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  • Economic Systems (2.1) : of The Three Key Economic Questions That Every Society Must

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    This document discusses different economic systems and how they answer the three key economic questions of what to produce, how to produce it, and who gets it. A traditional economy answers these questions through customs and traditions, with advantages of social cohesion but disadvantages of inflexibility. A command economy centrally plans and directs economic activity, with the advantage of control but disadvantage of reduced choice. A market economy uses supply and demand to determine production and allocation, with advantages of flexibility and innovation but disadvantages of uneven outcomes and boom/bust cycles.

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    This document discusses different economic systems and how they answer the three key economic questions of what to produce, how to produce it, and who gets it. A traditional economy answers these questions through customs and traditions, with advantages of social cohesion but disadvantages of inflexibility. A command economy centrally plans and directs economic activity, with the advantage of control but disadvantage of reduced choice. A market economy uses supply and demand to determine production and allocation, with advantages of flexibility and innovation but disadvantages of uneven outcomes and boom/bust cycles.

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    8 views1 page

    Economic Systems (2.1) : of The Three Key Economic Questions That Every Society Must

    Uploaded by

    Ashley
    This document discusses different economic systems and how they answer the three key economic questions of what to produce, how to produce it, and who gets it. A traditional economy answers these questions through customs and traditions, with advantages of social cohesion but disadvantages of inflexibility. A command economy centrally plans and directs economic activity, with the advantage of control but disadvantage of reduced choice. A market economy uses supply and demand to determine production and allocation, with advantages of flexibility and innovation but disadvantages of uneven outcomes and boom/bust cycles.

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    of 1

    ECONOMIC SYSTEMS (2.

    1)
    Use pages 38-46 in your textbook to answer the following questions.

    DEFINITIONS/VOCAB: Traditional Economy, Economic Systems,


    Command Economy, Socialism, Market Economy, Market, Capitalism

    1. From Chapter 1, please make sure you re-list and describe each
    of the three key economic questions that every society must
    answer.
    2. Describe key characteristics of a TRADITIONAL ECONOMY (in
    other words, how does a traditional economy answer each of the
    three economic questions?).
    3. What are the key advantages of a system based on tradition?
    4. What are the key disadvantages of a system based on tradition?
    5. How does a COMMAND SYSTEM answer the three economic
    questions?
    6. What are the key advantages of a system based on command?
    7. What are the key disadvantages of a system based on command?
    8. How does a MARKET ECONOMY attempt to answer the three
    economic questions?
    9. What are the main advantages of a system based on markets?
    10. What are the main disadvantages of a system based on
    markets?

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