Family units in Smallisland Country make all the products they consume. This is an example of
A. an economy where marketing is efficient
B. a pure market-oriented economy
C. a planned economy
D. an economy where the role of middlemen is important
E. a pure subsistence economy
Answer: (E) In a pure subsistence economy, family units make all the products they consume; therefore, (E) is correct. In this type of economy, no marketing takes place because marketing doesn't occur unless two or more parties are willing to exchange something for something else; consequently, (A) is incorrect. In a planned economy, the government makes all decisions about the production and distribution of products and services; therefore, (C) is not the correct choice. In a pure subsistence economy, there is no need for middlemen, since marketing does not occur. (D) is not a correct choice.