Unit 2: Economic Systems

Which best describes a public good?

• A good provided by the government 
• A good purchased by individuals
• A good that exists only in a free market
• A good that produces no externalites

Who or what answers the basic economic questions in a mixed economy?

• Individuals and Businesses
• Government
• Custom
• Individuals, Businesses, and Government

Who or what answers the basic economic questions in a command economy?

• Individuals and Businesses

• Government or central authority

• Custom

• Individuals, Businesses, and Government

The struggle among sellers to attract consumers

• voluntary exchange

• profit motive

• property rights

• competition

In the U.S. economy, one purpose of the government is to

• establish prices for most goods and services

• determine the number of people a company can hire

• determine what goods will be produced

• establish rules and regulations to ensure businesses compete fairly

Market failures occur when

• the accumulation of wealth in the free market is shared between a large group of people

• a command economy increases production

• the economy has a strong GDP and low interest rates

• the distribution of goods and services in the free market is not efficient and leads to loss of social wellbeing

What economic goal does a command system achieve better than market systems?

• economic growth

• economic freedom

• economic efficiency

• economic equity

This economic and social goal allows each member of society to make choices about how to use their resources

• economic security

• economic efficiency

• economic freedom

• economic stability

Competition and free enterprise are most common in which type of economic system?

• market

• command

• mixed

• traditional

A ______________ economy is guided primarily by custom, habit, and ritual.

• Traditional

• Planned/command

• Mixed

• Free Market