Economic Systems: Communism & Capitalism This activity is important because an economic system describes how a particular society distributes its resources to produce goods and services. A central issue of economics is how to fulfill an unlimited demand for goods and services in a world with a limited supply of resources. Different economic systems attempt to resolve this central issue in numerous ways. The goal of this exercise is to demonstrate your understanding between the fundamental differences between communism and capitalism, two of the basic economic systems found in the world today, and how they address the distribution of resources. Roll over over each term on the left and read each statement describing capitalism, communism, and the aspects of an economic system. Move each box to the correct place in the chart on the right. Expensive gas Abundant selection Business ownership Market influence Gas prices skyrocket Competition Charity donation Jack's Wheels Profits State Bread Co. Government collected Product availability Limited choice Constant sales Price Reset Communism Capitalism
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Step 1: Identify the terms that are associated with Communism and Capitalism. Show moreā¦
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Guided Reading Activity: The American Free Enterprise System Lesson 1: American Free Enterprise Capitalism Review Questions A. Characteristics of Free Enterprise Capitalism Main Idea: The five characteristics of free enterprise capitalism are economic freedom, voluntary exchange, private property, the profit motive, and competition. 1. An economy based on free enterprise has both __________ and __________ __________ 2. Economic freedom grants the ability to __________ the things you want and __________ where and for whom you want. Businesses can __________ the workers they want and are free to __________ success or failure. 3. In a __________ exchange, buyers acquire items they believe are worth __________ than the money charged, while __________ believe the item sold is worth __________ than the cash paid. Both parties believe they __________ from the transaction. 4. In a capitalistic system, people can do whatever they choose to their property due to __________ __________ Additionally, they have the opportunity to __________ and __________ based on the value of their property. 5. The __________ __________ drives producers to improve their __________ well- being. Because of this, the lure of __________ guarantees a constant supply of goods and services from all kind of producers. 6. Capitalism helps ensure __________ resources are used efficiently by promoting __________ among producers.
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Communist countries worked under the premise that allowing the market forces of supply and demand to operate with no government intervention would achieve the most efficient allocation of scarce resources.
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Consider the following grading system for a hypothetical economics class. Students earn course points, and at the end of the semester, each student keeps his or her own course points and receives a letter grade based on how many course points he or she earns (for example, 90 course points or higher equals an A). Each student may also voluntarily sacrifice one letter grade and donate this to a student with a lower grade. Which economic system is most comparable to the grading system described above? Communism. Socialism (mixed economy). Anarchy. Capitalism.
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