Chapter 11 The Mixed Economy

Chapter 11 The Mixed Economy

Multiple Choice

Define the private sector.

• Provision of goods and services by businesses that are owned by individuals or groups of individuals.

• Provision of goods and services by the government.

• Provision of goods and services not provided by businesses that are owned by individuals or groups of individuals.

Multiple Choice

When two or more people come together to share resources and responsibility over a business, it is referred to as a

• company

• sole trader

• partnership

Aims of the Private Sector

• Survival

• Profit Maximisation

• Growth

• Social Responsibility

Multiple Choice

The private sector is thought to be the most efficient (use resources properly). In which case would an aim not be efficient?

• Profit aim keeps costs low.

• Competition keeps prices low.

• Maximising profit might make the firm try to exploit consumers, especially when there is only one firm.

• Firms try to please customers so provide good quality and innovation.

Multiple Choice

Define the public sector.

• private organisations that provide goods and services in the economy.

• government organisations that provide goods and services in the economy.

• government organisations that don't provide goods and services in the economy.

Multiple Choice

Ministry of Defense, Department of Education, Department of Health are all...

• Local authority services

• Central government departments

• State-owned enterprises

• Other Public Sector Organisations

Aims of the Public Sector

• Improve quality of services

• Minimising costs

• Allow for social costs and benefits

• Profit

Multiple Choice

How many types of economies are there?

• One

• Two

• Three

• More

Multiple Choice

The government makes all economic decisions.

• Command or Planned

• Traditional

• Market or Free Enterprise

• Mixed

Multiple Select

A mixed economy combines the best parts of which other economies? ^{This question has two correct answers.}

• Market and Command

• Traditional and Market

• Command and Traditional

Multiple Choice

Consumers who are willing to spend the money decide what is being produced.

• Command or Planned

• Traditional

• Market or Free Enterprise

Multiple Choice

Market failure results in a misallocation of resources. In some cases, this can be corrected by the government.

• False

• True

Multiple Choice

A market failure is best described as

• The idea that market forces of supply and demand always provide the maximum benefit for society

• The idea that market forces of supply and demand do not always provide the maximum benefit for society

• The concept that a decision made by one party can have positive effects on another party

What are the five market failures? Please make sure that you know the difference.

• Externalities

• Lack of Competition

• Lack of Information

• Factor Immobility

• Missing Markets

Multiple Choice

Spillover of production or consumption that impose costs on third parties are known as

• Externalities

• Lack of Competition

• Missing Markets

• Lack of Information

Multiple Choice

A shared good or service (non-rivalry) for which it would be inefficient or impractical to make consumers pay individually and to exclude nonpayers (non-excludability). Examples: Roads, mail, military.

• Merit goods

• Public goods

• Economic goods

Multiple Choice

Which is not an example of a public good?

• Street lights

• Avalanche protection

• Bottled water

• Military