University:
College of the Holy Cross
Course:
ECON 110 | Principles of Economics
Academic year:

2020
Views:

448

Pages:

2
Author:

Killian Mata

1. How does each type of economy answer the three basic economic questions? (3 points) Command: In a command economy, the government decides which goods and services to produce, how to produce them, and who receives them. Market: In a market economy, each business can decide which products to produce or which services to provide. The business can also decide how the product will be produced. The consumer decides if they want to buy the product or service. Mixed: Mixed economies allow businesses to decide which products they will make and how they will be produced; however, there are government restrictions that regulate their products and production. The consumer decides if they want to buy the product or not. 2. Place each of the economies described on page 3 on the spectrum of economic systems below. (3 points) Market Mixed Command You will now write a brief evaluation of the three economic systems outlined on page 3. Be specific about what aspects of the economy would make living there desirable or undesirable. This section is worth 4 points. 3. Which of the three economies described on page 3 would you most like to live in? Which would you least like to live in? Explain your reasons for each choice. Most like to live in: Explanation: I would prefer to live in a mixed economy with little government regulation. Government regulation allows businesses to compete fairly without exploiting employees. Government regulation also plays a role in protecting the environment. However, these regulations should be as least restrictive as possible. Least like to live in: Explanation: Command economy Total government control is not a good thing. Businesses would not be able to make their own decisions. This would not allow small businesses to compete with large corporations. This means that the consumer can be misled and taken advantage of easily. The businesses would also profit the government, leading them to create regulations that favor large companies and allow them to take advantage of employees.