Economic Systems Quiz

What is an Economic System?

• A collection of decisions, institutions, laws, and arrangements aimed at addressing the Problem of Scarcity

• A system that focuses on unlimited needs and wants

• A system that only benefits the government

• A system that promotes overproduction

What is the Scarcity Problem?

• Means (resources) available to satisfy needs are scarce

• All needs are equally critical

• Resources are abundant and renewable

• Unlimited needs and wants can be satisfied immediately

Which type of economy has minimum interference from the state?

• Market Economy

• Socialist Economy

• Mixed Economy

• Planned Economy

In a Market Economy, who possesses the factors of Production?

• International organizations

• The government

• Non-profit organizations

• Private people and businesses

What is the main characteristic of a Planned Economy?

• State has full control of economic decisions

• Private Ownership is encouraged

• Competition is the driving force

• Workers have complete autonomy

In a Mixed Economy, what is encouraged to create new and better products?

• Innovation

• Imitation

• Stagnation

• Reduction

What is one advantage of a Market Economy?

• Equal Distribution

• No Private Ownership

• High Employment

• Entrepreneurship is stifled

What is a disadvantage of a Planned Economy?

• Taxes are used to take care of the poor

• Privatisation of roads keep them safe

• Workers have rights

• Nationalisation scares off investors

What is the role of the Government in a Mixed Economy?

• Levy VAT to most goods and services

• Tax workers on their salaries and wages

• Protect the consumer against unfair practice

• Encourage unfair practices

What right do citizens have in a Mixed Economy?

• No right to be heard

• Freedom of choice

• No protection against unfair practice

• No freedom of choice