Economic Systems Quiz

What is an economic system?

• A. A system that determines the type of economic system a society has.

• B. An organized way of providing for the wants and needs of their people.

• C. A system that determines the type of political system a society has.

• D. A system that determines the type of social system a society has.

What are the three basic economic questions every society must answer?

• A. How to produce, for whom to produce, and what to produce.

• B. What to produce, how to produce, and when to produce.

• C. For whom to produce, how much to produce, and what to produce.

• D. What products to produce, where to produce, and how to produce.

What is a traditional economy?

• A. An economy where the government makes most of the economic decisions.

• B. An economy where consumers and businesses jointly answer questions of what, how, and for whom to produce.

• C. An economy where traditional societies use ritual/habitat/custom to answer what, how, and for whom to produce.

• D. An economy where the government and businesses jointly answer questions of what, how, and for whom to produce.

What are the advantages of a traditional economy?

• A. Everyone knows which role to play.

• B. Little uncertainty exists over what to produce.

• C. Little uncertainty exists over how to produce because you do things the same way your parents did.

• D. None of the above.

What are the disadvantages of a traditional economy?

• A. Tends to discourage new ideas/ways of doing things.

• B. Strict roles punish people who act differently/break rules.

• C. Lack of progress leads to economic stagnation/lower standard of living.

• D. None of the above.

What is a command economy?

• A. An economy where the government makes most of the economic decisions.

• B. An economy where consumers and businesses jointly answer questions of what, how, and for whom to produce.

• C. An economy where traditional societies use ritual/habitat/custom to answer what, how, and for whom to produce.

• D. An economy where the government and businesses jointly answer questions of what, how, and for whom to produce.

Who heads a command economy?

• A. A king.

• B. A dictator.

• C. A president.

• D. A prime minister.

What does the central authority do in a command economy?

• A. Makes major decisions about what, how, and for whom to produce.

• B. Makes minor decisions about what, how, and for whom to produce.

• C. Makes major decisions about where to produce.

• D. Makes minor decisions about where to produce.

What are the advantages of a command economy?

• A. It can change direction drastically.

• B. Many health/public services are available to everyone at little/no cost.

• C. It ignores basic wants/needs of consumers.

• D. It gives people incentive to fill their quotas instead of producing a good product.

What are the disadvantages of a command economy?

• A. They ignore basic wants/needs of consumers.

• B. The system gives people incentive to fill their quotas instead of producing a good product.

• C. Requires large decision-making bureaucracy.

• D. None of the above