Ch 15- Mixed Economic System Part 1

What is a mixed economic system?

• A system where all firms are government owned

• A system combining planned and market economy features

• A system with no government intervention

• A system that is entirely market-driven

In a mixed economy, the prices of some goods are set by:

• International markets exclusively

• Private firms only

• Both the government and market forces

• Consumers through demand only

Which of the following is NOT a benefit of state intervention in a mixed economy?

• Increases efficiency

• Eliminates private sector

• Generates choices

• Creates incentives

How might the government in a mixed economy encourage the consumption of healthier products?

• By banning unhealthy products

• By subsidizing healthy products

• By increasing taxes on all products

• By importing more products

What role does the government play regarding public goods in a mixed economy?

• It leaves the production to the private sector

• It only regulates without providing

• It has no involvement in public goods

• It finances production that the private sector might ignore, like defense

A government subsidy to producers will shift the supply curve in which direction?

• Right

• No shift

• Left

• Downwards

If demand is inelastic, what effect does a subsidy have on quantity sold?

• Decreases significantly

• No effect

• Increases slightly

• Increases significantly

Which is a risk associated with a mixed economic system?

• Market failure

• Excessive government profits

• High consumer choice

• oo much efficiency

What happens when a subsidy is given to a product with elastic demand?

• Quantity sold decreases

• Producers keep most of the subsidy

• Price does not change

• Consumers receive most of the benefit

What effect might a tax have on a product with inelastic demand?

• Decrease quantity sold drastically

• No change in quantity sold

• Small reduction in quantity sold

• Increase in quantity sold