Economic Systems of Africa Review Quiz

Which of the following questions is NOT one of the three essential questions answered by all economic systems?

• What to produce?

• How to produce?

• Where to produce?

• For whom to produce?

In a traditional economy, what determines how goods and services are produced?

• Price signals and consumer demand

• Government regulations and central plans

• Customs and traditions passed down through generations

• Business profit incentives

What is a disadvantage of a command economy?

• Consumer preferences are not considered in production decisions

• Production is inefficient due to lack of customs and traditions

• Prices are too high due to consumer demand

• Goods are only produced for those who can afford them

In a market economy, what determines what to produce?

• The government’s central economic plan

• Consumer demand and willingness to pay

• Community needs for survival

• Availability of natural resources

In a command economy, who decides how goods and services are produced?

• Individual producers

• The government through a central plan

• Local community leaders

• Consumer demand

In a market economy, how are goods and services typically produced?

• Based on cost-efficient methods chosen by producers

• According to traditions and customs

• According to the government’s priorities

• By limiting production to basic survival needs

What is a mixed economic system?

• An economy fully controlled by consumers and producers

• An economy fully controlled by the government

• An economy that combines elements of market and command systems

• An economy that does not require any control

In a mixed economy, which group(s) make economic decisions?

• Only the government

• Only consumers and businesses

• A combination of government, consumers, and businesses

• Only large corporations

How does a pure command economy differ from a mixed economy?

• Pure command economies allow full consumer control

• Mixed economies have no government involvement

• Pure command economies are fully controlled by the government

• Mixed economies depend entirely on price signals

Which of the following is an example of a command element in a mixed economy?

• Consumers deciding what products they want to buy

• The government regulating an industry for public safety

• Businesses producing goods based on price signals

• Entrepreneurs starting a new company without restrictions