LCCP_MIDTERM_BASICMICRO_2024-2025

In a command economy, decisions about production and distribution are primarily made by:

• Individual businesses

• The government

• The global market

• Consumers

In a free-market economy, prices are determined by:

• Government regulations

• Supply and demand

• Custom and tradition

• Business monopolies

A key characteristic of a traditional economy is that it:

• Relies heavily on technology

• Follows established customs and practices

• Operates on a large, global scale

• Has extensive government intervention

Which of the following is most likely to exist in a mixed economy?

• Complete government control over resources

• Only private ownership of businesses

• A combination of private and public ownership

• No taxes or government involvement

In a market economy, competition among businesses generally leads to:

• Higher prices for consumers

• Increased efficiency and innovation

• More monopolies

• Less choice for consumers

A pure command economy might face problems with:

• Consumer choice

• Complete reliance on supply and demand

• Equal distribution of wealth

• Lack of government control

A mixed economy tries to balance:

• Profit with limited consumer rights

• Individual freedom with government regulation

• Government control with no regulation

• Market trends without competition

In a command economy, what typically motivates production and distribution?

• Consumer demand

• Government goals and plans

• Profit incentives

• Individual preference

A traditional economy is most likely to rely on which resource allocation method?

• Government decisions

• Custom and heritage

• International trade agreements

• Technological advancement

Which type of economic system best describes a system where both the private sector and government play a role in the economy?

• Command economy

• Market economy

• Mixed economy

• Traditional economy