PED-Mixed Economic system

what is an advantage of the market economic system?

• It aims for equality of income

• It ensures the provision of defence and law and order

• It gives an incentive to produce

• It reduces pollution and congestion

In a country where the demand for petrol is price-inelastic, the incidence of any increase in petrol tax will be mainly on ...

• the company that refines the oil

• the motorist who buys the petrol

• the petrol station that sells the petrol

• the wholesale company that stores the petrol

what is an example of market failure?

• a growth of competition

• an existence of scarcity

• a spread of pollution

• a surplus of production in the short-term

Which action by the operators of an airport directly reduces external costs?

• the stopping of night flights

• the building of a new runway

• the payment of a productivity bonus

• the reduction of charges for landing aircraft

how are economic decisions determined in a pure market system?

• by a mixture of market forces and government regulation

• by central planners of production and consumption

• by government regulation of the price mechainsm

• by the force of demand and supply

which person would wish to encourage the use of the market system

• someone who believes that people have equal living standards

• someone who believes that people have equal freedom of action

• someone who believes that profit maximisation is wrong

• someone who believes that the government should correct peoples' bad behaviuor

what is an example of an external cost?

• a company's transport costs

• the cost of bringing about a merger

• the cost of buying components from supplier

• the cost of industrial pollution

What is found in a mixed economy but not a free market economy?

• banks

• division of labour

• price controls

• profit motive

A shop sells chocolate birthday cakes. When the price was $15 it sold 40 cakes. It reduced the price to $10 and sold 60 cakes. What can be concluded from this?

• The firm will make less profit because the price has fallen

• the firm will make more profit because sales have increased

• the price elasticity is inelastic because demand only increased by 50%

• there is unit price elasticity because the firm's revenue remained the same after the price change

In 2010, a major oil leak from an oil rig affected many people living around the Gulf of Mexico. What type of market failure did they experience

• monopoly exploitation

• negative externality

• price discrimination

• rising tax burden