Yellow Workbook pages 25-31

What are the 3 Questions that ALL economic systems need to answer?

• What to produce

• How to produce

• For whom to produce

A country's economic system refers to

• whether it is led by a president or a prime minister

• the way in which it produces and distributes goods and services

• the ability of productive resources to make goods and services

• whether or not citizens are allowed to participate in the government process

What are the 3 economic questions that every country's economy must answer?

• how to produce, when to produce, and why to produce?

• What to produce, how to produce, and for whom to produce?

• What is the price, what is the cost, what is the opportunity cost?

In a traditional economy, decisions about what, how and for whom to produce are determined by:

• the government

• cultural traditions

• supply and demand

In a command economy, decisions about what, how and for whom to produce are determined by:

• the government

• cultural traditions

• supply and demand

In a market economy, decisions about what, how and for whom to produce are determined by:

• the government

• cultural traditions

• supply and demand

Organize these options into the right categories

Groups:

(a) Traditional

,

(b) Command

,

(c) Market

• The government is in charge of all the businesses and determines how things will be made

• How people get what is produced: share equally, bartering

• How they produce is based upon traditions with skills passed down between generations

• Producers get to decide how to make the goods

• The government decides who gets the products and how much of the products you can have

• The government has detailed plans about what needs to be made

• What to produce is usually basic necessities done in they way of ancestors

• Consumers decide what goods and services they want and companies answer the demand

• The price of goods and services decides who gets them and how much they can have

Which economic system is found in simple agricultural societies?

• traditional

• command

• market

In which economic system are economic decisions made by the interaction of buyers and sellers?

• traditional

• command

• market

Which economic system is characterized by total government control?

• traditional

• command

• market