Chapter 12- Distribution of Economic Resources

Question 1

What is an economy?

Answer 1

An economy is the way in which goods and services are made, sold or used in a country or area.

Question 2

What is the aim of an economy?

Answer 2

The aim of an economy is to make the best use of the limited resources available to them.

Question 3

What is an economic system?

Answer 3

An economic system is the method by which a country shares resources and buys and sells goods and services.

Question 4

What are the three types of economic systems?

Answer 4

Centrally planned economy e.g. Cuba,
Free market economy e.g. USA,
Mixed economy e.g. Ireland.

Question 5

An economic system deals with (4 things):

Answer 5

1- Allocation of scarce resources.
2- Production of goods and services.
3- Distribution of goods and services.
4- The role of government and non-government sectors of the economy.

Question 6

Summarise what a centrally planned economy is:

Answer 6

Where the government makes all decisions about how the country’s economic resources are used.
All businesses are owned and run by the government.
Communism is the most extreme example of such an economy.

Question 7

Summarise what a free market economy is:

Answer 7

Private citizens control resources, own businesses and make all the decisions about how goods and services are produced.
Government has little involvement in how economic resources are used.

Question 8

Summarise what a mixed economy is:

Answer 8

Both government and private citizens have control over economic resources.
Government control essential services for people, e.g. healthcare, education. However, private individuals and businesses also provide services.

Question 9

What is the public sector?

Answer 9

Part of the economy that is owned and controlled by the government.
Provides essential services to the public e.g. health, education.

Question 10

What are the three sectors the public sector is split into?

Answer 10

Local government,
National government,
State-owned organisations.

Question 11

Local government:

Answer 11

Provide a range of public services to a local area.

Question 12

National government:

Answer 12

Government departments that provide a range of services to the country as a whole.

Question 13

State-owned organisations:

Answer 13

Businesses set up by the government. Can be commercial (charges money) or non-commercial (free).

Question 14

Private sector:

Answer 14

Businesses owned by individuals that produce and sell goods and services with the aim of making a profit, e.g. Ryanair, Pennys.

Question 15

What 3 sections is the private sector split in to?

Answer 15

Sole traders,
Partnerships,
Limited companies.

Question 16

Third sector:

Answer 16

Made up of social enterprises and organisations that don’t aim to make a profit, e.g. charities.
These groups work independently of the government and can be referred to as non-governmental organisations (NGOs).

Question 17

Charities:

Answer 17

Set up to benefit others by raising money through various activities like collections, fundraising events, and charity shops.
They depend largely on volunteers.
E.g. Oxfam, Focus Ireland.

Question 18

Voluntary organisations:

Answer 18

Provides services for their members.
Raise money through fundraisers and membership fees.
E.g. St. Patrick’s Donabate GAA Club.

Question 19

Social enterprises:

Answer 19

Have a social or environmental aim.
Run like a business, aim to make a profit to benefit a specific cause, rather than for the owners.
E.g. Donabate Credit Union.