U2L7. Mastery Check

Which point on the diagram BEST represents an economy based on communism?

• Point A

• Point B

• Point C

• Point D

Answer explanation

Point D represents an economy based on communism because it is characterized by state ownership of the means of production, which is a key feature of communist economies.

Which point on the diagram BEST represents an economy based on free enterprise?

• Point A

• Point B

• Point C

• Point D

Answer explanation

Point A represents an economy based on free enterprise because it is characterized by private ownership of businesses and minimal government intervention.

In a communist economic system, such as that of the former Soviet Union, economic decisions are primarily made by —

• the central government

• consumers and producers

• traditional indigenous leaders

• the owners of major industries

Answer explanation

In a communist economic system like the former Soviet Union, economic decisions are primarily made by the central government.

Which of the following is an example of a traditional economy?

• The government makes all economic decisions and controls the means of production.

• Individuals and businesses make economic decisions based on supply and demand.

• The means of production are collectively owned and evenly distributed among the population.

• Economic decisions are based on customs, traditions, and cultural norms.

Answer explanation

Economic decisions are based on customs, traditions, and cultural norms.

Which of the following statements best describes a command economy?

• Economic decisions are based on customs, traditions, and cultural norms.

• Individuals and businesses make economic decisions based on supply and demand.

• The government makes all economic decisions and controls the means of production.

• The means of production are collectively owned and evenly distributed among the population.

Answer explanation

The government makes all economic decisions and controls the means of production.

Which of the following statements best describes a market economy?

• Economic decisions are made by the government and prices are set based on the needs of the society.

• Economic decisions are made by individuals and businesses based on supply and demand in the market.

• Economic decisions are made by a group of individuals who collectively own and distribute the means of production.

• Economic decisions are made based on customs, traditions, and cultural norms.

Answer explanation

Economic decisions are made by individuals and businesses based on supply and demand in the market.

Which of the following is NOT a form of economics?

• Traditional economy

• Command economy

• Market economy

• Democratic economy

Answer explanation

Democratic economy is NOT a form of economics as it does not refer to an economic system, unlike traditional, command, and market economies.

Which BEST completes the diagram?

• Lowering of prices through competition

• Encouragement of new business methods

• Protection of the right to own private property

• Government control of the distribution of goods

Answer explanation

The correct choice is government control of the distribution of goods as it best completes the diagram by showing a form of economic regulation.

Which of the following best completes this illustration?

• Free Enterprise System

• Mercantile System

• Federalism

• Republicanism

Answer explanation

The Free Enterprise System best completes the illustration as it promotes economic competition and private ownership of businesses, aligning with the depicted scenario.

Determine whether the statement describes a free enterprise economy or a socialist economy.

Select the correct answer in each row.

Groups:

(a) Free Enterprise Economy

,

(b) Command Economy

• minimal government regulation

• factors of production controlled by the government

• individuals own most of the resources

• government sets pricing of items

• supply and demand determines market price