CHT 2: OUR ECONOMIC SYSTEMS
NAME:
OS1
REVIEW YOUR READING
PERIOD
DATE:
RYR: PP. 26-27
1.
What are the three key economic questions that every society must
answer to set up an economic system?
1—What goods and services are to be produced?
2—How should the goods and services be produced?
3—For whom should the goods and services be produced?
2.
What are the major characteristics of the three types of economic
systems?
Custom-based economy—
Things are produced in the same way they have always been
produced
Directed or planned economyThe government owns and controls the economic resources and
makes all of the decisions regarding the production of goods and
services
Market economy—
Most economic resources are privately owned and decisions about
production are largely made by free exchange in the marketplace.
3.
Who owns and controls most economic resources in a system of
capitalism?
The ownership and control of economic resources is in the hands of
individuals, owners and managers of businesses, farmers, and citizens
who own property.
OS1 2002-2003
Mrs. Karri Cameron
ECONOMY CHT 2: OUR ECONOMIC SYSTEM
Page 1
CHT 2: OUR ECONOMIC SYSTEMS
OS1
REVIEW YOUR READING
NAME:
PERIOD
4.
What are the five features of our market economy?
DATE:
1—Private enterprise
2—Private property
3—Profit
4—Competition
5—Freedom of choice
5.
What does the right to earn a profit influence a business owner to
do?
Profit is the difference between the selling price of a good or
service and the cost of doing business.
Business owners work harder
and are more creative when they can keep the increased profits
resulting from their extra efforts.
6.
What does the right of private property entitle the owner to do?
The right of private property gives the owner the right to own, use,
and dispose of things of value.
7.
Give three ways in which consumers benefit from competition among
businesses:
1—Lower prices
2—Higher quality
3—Improved services
4—New products
8.
In addition to the profit motive, give two other reasons that might
encourage people to invest their time, money, and energy in operating
their own business:
1—They feel personal satisfaction and pride
2—They get pleasure from producing goods and services that make
people happy
OS1 2002-2003
Mrs. Karri Cameron
ECONOMY CHT 2: OUR ECONOMIC SYSTEM
Page 2
CHT 2: OUR ECONOMIC SYSTEMS
OS1
REVIEW YOUR READING
NAME:
PERIOD
DATE:
9.
In addition to private property and private enterprise, what are four
other rights that are included in our economic freedom of choice?
1—The right to buy where and what you please
2—The right as a worker to organize with other workers
3—The right to travel when and where you please
4—The right to express your opinion
10.
Explain the nature of a mixed economy:
A mixed economy is one that combines some of the features of two or
more economic systems.
Such a system is usually known by the name of the system whose
features are dominant.
11.
What are some reasons why market economies are becoming popular
around the world?
Market economies have prospered because of the success of these
economies in satisfying the needs and wants of the consumer.
In controlled economies, workers often receive similar wages
regardless of the contribution made to output or productivity.
In a market economy, workers are paid according to their contribution
to output (or for hard work).
OS1 2002-2003
Mrs. Karri Cameron
ECONOMY CHT 2: OUR ECONOMIC SYSTEM
Page 3