1.1.6 Free Market, Mixed And Command Economies Flashcards

1
Q

What is a free market economy?

A

A free market economy is one with no government intervention

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Who advocated a free market economy?

A

Frederick Hayek

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is a Mixed economy?

A

A mixed economy is a free market with some government intervention

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Who advocated a mixed economy?

A

Adam Smith

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Why did Adam Smith believe in some government intervention?

A

He believed that there was a role for government intervention in order to ensure efficient allocation of scarce resources

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is a Command economy?

A

An economy that wants to share the means of production and ownership with all workers in society. Requires the abolition of private property

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Who advocated command economies?

A

Karl max advocated command economies

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What is a command economy ?

A

An economy in which all of the resources are owned by the state and the government controls the distribution of goods/services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is a mixed economy?

A

A blend of the free market and planned economy as individuals, firms and the government own factors of production and distribute goods/services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is a free-market economy?

A

An economy that has no government intervention in the allocation of resources and distribution of goods/services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What are the pros of a free market economy?

A

Profit incentive motivates people, greater variety of goods, competition means better quality, lower prices because of competition, innovation, better standards of living, more efficient use of resources

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What are the cons of a free market economy?

A

Wealth is concentrated in the hands of a few people, increased inequality, Product quality can decrease to increase profits, workers exploited, resource depletion and environmental damage ignored, Monopolies, increased exploitation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What are the pros of a Command economy?

A

Social equality, all workers receive same wage, less unemployment, resources directed to urgent priorities, government owns monopoly businesses

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What are the cons of a command economy?

A

Same wage can disincentivise people, lack of competition means less innovation, lack of efficiency so surpluses or shortages, black markets multiply, access to higher standards of living, personal freedom restricted

How well did you know this?
1
Not at all
2
3
4
5
Perfectly