Economics Quiz

What is a market?

• A place where only buyers can exchange goods.

• An arrangement that allows only sellers to exchange services.

• An arrangement that allows buyers and sellers to exchange goods and services.

• A storage area for goods and services.

What is capitalism?

• A political system where the government controls all property.

• An economic system where production is controlled by the government.

• An economic system where factories, equipment, and other means of production are privately owned.

• A social system based on equal distribution of resources.

What is communism?

• A) A political system where individual citizens own all property and means of production.

• B) An economic system where the state or community owns all property and the means of production, and all citizens share the wealth.

• C) A form of government where a single party holds power and controls the economy.

• D) An economic system based on free-market principles and private ownership.

Under which economic system are assets owned by private firms?

• Socialism

• Communism

• Capitalism

• Feudalism

What degree of economic freedom is associated with a free market economy?

• Lowest degree of economic freedom

• Moderate degree of economic freedom

• High degree of economic freedom, but not the highest

• Highest degree of economic freedom

What is another name for a Market Economy?

• Centralized Economy

• Free Market Economy

• Traditional Economy

• Command Economy

Who decides what to produce and purchase in a Market Economy?

• The government

• Businesses and consumers

• Foreign investors

• Central planners

What determines what is produced and the price that will be charged in a Market Economy?

• Government regulations

• Supply and demand

• International trade agreements

• Central planning committees

What is an advantage of a Market Economy?

• Equal distribution of wealth

• Competition to have the best products and services

• Government control over production

• Fixed prices for all goods and services

What is a disadvantage of a Market Economy?

• Inefficient resource allocation

• Lack of innovation

• Huge rift between wealthy and poor

• Overproduction of goods