LS6 - Types of Economy

Question 1

Planning

Answer 1

The process in which the government allocates resources. Planning is funded through tax

Question 2

Three types of economy

Answer 2

-Free Market
-Mixed Economy
-Command Economy

Question 3

The price mechanism

Answer 3

Where demand and supply determines prices of goods

Question 4

Command Economy Advantages and Disadvantages

Answer 4

Advantages
- Prevents Monopolies from existing
- Maximises Welfare
- Low unemployment
Disadvantage
- No profit incentive so generally less efficient
- Consumers have less choice

Question 5

Free Market Economies Advantages and Disadvantages

Answer 5

Advantages
- Profit incentive meaning it can drive innovation and more efficient economy
- There is the ability for Enterprise
Disadvantages
- Inequality within markets
- Low Profit goods like Drugs and Medicines aren’t Made

Question 6

Free Market Economies Advantages and Disadvantages

Answer 6

Advantages
- Profit incentive meaning it can drive innovation and more efficient economy
- There is the ability for Enterprise
Disadvantages
- Inequality within markets
- Low Profit goods like Drugs and Medicines aren’t Made

Question 7

Efficiency

Answer 7

A measure of production and optimal allocation of resources

Question 8

State

Answer 8

The state is made up of
-Government
-Teritory
-Citizens
The difference between the state and the government is that the state is permanent but the government isn’t. The state is made up of Territory and Citizens but the Government isn’t