Africa: Economics Practice Test (SS7E1a-c/SS7E2a-c)

How are the basic economic questions decided in a market economy?

• They are decided based on custom and habit.

• They are decided based on the needs of the public.

• They are decided based on government priorities.

• 
  They are decided based on consumer preferences.

Answer explanation

In a market economy, basic economic questions are determined by consumer preferences, as they drive supply and demand. Producers respond to what consumers want, making this choice the most relevant.

Tags

SS7E1

Which situation is likely to occur in a pure command economy?

• There are few obstacles to starting businesses.

• The government owns all businesses.

• People refuse to trade with each other.

• There are strong private property protections.

Answer explanation

In a pure command economy, the government controls all economic activities, including ownership of businesses. This makes 'The government owns all businesses' the correct choice, as private ownership is not permitted.

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SS7E1

Read the text. Then answer the question that follows.

Some industries in South Africa, such as housing and healthcare, are controlled by the government. Most other industries, such as mining, agriculture, and manufacturing, are controlled by the private sector, and have helped South Africa become a major economic power in Africa.

Based on the information, what conclusion can be drawn about the South African economy?

• 
  South Africa has a pure market economy.

• South Africa has a pure command economy.

• South Africa has a command economy with some market elements.

• South Africa has a market economy with some command elements.

Answer explanation

The text indicates that while some sectors are government-controlled (command elements), most industries operate in the private sector (market elements). Thus, South Africa has a market economy with some command elements.

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SS7E1

Which country MOST LIKELY has a mixed economy?

• a country in which the government sets wage levels and the prices of goods

• a country in which bartering is often used in the place of monetary exchange

• a country in which some industries are government owned and some are privately owned

• a country in which private businesses operate with complete freedom and without regulation

Answer explanation

A mixed economy features both government and private ownership of industries. The correct choice describes a country where some industries are government-owned and others are privately owned, fitting the definition of a mixed economy.

Tags

SS7E1

What is a characteristic feature of traditional economies?

• inherited economic roles

• valuable natural resources

• government ownership of land

• high levels of entrepreneurship

Answer explanation

Traditional economies often feature inherited economic roles, where jobs and responsibilities are passed down through generations, ensuring continuity and stability in the community's economic practices.

Tags

SS7E1

How are the basic economic questions decided in a command economy?

• They are decided based on custom and habit.

• They are decided based on supply and demand.

• They are decided based on government priorities.

• They are decided based on consumer preferences.

Answer explanation

In a command economy, the government makes decisions regarding the basic economic questions, prioritizing its goals over market forces or consumer preferences.

Tags

SS7E1

How are the basic economic questions decided in a traditional economy?

• They are decided based on custom and habit.

• They are decided based on supply and demand.

• They are decided based on government priorities.

• They are decided based on consumer preferences.

Answer explanation

In a traditional economy, the basic economic questions are determined by customs and habits passed down through generations, rather than by market forces, government decisions, or consumer preferences.

Tags

SS7E1

Read the information below and answer the question.

Country X is a democratic country in West Africa. The economy of the country is mostly dependent on timber and oil exports. One state-owned company controls all production and sales aspects of the country's natural resource industries. The government restricts who may start a business in the country, and heavily taxes the businesses that do exist. Despite the restrictions, small restaurants, shops, and other businesses that do not compete with state-owned businesses thrive.

Which BEST describes the economy of Country X?

• pure market economy

• traditional economy

• mixed economy

• 
  pure command economy

Answer explanation

Country X has a state-owned company controlling key resources, indicating government involvement, while small businesses thrive, showing market elements. This combination of state control and market activity defines a mixed economy.

Tags

SS7E1

What is a characteristic feature of market economies?

• inherited economic roles

• valuable natural resources

• government ownership of land

• high levels of entrepreneurship

Answer explanation

Market economies are characterized by high levels of entrepreneurship, which drive innovation and competition. This is in contrast to inherited roles, natural resources, or government ownership, which do not define market dynamics.

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SS7E1

Why are most economic systems today considered mixed economic systems?

• most economic systems contain aspects of only one system

• most economic systems focus primarily on goods that will make the most money

• most economic systems focus primarily on natural resources

• most economic systems contain aspects of more than one system

Answer explanation

Most economic systems today are considered mixed because they incorporate elements from both market and planned economies, allowing for a combination of private enterprise and government intervention.

Tags

SS7E1