Capitalism vs. Socialism: Differences, Advantages/Disadvantages & the 'Underground Economy'


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Which of the following situations are most likely to occur in a socialist economy?

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1. Which of the following is NOT an advantage of capitalism?

2. In a certain country, light bulbs are very expensive because one privately-owned business supplies the vast majority of the light bulbs in the country. Under which economic system would this be MOST likely to occur?

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About This Quiz & Worksheet

This quiz/worksheet combo reviews the different characteristics of socialist and capitalist economic systems. In the quiz questions, you'll be given a characteristic and asked to identify which system it's associated with.

Quiz & Worksheet Goals

Prepare to answer questions on the following:

  • Advantages of capitalism versus advantages of socialism
  • The economic system that may lead to the occurrence of monopolies
  • The economy theory that a program like Medicare represents
  • The economic system that puts the government in charge of the economy
  • The economic system based on private or corporate ownership

Skills Practiced

  • Critical thinking - apply relevant concepts to examine information about the advantages of socialism in a different light
  • Distinguishing differences - compare and contrast the characteristics of socialism and capitalism
  • Interpreting information - verify that you can read information regarding the state's role in a socialist economy and interpret it correctly

Additional Learning

Continue studying economic systems by reviewing the corresponding lesson, Capitalism vs. Socialism: Differences, Advantages/Disadvantages & the 'Underground Economy'. This lesson covers the following objectives:

  • Define socialism and capitalism
  • Differentiate between formal and informal economies
  • Understand the roles of government and private enterprise in capitalist and socialist economies
  • Identify the benefits and drawbacks to consumers that come with capitalist and socialist economies