African Economies Review 2/26

The South African economy can BEST be described as a

• command economy.

• traditional economy.

• pure market economy.

• mixed market economy.

All of these are characteristics of a ___ economy.

· Decision making based on supply and demand.

· Adjusts to changes in the market place.

· Producers and consumers have control of the economy.

• command

• market

• socialist

• traditional

Which of these is a correct description of one of the ways in which a command economy differs from a market economy?

• Market economies discourage free enterprise.

• In a market economy, the government sets prices.

• Command economies tend to have a higher per capita GDP.

• In a command economy, individuals have less economic freedom.

In a traditional economy, how are economic decisions made? In a traditional economy, how are economic decisions made?

• Custom and habit

• Government leaders

• Consumers and planners

• Combination of consumers and producers

Who takes on the financial risk in starting a new business in a market economy?

• Consumers

• Government planners

• Individual business people

• Combination of planners and investors

How does voluntary trade help the economy

• Voluntary trade mean prices will always be low.

• Voluntary trade only works when tariffs are in place.

• This sort of trade involves many government regulations

• It encourages specialization and usually means more profit.

Which is part of a country’s human capital?

• Skills and knowledge workers have

• Taxes collected from a country’s workers

• Money paid to workers for producing goods

• The amount of goods sold in foreign trade in a year.

What is an example of a physical trade barrier in Africa?

• Quota on Egyptian cotton sheets

• Tariff on Nigerian oil

• The Sahara desert

• Embargo on South Africa

Today, both South Africa and Nigeria have ___________ economic systems.

• Traditional

• Command

• Market

• Mixed

If Sudan’s government puts a limit on how much Nigerian oil it will import this year, what trade barrier is this?

• Embargo

• Tariff

• Quota

• Opportunity Cost