What is a Market Economy? - Definition, Advantages, Disadvantages & Examples


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question 1 of 3

Which of the following is the best explanation of a market economy in the real world?

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1. What is the relationship between a market economy and government regulation?

2. What determines the price of goods and services in a market economy?

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About This Quiz & Worksheet

There are various positive elements, along with some negative aspects, to market economies that the quiz/ worksheet combination for this lesson will help you to explore. Understand details like the benefits to individuals derived from a free market and the effects that a market economy can have on the environment.

Quiz & Worksheet Goals

The lesson items test you on these aspects of market economies:

  • An explanation of market economies
  • Advantages and disadvantages
  • Prices of goods and services
  • The relationship between the market and the government

Skills Practiced

This quiz and worksheet will assess the following skills:

  • Reading comprehension - ensure that you draw the most important information from the related What is a Market Economy lesson
  • Distinguishing differences - compare and contrast topics from the lesson, such as the advantages and disadvantages of market economies
  • Making connections - use understanding of the concept of government regulation to understand the role of government in a market economy

Additional Learning

Learn more about free market economics by reviewing the associated lesson What is a Market Economy? - Definition, Advantages, Disadvantages & Examples Achieve the following objectives using this lesson:

  • Define the term market economy
  • Understand the role of the government in a market economy
  • Identify the advantages and disadvantages to market economics
  • Discover the determinants of price in a free market
  • Understand how concepts like ownership and production function in a market economy