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 of the fundamental differences of communism and capitalism, two of the basic economic systems found in the world today, and how they address the distribution of resources.
Match each statement with the correct aspect of the economic system for both capitalism and communism.
1. Profits - Communism
2. Product Availability - Communism
3. Business Ownership - Capitalism
4. Competition - Capitalism
5. Competition - Communism
6. Price - Capitalism
7. Profits - Capitalism
8. Employment Options - Communism
9. Price - Communism
10. Product Availability - Capitalism
11. Employment Options - Capitalism
12. Business Ownership - Communism
Match each of the options above to the items below.
a. When Suzanna Kogan was a teenager, she worked at the state-owned bread factory where everyone in her family worked. b. When John Wakoski was a teenager, he worked at his uncle’s famous artisan pottery shop on the weekends. c. Since bread production and sales are the same each month, the factory managers can ignore competition from other bread companies.
d. Jack Sampson works in a highly competitive industry. He has to make sure he knows the trends of his market so he always offers good value and retains his competitive advantage.
e. All of the money earned beyond the cost of running the shoe manufacturing business goes to the government.
f. Selena Franka chose to give all the money earned beyond the cost of running her footwear company to charity.
g. Since sweater selection is so limited, Penny has a difficult time finding one to purchase that makes her stand out from the crowd.
h. When Janet goes to the mall to buy shorts for summer, she becomes frustrated when she can’t decide which ones to buy due to so many different choices.
i. Relative to people’s income, the price for gasoline is quite high, so those who own cars are very conscientious about using them.
j. Each time there is a risk that the oil supply will decrease, or the supply does in fact decrease, gasoline prices skyrocket.
k. Mike receives notice from the government regarding where he is assigned to work.
l. Sara completes her college application to start her studies in Accounting.