C – market economy

      D – mixed economy

 

7. An economy that has both market and command characteristics is best

       described as a ….

      A – traditional economy

      B – command economy

      C – market economy

      D – mixed economy

8. Which of the following questions is NOT part of the production decision?

     A – Why to produce?

     B – How to produce?

    C – What to produce?

    D – For whom to produce?

 

9. In a command economy, the decisions  of  what,  how,  and  for whom to

    produce are made by ….

    A – consumers

    B – the government

    C – private companies

    D – historical customs

 

10. In a market economy ….

    A -  the price and quantity of traded goods are determined by the interaction  

           of supply and demand

    B -  the central government runs the economy according to a strict plan to    

          ensure efficient production

    C -  the price and quantity of traded goods are based on  customs and  

          traditions

    D - economic decisions are made collectively by groups of people for the

          good of the community

 

11. Match the features with different types of economic systems:

 

A - is shaped largely by customs and religion	1. TRADITIONAL ECONOMY
B - is mainly found in rural areas with hunter/gather  societies
C - is also known as a planned or managed   economy
D - where decisions are made according to law of supply and demand	2. COMMAND ECONOMY
E – where the government sets the prices of goods and services
F – is also called a Free Market Economy or Free Enterprise Economy
G – where government and individuals share the decision making process	3. MARKET ECONOMY
H – where basic economic questions are answered by what has been done in the past
I - where government takes care of people's needs; and marketplace takes care of people's wants
J - has no government involvement in economic decisions	4. MIXED ECONOMY
K – where the government or central authority makes decisions and determines how resources will be used
L - where men and women are given different economic roles and tasks

 

Unit 4