Types of Economies

Question 1

What to Produce: Planned

Answer 1

Planners/government decide what to be produced - May give directions to factories/firms controlled by the state.

Question 2

How to Produce: Planned

Answer 2

Planners direct resources into producing units. Factories/firms are given resources that are planned and worked out would be necessary to produce the output.

Question 3

Whom to produce: Planned

Answer 3

Planner tries to be fair in distributing the output of the economy.

Question 4

Advantages: Planned

Answer 4

Equal distribution of services.
Little unemployment and wage allows people to buy essentials.
Few homeless and less waste.

Question 5

Disadvantages: Planned

Answer 5

Unlikely to make correct decisions
Enough essential goods
People don’t work as hard

Question 6

What to produce: Market

Answer 6

Supply and demand. Decisions made by firms/people, no government involvement. Increase demand, increase price. More resources into production.

Question 7

How to Produce: Market

Answer 7

Resources privately gathered, industries are are private.

Cheap labour/resources from 3rd world countries.

Question 8

Whom to Produce: Market

Answer 8

Produce is decided by consumer. Supply and demand - what will get most money.

Question 9

Advantages: Market

Answer 9

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