Economic System Quiz

What are the key components of an economy?

• Individual freedom, private ownership, and competition

• Traditional, command, and market

• Land, labor, capital, and entrepreneurship

• Production, distribution, and consumption

In a market economy, prices are primarily determined by:

• Government regulations

• Central planning

• Forces of supply and demand

• Consumer preferences

Which economy type is characterized by government ownership and central planning?

• Market economy

• Command economy

• Traditional economy

• Mixed economy

What is a characteristic of a mixed economy?

• Limited government intervention

• Private ownership of all resources

• Central planning by the government

• Equal distribution of wealth

Which economic agent is responsible for making decisions about public spending and policies?

• Foreign entities

• Households

• Governments

• Firms

What is a feature of perfect competition in market structures?

• Single seller dominates the market

• Small number of large firms

• Many sellers offer differentiated products

• Identical products and ease of entry and exit

What is a function of markets in an economy?

• Central planning

• Wealth generation

• Limited consumer choice

• Bureaucratic inefficiencies

Which market involves the exchange of financial instruments such as stocks and bonds?

• Commodity market

• Financial market

• Factor market

• Product market

In a monopolistic competition market, products are:

• Easily substitutable

• Controlled by a single seller

• Differentiated

• Identical

What is a disadvantage of a command economy?

• Limited government intervention

• Difficulty in responding to changing consumer preferences

• Economic inequality

• Lack of consumer choice and innovation