Section 2 The allocation of resources (Unit 13-15)

Which term describes the way in which an economy is organised and run?

• command economy

• economic system

• market economics system

• mixed economy

Which is not a disadvantage of the market economic system?

• environmental issues

• incentives to work

• income inequalities

• social hardship

Which economic system relies on the market forces of demand and supply (in the private sector) to allocate resources?

• free market economy

• market economy

• mixed economy

• planned economy

Which is a disadvantage of operating a free market economic system?

• bureaucracy

• income and wealth inequalities

• lack of economic freedom

• lack of incentives to work

Which is an example of wasteful competition in a market economic system?

• decisions about how production should take place

• environmental issues

• excess packaging

• social hardship

Which is not an example of market failure?

• air pollution

• a supermarket charging high prices because of its monopoly power

• car parks in a town centre

• congestion caused by the number of cars on the road

Which is an example of a public good?

• healthcare

• museums

• public fireworks display

• public playgrounds

A government decides to build another airport terminal at an existing airport. This will increase air and road traffic around the airport but will also increase trade and tourism and create business employment opportunities. Which economic concepts are mentioned in the above statements?

• conservation of resources, economic growth, external benefits

• external costs, external benefits, opportunity cost

• external costs, opportunity cost, conservation of resources

• opportunity cost, occupational mobility of labour, geographical mobility

Which is not a characteristic of a merit good?

• over-provided

• provides social benefits

• under-consumed

• under-provided

Which does not provide external benefits to society?

• a local college that provides education and training to increase people's skills and qualifications

• a new history museum

• a public park

• new public housing funded by the government