Economic Systems

If a planned economy became a mixed economy, which industry would be most likely to remain under government control?

• Agriculture

• Coal Mining

• Defence

• Motor car production

Each country of Southern Africa has a mixed economy.

Which statement about a mixed economy is correct?

• The government employs most primary sector workers

• The government owns all major secondary sector industries

• The government owns the transport network

• The government provides public and merit goods

In a mixed economy, resources are used as a result of

• The decisions of consumers only

• The decisions of firm only

• The decisions of consumers and firms

• The decisions of consumers, firms and government

Which argument can be used in favour of the market economy?

• It enables consumers to show their preferences for goods

• It ensures that all capital resources are used

• It guarantees full employment

• It leads to an equal distribution of wealth

It was reported in 2002 that South Africa, a mixed economy, would face sharp increases in air and water pollution unless action was taken to develop environmentally friendly policies for its citizens.

Why is a mixed economy thought to be a satisfactory means of achieving environmentally friendly development?

• Because all development is paid for by the government

• Because it allows external costs to be considered

• Because it ensures development at lowest cost

• Because it is the most productive system

What is NOT one of the basic economic questions in Economics?

• For whom will goods be produced?

• How will goods be produced?

• How will goods be transported?

• What goods will be produced?

A government decides that an economy should make more use of the market.

Which policy might help to achieve this?

• A decrease in control of imported goods

• An increase in government ownership of land

• An increase in subsidies to industry

• The fixing of minimum wage levels for workers

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

Which pair of economic institutions can be found in a market economy?

• Commercial banks and public companies

• Public corporations and partnerships

• Public corporations and private companies

• Stock exchange and local government schools

How are economic decisions determined in a pure market system?

• By a mixture of market forces and government regulations

• By central planners of production and consumption

• By government regulation of the price mechanism

• By the forces of demand and supply