Topic 2 (Part 1) Test_English_SH

Organize these options into the right categories

Groups:

(a) Traditional Economy

,

(b) Free Market Economy

,

(c) Centrally Planned Economy

,

(d) Mixed Economy

• Characteristic: the government owns all factors of production and decides how to use them.

• Characteristic: governments try to make sure that exchanges in the marketplace are fair.

• Advantage: consumer sovereignty

• Advantage: economic efficiency

• Characteristic: the government creates laws to make the plan happen.

• Characteristic: governments can help protect intellectual or private property.

• Characteristic: the government collects taxes from firms and households.

• Characteristic: the government creates a central economic plan.

• Advantage: economic growth

• Characteristic: they do not have protection for natural disasters.

• Advantage: economic freedom

• Disadvantage: Economic freedom is taken away because the government makes all of the decisions.

• Characteristic: has some government involvement to make sure everyone receive basic needs.

• Characteristic: work is divided by gender lines.

• Characteristic: they are slow to adopt new ideas and change.

• Characteristic: communities are small and work to support the entire community.

Which one of these is NOT one of the three key economic questions?

• What goods and services should be produced?

• How should these goods and services be produced?

• Who consumes the goods and services?

• Why are the goods and services produced?

Match each of the following vocabulary terms with the correct definitions.

• Specialization

• The way a society decides to use resources to make and distribute goods and services.

• Competition

• Businesses fighting each other for customers to spend money with them.

• Market

• Focusing on one or a few things, so that you can do that thing very well.

• Economic System

• Any place where a buyer and seller can exchange things.

• Incentive

• Motivating someone to do something by rewarding them or not punishing them.

Match each of the following economic goal with its description.

• Equity

• People want an economy that will make sure that they can get the goods and services that they need and want.

• Security

• Societies should also help make sure that everyone has a fair chance to get all of their needs and wants.

• Efficiency

• People like to be able to choose whatever they can and want to buy.

• Freedom

• Societies must maximize their resources because resources are limited/scarce.

• Growth

• To make people's lives better, a society must show growth and innovate (bring new ideas and products to use).

Which one of these is NOT another name for a free market economy?

• Free Enterprise

• Capitalism

• Command Economy

Pick the option that BEST answers the question: Why do markets exist?

• Markets exist so people do not need to know how to make everything they need or want.

• Markets exist so people can shop for food.

• Markets exist so people can bring things they make to sell them and make money.

• Markets exist so people can have somewhere to go when they have nothing to do.

When businesses compete by offering higher quality goods than their competition, this is known as...

• Price competition

• Non-price competition

Match the following

• Communism

• A form of government that limits freedom and is strict on citizens.

• Authoritarian

• The founder of Communism and believed that labor was the most valuable.

• Karl Marx

• An economic and political system based on the idea that wealth should be given to everyone evenly.

• Socialism

• A political system where the government owns and controls all resources and makes all of the decisions.

What is another name for a centrally planned economy?

• Command economy

• Free market economy

• Traditional economy

• Mixed economy

Match the following

• Private Property

• Creations, such as books, songs, or symbols, that consist of ideas and not physical objects

• Laissez Faire

• The idea that the government generally should not interfere in the marketplace.

• Intellectual Property

• Property that is owned by individuals or companies, not by the government or the people as a whole.