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Economic System

Total questions: 20

Worksheet time: 11mins

Name
Class
Date
1.

An economic system in which business are allowed to produce any goods and services they wish is referred to as ...

a)

A centrally planned economy

b)

A pure market capitalist economy

c)

A mixed market capitalist economy

d)

A socialist economy

2.

A situation that occurs when two or more businesses try to sell the same type of product to the same customers is referred to as ...

a)

Competition

b)

Factors of production

c)

Consumer goods

d)

Free enterprise

3.

The items that consumers buy are called ...

a)

Private property

b)

Factors of production

c)

Producer goods

d)

Consumer goods

4.

Things that are needed to produce goods and services are called ...

a)

Efficient use of resources

b)

Factors of production / resources

c)

Economic systems

d)

Private property

5.

An economic system in which private property is almost totally restricted is called ...

a)

A mixed economy

b)

Competition

c)

Free enterprise

d)

A planned socialist economy

6.

An economic system that has some government restrictions on the actions of individuals and businesses is called ...

a)

A mixed market capitalist economy

b)

Factors of production

c)

A centrally planned economy

d)

Free enterprise

7.

Goods that are used to produce other goods are called ...

a)

Consumer goods

b)

Private property

c)

Producer goods

d)

Competition

8.

Two basic types of economic systems are ...

a)

Natural resources, labour

b)

What to produce, how to produce

c)

Planned socialist, market capitalism

d)

Business, consumers

9.

The words "producer goods" describe ...

a)

The final product that a producer makes

b)

The products made by all producers

c)

The goods used to produce other goods

d)

Equipment but not factories and offices

10.

The phrase "profit is the incentive for business" means that profit ...

a)

Provides a strong reason to reduce investment

b)

Reduces the need for efficient use of resources

c)

Provides a reward for the risk and effort involved

d)

Provides the incentive to increase expenses

11.

Competition occurs if ...

a)

Two or more businesses try to sell the same type of goods or services to the same customer

b)

Government agencies are the only producers of goods or services

c)

One business has the approval to sell the total production of one type of good or service

d)

One large business owns all the natural resources needed to produce some particular product

12.

Which of the following is not an example of a situation that increases profit in a free enterprise system?

a)

A business enterprise begins to lower its costs

b)

A producer uses the firm's resources more efficiently

c)

The cost of raw materials has increased

d)

Ambitious salespeople have increased the sales volume without reducing prices

13.

Australia's economy is referred to as a mixed economy because ...

a)

Producers can produce whatever they wish

b)

Businesses can act independently without government interference

c)

Government is involved in regulating and owning some businesses

d)

Government owns all businesses

14.

A centrally planned economy promotes ...

a)

Private property, profit, and competition

b)

Government ownership, no competition, and no profit

c)

Government ownership, competition, and no profit

d)

Government ownership, profit, and no competition

15.

A planned socialist economy has ...

a)

Large military spending, incentive to work to benefit individuals, and a large bureaucracy

b)

A large planning agency, many government employees, and many social benefits

c)

A large planning agency, many personal freedoms, and many social benefits

d)

Large military spending, a large bureaucracy, and many personal freedoms

16.

What is/are the basic question(s) all economic systems try to answer?

a)

What (and how much) to produce?

b)

How to produce?

c)

For whom to produce? (How to distribute income?)

d)

All of the above.

17.

What is an economic problem every nation has?

a)

How to maximise profits

b)

Not enough population.

c)

Too much pollution.

d)

Not enough resources to satisfy all wants

18.

When deciding "what to produce", what is said to be limited?

a)

Population

b)

Power

c)

Resources

d)

Water

19.

Who ultimately makes the decisions in a market capitalist economy?

a)

The government

b)

Businesses

c)

Consumers

d)

Voters

20.

Which of the following economic systems aims for the highest level of income equality among its citizens?

a)

Pure Market capitalism

b)

Mixed market capitalism

c)

Planned socialism

d)

Subsistence