Economics: UNIT: COMPARATIVE ECONOMIC SYSTEMS

What type of economic system are you a part of? In a short paragraph, explain how your economic system regulates choices to respond to economic challenges.

Sample Response: The economic system of the country that I live in is a mixed-market economy. My government maintains this economic system by allowing citizens to make many economic choices. The government responds to economic issues by attempting to provide more opportunities for citizens. Examples include lowering taxes to allow more funding for hiring new workers, or increasing education to help reduce the wealth gap.

Which situation is the best example of competition in an economic system? A restaurant just opened down the block from a movie theater, and the restaurant owner hopes to attract diners after each movie. A small CD store slashed its prices to attract customers from a larger store that sells CDs and DVDs. A store that sells sneakers has offered a special deal to customers from a nearby health club. A federal agency has been created to monitor the production and distribution of food supplements.

✔ A small CD store slashed its prices to attract customers from a larger store that sells CDs and DVDs.

Which government regulations could you avoid if you no longer had employees? Check all that apply. Every business must maintain a business license. Businesses must pay taxes on employee salaries. Businesses must advertise truthfully. Businesses must pay employees a fair wage. Businesses must maintain workplace safety.

✔ Businesses must pay taxes on employee salaries. and ✔ Businesses must pay employees a fair wage.

What is one way a command economy affects the lives of private citizens? Citizens cannot make most economic decisions. Citizens can only work in factories or on farms. Citizens must pay for their own health care. Citizens have limited access to education.

✔ Citizens cannot make most economic decisions.

Which situation best reflects the concept of free enterprise? Consumers have a choice between two bakeries in a single city block. An agency determines which supplements are safe for people to buy. Local officials set the prices for all the gas stations in a community. The government decides the minimum wage for all airline workers.

✔ Consumers have a choice between two bakeries in a single city block.

How does the use of new technology in industry benefit consumers more so than producers? Consumers can allocate their resources wisely. Consumers have greater access to information. Consumers can use materials from anywhere. Consumers can ship goods around the world.

✔ Consumers have greater access to information.

What is one downside for consumers to competition in a free-enterprise system? Consumers must be knowledgeable. Consumers have limited choices. The quality of goods often suffers. The price of goods often decreases.

✔ Consumers must be knowledgeable.

What is one way that technology can improve the distribution of goods? Workers can take Internet classes to gain new skills. Automation can create goods more cheaply and easily. Businesses can hire factory workers across the world. Container ships can transport a number of goods at once.

✔ Container ships can transport a number of goods at once.

What is the best definition of economic data? Economic data is information used for calculation, analysis, or planning. Economic data is the fastest time it takes to use the fewest resources. Economic data is knowledge that can be applied to create solutions. Economic data is a determination based on patterns and evidence.

✔ Economic data is information used for calculation, analysis, or planning.

________________ is the act of working in exchange for an income.

✔ Employment

Which choices will help you cut back on expenses so that you can spend more money on promotions or advertising? Check all that apply. Move to a higher-rent building. Use less-expensive ingredients. Look for discounted or used machines. Hire a young employee at minimum wage. Hire a manager to help the business grow.

✔ Use less-expensive ingredients., ✔ Look for discounted or used machines., and ✔ Hire a young employee at minimum wage.

How can the use of new technology in industry benefit workers? Workers can react to economic change quickly. Workers can identify economic emergencies. Workers can gain new knowledge and skills. Workers can make economic forecasts.

✔ Workers can gain new knowledge and skills.

Ivan works for an automobile factory that exports cars around the world. The government manages the factory, and he lives in housing provided by the city. Ivan most likely lives in a closed economy with limited government regulation. a pure market economy with no government regulation. a command economy with heavy government regulation. a mixed market economy with some government regulation.

✔ a command economy with heavy government regulation.

What type of market is illustrated by this pie chart? a closed economy a traditional economy a command economy a mixed market economy

✔ a mixed market economy

Using information from the lesson, explain how new technologies change your experience as a consumer. Provide your answer in the form of a complete paragraph.

Sample Answer: Technological improvements allow me to have greater access to goods around the world. I can buy instantly and communicate instantly with producers. Technology can also help me to monitor economic trends, both in my country and in my own life. In summary, technology helps to give me more freedom to make economic choices.

Read the paragraph below, and then decide which type of economy is being described. In this economy, community members typically use simple tools to plant and harvest crops. Food supplies are supplemented by hunting animals and gathering plant materials. Members trade with each other to obtain needed goods, as few people hold currency. Little economic growth occurs. What type of economy is being described? a traditional economy a free market economy a mixed-market economy a command economy

✔ a traditional economy

What percentage of wealth belonged to the wealthiest 1 percent of US citizens in 2010? about 53 percent about 35 percent about 11 percent about 42 percent

✔ about 35 percent

This graph shows the division of wealth in the United States in 2010. Based on this graph, how much wealth did the top 20 percent of the population hold? about 35 percent about 55 percent about 80 percent about 90 percent

✔ about 90 percent

The government of country A has determined there is a coal shortage based on mining reports. As a result of these data, the government decreases coal exports to other nations. Access to information helped country A allocate resources. limit consumption. purchase goods. increase sales.

✔ allocate resources.

From 1981 to 2001, which change was most likely happening in the US economy? a decrease in spending by consumers an increase in the number of workers an increase in spending by consumers an increase in government intervention in the economy

✔ an increase in spending by consumers

In a mixed market economy, property owned by the government can be used by many citizens. can cause economic inequality. can help promote personal wealth. can be used for private businesses.

✔ can be used by many citizens.

In a mixed market economy, property owned by an individual can be used by all citizens. can be run by a city or state. can help promote personal wealth. can be used by government workers.

✔ can help promote personal wealth.

A pure market economy is sometimes called pure command economy. socialism. communism. capitalism.

✔ capitalism.

In which type of market would you find it the most difficult to buy goods from another country? pure market economy closed economy traditional economy mixed market economy

✔ closed economy

The government has the right to own all land, buildings, and factories in a closed economy. command economy. mixed market economy. pure market economy.

✔ command economy

Which economic system is supported by this passage's main argument? mixed market economy traditional economy closed economy command economy

✔ command economy

Use the drop-down menu to complete each sentence. A ________________ economy usually stresses the equality of all citizens. A __________________ economy aims to be self-sufficient. A __________________ economy relies more on bartering than money. In a __________________ economy, private businesses are encouraged.

✔ command, ✔ closed, ✔ traditional, and ✔ mixed market

A command economy tends to exist under a democratic government that provides little regulation. socialist government that provides some regulation. representative government that provides no regulation. communist government that provides a lot of regulation.

✔ communist government that provides a lot of regulation.

The goal of a command economy is to sustain self-sufficiency. preserve traditional customs. create equality within a society. promote free economic choices.

✔ create equality within a society.

Innovation allows producers to create goods that draw consumer attention. follow restrictions that the government imposes. avoid competing with similar businesses. offer warranties for all of their products.

✔ create goods that draw consumer attention.

In a competitive market, an electronics company releases a smartphone that is much faster than older models. This is an example of following a federal regulation. lowering prices for customers. reducing the risk for consumers. creating an innovative product.

✔ creating an innovative product.

What are some ways to address unemployment in a market economy? Select three answers. creating new projects increasing regulation lowering restrictions raising more taxes promoting hiring

✔ creating new projects, ✔ lowering restrictions, and ✔ promoting hiring

Technology can help governments handle economic emergencies, such as the reliance on automation. crop and resource shortages. the fall of the unemployment rate. instant sales and communication.

✔ crop and resource shortages.

Economists make economic predictions using: educated guesses based solely on their opinion. data about the economy from the past. information only about other nations. data about how outside economies allocate their resources.

✔ data about the economy from the past.

Identify each statement as an advantage or disadvantage of automation. ____________________ Can be expensive to set up ____________________ Can help to create lower prices for manufactured goods ____________________ May cause fewer mistakes in the manufacturing process

✔ disadvantage, ✔ advantage, and ✔ advantage

One negative consequence of using automation to improve manufacturing production is that factories often need fewer workers. production will often slow down. costs often rise for producers. prices often increase for consumers.

✔ factories often need fewer workers.

"Everyone's rights should be protected" is an argument for competition. against competition. for regulation. against regulation.

✔ for regulation.

Which group creates regulations in mixed-market economies? consumers governments monopolies producers

✔ governments

Use the drop-down menu to complete each statement. The amount of money you earn by working is your The percentage of people actively looking for a job is called

✔ income and ✔ unemployment.

In a mixed market economy, who makes most of the daily economic decisions? an economic expert an elected leader individual citizens the military

✔ individual citizens

This graph shows the US unemployment rate from August 2010 to November 2011. This graph could help the US government allocate natural resources. limit production nationwide. make an economic prediction. address a shortage emergency.

✔ make an economic prediction.

In the free-enterprise system of the United States, the government makes no economic decisions. makes some economic decisions. makes most economic decisions. makes all economic decisions.

✔ makes some economic decisions.

The citizens of the United States live and work in a closed economy. command economy. mixed market economy. pure market economy.

✔ mixed market economy.

When compared to a mixed-market economy, a command economy typically has more private ownership. more government control over production. strong consumer-buying power. a greater chance for a high income.

✔ more government control over production.

Private property is land or goods owned by the government. owned by an individual. used by state officials. used for taxation.

✔ owned by an individual.

Use the drop-down menu to complete each statement. The property in a mixed market economy likely is Most of the property in command economies is owned by The citizens of a command economy are ___________ likely to own property than citizens of a mixed-market economy.

✔ private and public, ✔ governments, and ✔ less.

The goal of a market economy is to sustain self-sufficiency. preserve traditional customs. create equality within a society. promote free economic choices.

✔ promote free economic choices.

This photo shows a label that appears on food products in the United States. This label is an example of producer innovation in a market economy. freedom in the free-enterprise system. regulation by a government agency. competition between businesses.

✔ regulation by a government agency.

This graph shows the changing unemployment rate in the United States. From 2001 to 2011, unemployment in the United States stayed the same. slightly changed. sharply increased. sharply decreased.

✔ sharply increased.

New technology in ______________ allows producers to use materials from all over the world to manufacture goods.

✔ shipping

In free-enterprise systems around the world, there are no restrictions on business ownership or business activity. some restrictions on business activity but not on business ownership. some restrictions on business ownership but not on business activity. some restrictions on business ownership and business activity.

✔ some restrictions on business ownership and business activity.

Mixed-market economies have more private property, while command economies have more public property. Which is the best example of public property in a mixed-market economy? cars homes streets and roads restaurants and shops

✔ streets and roads

Many people prefer to shop online instead of in traditional retail settings. What are the advantages of purchasing goods online? Check all that apply. faster delivery the ability to find cheaper prices than many stores in person the convenience of receiving an item without going to a store the ability to research an item before making a purchase the ability to test an item in person

✔ the ability to find cheaper prices than many stores in person, ✔ the convenience of receiving an item without going to a store, and ✔ the ability to research an item before making a purchase

Which is an example of regulation in the automobile industry? the creation of fuel-efficiency standards for cars the installation of satellite radio systems in some cars the usage of multiple-year warranties to cover repairs the production of hybrid models that conserve gasoline

✔ the creation of fuel-efficiency standards for cars

In a command economy, a cotton farm floods after a heavy storm. The repair work most likely will be paid by the private business that operates the farm. the government group that runs the farm. the individual who manages the farm. the family who owns the farm.

✔ the government group that runs the farm.

How do economists use data? Choose two answers. to follow and predict unemployment rates to communicate with customers instantly to ship goods to countries all over the world to explain trends in production and shipping to apply automation to reduce production costs

✔ to follow and predict unemployment rates and ✔ to explain trends in production and shipping

Which type of market is the least likely to have an official currency? closed economy command economy traditional economy mixed market economy

✔ traditional economy

Producers can generate instant sales by using devices. forecasts. patterns. websites.

✔ websites.

In a free-enterprise system, consumers decide how to set prices. which goods to export. which services to buy. how to use materials.

✔ which services to buy.

This graph shows the US unemployment rate from August 2010 to November 2011. This graph suggests unemployment in the United States will continue to fall. will continue to rise. will remain the same. will only change a little.

✔ will continue to rise.

Write a paragraph about your business, how you plan to compete with the other local frozen-yogurt shop, and why your action plan will work. Use what you have learned in this lesson to support your plan.

Sample Response: By not hiring another employee, I will have to follow fewer government laws. Not having an additional employee will help keep my production costs down and allow me to sell my product for less. I will also ensure that all consumers know the ingredients of my yogurt. My strategies for competing with the other frozen-yogurt shop will work because lower prices will attract consumers. By advertising that our ingredients are natural, consumers will return.

To begin your plan, you will need to know about your competition and decide how you will attempt to compete. Your competitor is called Create Your Own Yogurt, and it uses artificial flavors that customers use to create their own yogurt. In the lesson, you learned about three techniques businesses can use to compete with one another. In two to three sentences, explain how you will address each area of competition to help make your business successful against this competitor.

Sample Response: First, I will focus on lowering prices. I will do this by making sure my costs to run the business are low, and I will start by running the shop myself. I will create a better product by using healthier, better ingredients to attract more customers. Finally, I will be innovative by offering ingredients that aren't sold anywhere else.

The next step in your plan is to identify which government regulations will impact your business. In two to three sentences, describe what those regulations are and how you plan to meet them.

Sample Response: We must both pass serious health inspections made by the local government and advertise what we use to make our yogurt.

Compare and contrast the goals of command and mixed market economies. Why are there many more mixed market economies than command economies in the world today? Give your answer in the form of a short paragraph.

Sample response: Mixed market economies focus on preserving as much freedom to make economic choices as possible. Governments in these economies have limited involvement in managing and regulating the economy. In contrast, command economies are focused most on preserving and requiring equal opportunities, which means governments that greatly regulate the economy. More economic systems are geared toward offering producers and consumers the freedom to make economic choices, so mixed market economies are more common in the world today.

Which choices are most likely to help you beat your competition by gaining more customers and selling more frozen yogurt? Check all that apply. Invent a new flavor, combination, or topping. Do less advertising. Place coupons online or in circulars. Sell shirts, hats, or other merchandise bearing the company's logo. Provide as little nutritional information as possible. Offer a loyalty program that gives customers free frozen yogurt.

✔ Invent a new flavor, combination, or topping., ✔ Place coupons online or in circulars., ✔ Sell shirts, hats, or other merchandise bearing the company's logo., and ✔ Offer a loyalty program that gives customers free frozen yogurt.

What is one counter-argument to the premise that the wealth gap is a serious problem which needs to be addressed? The lower classes have the opportunity to invest. Poor people can easily move into the middle class. Investments by the upper class create lower-class jobs. Buying power sharply increases for the working class.

✔ Investments by the upper class create lower-class jobs.

Which nation has a communist command economy? Norway North Korea South Korea the United States

✔ North Korea

What are some benefits to private ownership? Select three answers. Private ownership provides offices for government workers. Private ownership provides land or goods for all citizens to use. Private ownership can make it possible for a business to earn money. Private ownership might help a person move to another economic class. Private ownership allows a person to own goods that may increase in value.

✔ Private ownership can make it possible for a business to earn money., ✔ Private ownership might help a person move to another economic class., and ✔ Private ownership allows a person to own goods that may increase in value.

Which statement best describes a mixed market economy? Consumer intervention in economic choices is strictly forbidden. The government determines economic choices and makes most decisions. The decisions made by producers and consumers drive all economic choices. Producers and consumers make some economic choices while the government makes others.

✔ Producers and consumers make some economic choices while the government makes others.

How does the use of new technology in industry benefit producers more so than consumers? Producers can purchase services online. Producers can buy goods 24 hours a day. Producers can instantly contact companies. Producers can quickly transport global goods.

✔ Producers can quickly transport global goods.

In a republic, elected officials create laws to regulate the economy. T F

✔ T

Which conclusion is best supported by the data in the graph? Technology is a small part of the US economy. Technology is a growing part of the US economy. Technology is a declining part of the US economy. Technology is the largest sector in the US economy.

✔ Technology is a growing part of the US economy.

Transportation technology ___________________ has improved access to information. ___________________ has created faster production times for many goods. Over the years, technologies such as _______ have allowed for faster distribution.

✔ The Internet, ✔ Automation, and ✔ airplanes

In 1776, an economics book titled ___________________ was published to promote the concept of free enterprise.

✔ The Wealth of Nations

Which statement best describes a pure market economy? Producer intervention in economic choices is strictly forbidden. The government determines economic choices and makes most decisions. The decisions made by producers and consumers drive all economic choices. Producers and consumers make some economic choices while the government makes others.

✔ The decisions made by producers and consumers drive all economic choices.

This graph shows the changing unemployment rate in the United States. Based on this graph, what can be concluded about the economy between 1991 and 2008? The economy was getting stronger because unemployment was low. The economy was getting stronger because too many manufacturing jobs were available. The economy was getting weaker because employment was low. The economy was getting weaker because stagflation was occuring.

✔ The economy was getting stronger because unemployment was low.

What is one characteristic of a command economy? Citizens are responsible for providing their own health care. Citizens can easily start their own businesses. The government controls the prices of most goods. The government prohibits the use of money.

✔ The government controls the prices of most goods.

What restriction would the government impose in a closed economy? The government would prohibit trade with other nations. The government would set the prices for imported goods. The government would preserve traditional customs only. The government would prevent private ownership of property.

✔ The government would prohibit trade with other nations.

What are aspects of a free-enterprise system? Check all that apply. Private ownership of property is severely restricted. The government has a lot of power and influence. There are few limits on the use of private property. Consumers make all of their economic choices. Producers make all of their economic choices.

✔ There are few limits on the use of private property., ✔ Consumers make all of their economic choices., and ✔ Producers make all of their economic choices.

What are the cons of a mixed market economy for most citizens? CHECK ALL THAT APPLY. There may be a sizable gap between rich and poor people. It can be very difficult for citizens to start private businesses. Citizens must pay for most basic necessities by themselves. There is no guarantee of steady employment for many citizens. Citizens may pay higher taxes than in other economic systems. Citizens often purchase their own health care and higher education.

✔ There may be a sizable gap between rich and poor people., ✔ Citizens must pay for most basic necessities by themselves., ✔ There is no guarantee of steady employment for many citizens., and ✔ Citizens often purchase their own health care and higher education.

What role do government agencies play in a mixed market economy? They run shipping companies and other sources of distribution. They own farms, factories, and other sources of production. They regulate some aspects of production and distribution. They employ most of the workers in the economic system.

✔ They regulate some aspects of production and distribution.