Economic Systems Quiz

How is the price of a product determined?

• When demand is low

• When supply and demand meet

• When supply is high

• None of the above

True or False: There is government intervention in a free market.

• True

• False

Why is it a "free" market?

• businesses can compete with one another

• The government does not control the goods being produced in a company

• The government does not interfere with demand and supply in the economy

• all of the above

What country is most like a free market based on the graph?

• Venezuela

• France

• United States

• North Korea

What country is least like a free market based on the graph?

• Japan

• North Korea

• France

• Sweden

Why does a communist country not have a "free" market?

• Monopolies are unable to form

• People have no money

• Communist governments have control over businesses

• None

Scenario: The price of coffee beans rises because of a drought in the primary coffee-producing regions. Coffee shop owners respond by increasing the price of a cup of coffee. 

Is this a problem of demand or supply?

• Demand

• Supply

• Both

• None

Price gouging often occurs when there is a sudden increase in demand for essential goods and services.

• True

• False

Governments may implement price gouging regulations to prevent unfair practices and protect consumers.

• True

• False

Price gouging can lead to shortages of essential goods as people may not afford the inflated prices.

• True

• False