1.1.6 Flashcards
1
Q
What’s a free market economy?
A
A system of buying and selling goods and services that is not under the control of the government.
2
Q
Which economist supported a free market economy?
A
Friedrich Hayek.
3
Q
What’s a command economy?
A
Where all resources are owned by the government or central authority, who decides what to produce, how to produce it and who for.
4
Q
Which economist supported a command economy?
A
Karl Marx.
5
Q
What’s a mixed economy?
A
In a mixed system, some factor resources are owned by the public sector and some are owned by the private sector.
6
Q
Which economist came up with a mixed economy?
A
Adam Smith
7
Q
Name 2 pros of a free market economy
A
- More choice
- Entrepreneurship
- Efficiency
8
Q
Name 2 cons of a free market economy economy
A
- Inequalities
- Monopolies
- Goods that provide social welfare may not be made
9
Q
Name 2 pros of a command economy
A
- Maximize welfare
- Low unemployment
- Prevent monopolies
10
Q
Name 2 cons of a command economy
A
- Poor decision making
- Restricted choice
- No risk-taking
- Lower efficiency
