Question

Economic Theories

Use the drop-down menus to indicate the type of economy found in each country.
1. In this country, the government tells an appliance factory that it must produce a minimum of one thousand
refrigerators, People are assigned jobs at the factory based on their abilities, and the government determines
how much they will be paid. The government decides how much a new refrigerator will cost,
2. In this country, an appliance factory produces one thousand dishwashers per month. People want more of its
dishwashers because of their high quality, so the company hires additional workers. The company decides
what the workers' wages will be and how much the dishwashers will sell for. Most of the profits go to the
company's owners,

Answer 1

1. socialist

2. capitalist

Step-by-step explanation:

Answer 2

1. Command economy.

2. Capitalist economy.

Step-by-step explanation:

An economy is a function of how money, means of production and resources (raw materials) are carefully used to facilitate the demands and supply of goods and services to meet the unending needs or requirements of the consumers.

Basically, there are four (4) main types of economy and these are;

I. Mixed economy.

II. Command economy.

III. Traditional economy.

IV. Capitalist economy.

A command economy also referred to as planned economy, can be defined as a type of economy in which the government owns and control the means of production.

Generally, a command economy requires that the quantity of goods, method of exchange, distribution, sales price, employees or worker's wages, investments, as well as the means of production of goods and services and allocation of resources for production should be controlled or regulated by the public (government) rather than the private sector (free market).

A capitalist economy also referred to as free-enterprise system, pure capitalism, or free market can be defined as a type of economy in which prices, products and services are being determined by the market rather than the government. Thus, a capitalist economy is devoid (free) of government regulations, interference or control because the market (enterprises) are the ones who are saddled with the responsibility of determining the market forces.

Simply stated, a capitalist economy is a type of economy that is completely driven by demand and supply of goods and services.