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Economic Systems Review

Remember that there are several types of economic systems, and each is determined by how a nation answers the three basic questions all economies must answer:

  • What to Produce,
  • How to Produce, and
  • For Whom to Produce.

Determine the economic system that matches each scenario.

  1. Only gray jackets are manufactured in China
    1. Traditional Economy
    2. Command Economy
    3. Free Market Economy
    4. Mixed Economy

    Hint: Think about the number of choices you enjoy facing when buying your clothes.

    Answer: b. Command Economy.

  2. A family always serves turkey at Thanksgiving
    1. Traditional Economy
    2. Command Economy
    3. Free Market Economy
    4. Mixed Economy

    Hint: Think about other family traditions. What are your favorites involving food, culture, customs, and entertainment?

    Answer: a. Traditional Economy.

  3. An entrepreneur opens a business on Main Street
    1. Traditional Economy
    2. Command Economy
    3. Free Market Economy
    4. Mixed Economy

    Hint: Think about what business you would like to open one day.

    Answer: c. Free Market Economy.

  4. Regulations are imposed on factories by the Environment Protection
    1. Traditional Economy
    2. Command Economy
    3. Free Market Economy
    4. Mixed Economy

    Hint: Think about what it would be like not to have clean air to breath or clean water to drink.

    Answer: d. Mixed Economy.

  5. Fishing and hunting techniques are handed down generation to generation in remote areas of the world
    1. Traditional Economy
    2. Command Economy
    3. Free Market Economy
    4. Mixed Economy

    Hint: Think about the way your grandparents made decisions. Are these “old-fashioned” ways efficient or inefficient?

    Answer: a. Traditional Economy.

  6. You opened a lemonade stand when you were a youngster.
    1. Traditional Economy
    2. Command Economy
    3. Free Market Economy
    4. Mixed Economy

    Hint: Think about how you would have felt if a government official closed your stand because selling lemonade on the sidewalk was not allowed.

    Answer: c. Free Market Economy.

  7. North Korea, Cuba, Russia, and China
    1. Traditional Economy
    2. Command Economy
    3. Free Market Economy
    4. Mixed Economy

    Hint: Think about the choices you like to make daily that would be made for you in these countries.

    Answer: b. Command Economy.

  8. United States, Japan, England, Mexico, Canada
    1. Traditional Economy
    2. Command Economy
    3. Free Market Economy
    4. Mixed Economy

    Hint: Think about the freedoms you have to demand and supply goods and services in these countries.

    Answer: d. Mixed Economy.

You've completed this review!