Intro To Economics/Economic Systems

If a society decides to produce consumer goods from its available resources, it is answering the basic economic question:

• what to produce.

• where to produce it.

• how much to produce.

• when to produce it.

Some of the money that people deposit into a bank eventually becomes an injection into the economy when the bank

• charges interest

• pays interest

• accepts savings

• makes loans

Which factor determines who a society will produce goods and services for?

• the economic system in the society

• the available resources in the society

• the population of the society

• the external sector of the society

What type of economy is an economic system in which private businesses can operate freely with minimal state control?

• command economy

• communism

• market economy

• traditional economy

John owns an apple orchard and makes a living by selling apples. He protects his land with utmost care and takes all the necessary security measures. What motivates John to protect his land?

• family obligations

• government orders

• property rights

• societal pressure

What allows consumers to receive goods and services in a non-price rationing system?

• consumer’s ability to pay

• first-come, first-served

• free of cost

• lottery

A survey conducted recently in China showed that in the last two years, investments in businesses increased by almost 75%. The same survey also concluded that people became wealthy by investing in businesses, and this motivated other people to invest more in their respective businesses. What most likely triggered this increase in investment?

• faith in the economy

• government orders

• incentives

• traditional customs

Henry lives in a country where the government gives many incentives to produce military goods and few incentives to produce consumer goods. Henry knows a more efficient way to finish his task at work and feels like sharing it with his boss. However, he has no incentive to share it. Which type of economy does Henry most likely live in?

• command economy

• market economy

• mixed economy

• traditional economy

Which basic economic question determines how a society will produce goods and services?

• Who consumes the goods and services?

• How can available resources be used efficiently?

• What goods and services are produced?

• What price should goods and services be sold at?

Mark wants to sell his condo. Jack and Nick are two prospective buyers. Jack is willing to pay the amount quoted by Mark, while Nick is unable to pay such a high price for the condo. Because Jack is able to pay the asking price, Mark sells his condo to Jack. In which type of economy does this transaction take place?

• command economy

• communist economy

• market economy

• traditional economy