1. what is an economic system?
an economic system is the method used by a society to produce and distribute goods and services.
2. How do a traditional economy, a market economy, a command economy, and a mixed economy differ?
Each system reflects a different prioritization of economic goals. It also reflects the values of the societies in which these systems are present.
3. Why aren’t all people paid the same amount in factor payments for the resources they provide? Provide your own example if two unequal factor payments.
Distribution is determined by how societies choose to distribute income.
4. Why do governments provide safety nets for their citizens?
It helps protect people experiencing unfavorable economic conditions.
5. give at least one example of traditional, a command and a market economic system.
Section 2 assessment
1. How does specialization make us more efficient?
Specialization leads to efficient use of resources, including capital, land, an labor. It is easier to learn one task or a few tasks very well than to learn them all.
2. What is the difference between the factor market and the product market?
Factor market is market in which films purchase the factors of production from households and product market is the market in which households purchase the goods and services that firm produce.
3. What is profit?
Profit is the financial gain made in a transaction.
4. What are the roles of households and firms in a market economy?
Household is a person or group of people living in the same residence. Households own the factors of production land, labor, and capital. Households are also consumers if goods and services firm is an organization that uses resources to produce a product, then it sells. Firms transform inputs factor of production, into outputs or products.
5. How does competition among firms benefit consumers?
6. Explain what Adam Smith meant...