Unit 2: Economic Systems & Market Structures

An economic system in which decisions on production and consumption of goods and services are made by individuals, buyers,

and sellers, NOT governments

• Market

• Command

• Traditional

• Mixed

An economic system in which the government makes all economic decisions

• Market

• Command

• Traditional

• Mixed

Scottish economist who wrote the Wealth of Nations a precursor to modern Capitalism

• Adam Smith

• Joseph Stalin

• Karl Marx

Head of the Soviet Communists after 1924, and dictator of the Soviet Union from 1928 to 1953. He led the Soviet Union with

an iron fist, using Five-Year Plans to increase industrial production and terror to crush opposition

• Adam Smith

• Joseph Stalin

• Karl Marx

Which is a difference in how economic decisions are made in a mixed economy and a market economy?

• Consumers make all economic decisions in a mixed economy, while government makes all economic decisions in a market

  economy

• Government makes all economic decisions in a mixed economy, while consumers make all economic decisions in a market

  economy

• Government and consumers make economic decisions in a mixed economy, while consumers make economic decisions in

  a market economy

• Consumers make economic decisions in a mixed economy, while consumers and government make economic decisions in

  a market economy

How is a traditional economy different from a market economy?

• A traditional economy makes what consumers want, but at a much lower price than a market economy.

• A traditional economy produces what people need to survive, but production in a market economy is driven by consumer

  demand.

• A traditional economy is based on supply and demand, while a market economy is based on customs and survival needs.

• A traditional economy is driven by consumer demand, while a market economy is driven by the government.

How does the decision-making process differ between a monopoly and a pure competition market?

• Decisions made in a monopoly are made by consumers, while the producers make the decisions in pure competition.

• Decisions in a monopoly are made by the producer, while consumer demand determines decisions in pure competition.

• Decisions made in a monopoly are determined by demand, while decisions in pure competition are determined by supply

  and price.

• Decisions in a monopoly are determined by profit and demand, while decisions in pure competition are determined by

  profit and supply.

If Farmer John expresses a desire to sell his corn at a local farmer’s market, he must be aware that the product is standardized

and that he will have no control over the market price. The market structure he is MOST likely participating in is

• pure oligopoly.

• perfect competition.

• differentiated oligopoly.

• monopolistic competition.

Which of the following is the most competitive market structure?

• pure oligopoly.

• perfect competition.

• differentiated oligopoly.

• monopolistic competition.

Which of the following is the least competitive market structure?

• pure oligopoly.

• monopoly.

• differentiated oligopoly.

• monopolistic competition.