T2

Question 1

What is a Command economy?

Answer 1

(communist) - means of production are publicly owned, economic activity is controlled by a central authority

Question 2

What is a Free market economy?

Answer 2

(capitalistic) - markets determine prices, products, and services rather than the government, business and services are free from government control - driven by private ownership

Question 3

What is a mixed economy?

Answer 3

both gov and private control over the economy

Question 4

pros and cons of a command economy

Answer 4

Pros: Can achieve equality and mobilise resources quickly
Cons: Inefficiencies and lack of innovation

Question 5

pros and cons of a free economy

Answer 5

Pros: Encourages innovation and efficiency, wide range of choices for consumers
Cons: Can lead to economic inequality, may result in market failures

Question 6

Rational for firms

Answer 6

Goal : more profit/ maximising profit

Question 7

Rational for Gov

Answer 7

Goal : improving the well being of society

Question 8

Rational for consumers

Answer 8

Goal : satisfaction from their purchases