The Economic Problem Flashcards
1
Q
What are the three economic questions?
A
- What should be produced?
- How to produce?
- Who receives what is produced?
2
Q
Name the different types of economics.
A
Command economy, free-market economy, and mixed economy.
3
Q
Which types of economies exist in the real world?
A
Only mixed economies. Pure command or pure free market economies do not exist in the real world.
4
Q
Which economy uses central planning to answer the three economic questions?
A
Command economies.
5
Q
The Soviet Union and North Korea are examples of…
A
Command economies.
6
Q
Do command economies take advantage of Comparative Advantage Theory?
A
No.
7
Q
What are the major theories of economics?
A
- Theory of Mercantilism
- Theory of Absolute Advantage
- Theory of Comparative Advantage
8
Q
Who proposed the theory of absolute advantage?
A
Adam Smith.
9
Q
Who proposed the theory of comparative advantage?
A
David Ricardo.
10
Q
What type of economy is the simplest?
A
A one-person economy.
