Types of Economies Flashcards
Define Capitalism
Private ownership of resources
Name 3 countries that are Command Economies
China
North Korea
Cuba
Name 3 characteristics of a Command Economy
Gov. makes most decisions and owns factors of production
Most limit private property rights
gov. officials favor themselves when making decisions
Whats the advantages of a Mixed Economy
Provides some help to needy
Democracy voters can use their electoral power to affect the WHAT, HOW and WHOM, decisions even if gov. owns no productive resources
Whats and Example of a Market Economy
USA
Singapore
Hong Kong
New Zealand
What are the characteristics of a Free Market Economy?
People make decisions in their best interest
Private ownership of resources(Capitalism)
Focuses on where the goods & services are exchanged.
Imma give you an easy one…
How many types of Economies are there?
3 cuz, -_-
Command
Free Market
Mixed
Whats the characteristics of a Mixed Economy?
In SOME mixed economies Govs. intervene
Govs. control key industries in others
Whats an advantage of a Command Economy?
Can change drastically, (former Soviet Union went form Ag.- industrial in a decade)
Many public services are available at little or no cost, including ed., health care, and public services
Whats an example of a Mixed Economy
China
Norway
Cuba
North Korea( sim. to Soviet Union)
Whats a disadvantage of a Free Market Economy?
Doesn’t provide for everyone
Doesn’t provide all basic goods and services
High degree of uncertainty
Whats an example of a Command Economy?
Few Countries left
Soviet Union: State planning Commision determined needs, set goals and established production quotas for major industries
Cuba
North Korea
Whats the disadvantages of a Command Economy
Ignore basic wants and demands of the consumer
System gives people the incentive to fill their quotas instead of producing a good product.
Large bureaucracy
Planning bureaucracy lacks flexibility to deal with day to day probs.
Whats the disadvantages of a Mixed Economy?
Generally higher taxes are the trade off
Services may be limited or quality is poor
Communism& Socialism have proved to be less efficient.
What are the advantages of a MARKET Economy?
High degree of individual freedom
Adjusts to consumer demand
Small degree of gov. interference
High consumer satisfaction
What are the disadvantages of a Mixed economy?
Generally higher taxes
Services may be limited or quality is poor
Socialism and Communism have proved to be less efficient
You’re doin pretty good
Keep it up
What role do entrepreneurs play in the economy?
People who take economic risk &Combine factors of production
Whats an example of a division of labor?
Nurse
Doctor
Surgeon
What does it mean if a point is ABOVE the production curve?
Production not feisible with the existing resources
What does it mean if a point is BELOW the production curve?
No enough resources to produce that product
What’s the 6 Economic Goals?
Economic Freedom
Economic Growth
Economic Efficiency
Economic Security
Economic Stability
Economic Equity
In a traditional economy, how is the decision made of “What to produce?”
By the way things have been done for thousands of years
Why do we have different economies?
Diff. social goals
