Multiple choice Economic system Gec o' level economics

Multiple choice – Economic system

1.What is a feature of a mixed economic system but not a planned economic system?

A It has both industrial and service sectors.               B It has both large and small firms.

C It has both public and private sectors.                     D It has both rural and urban areas

2.What can happen in a planned economy that does not happen in a market economy?

A The allocation of resources can take account of the total effects on society.

B There can be full employment of factors of production.

C There can be inflation.

D There can be international trade.

3.In a mixed economy, resources are used as a result of

A the decisions of consumers only.                            B the decisions of firms only.

C the decisions of consumers and firms.                   D the decisions of consumers, firms and government.

4.What is found in a market economy but not a command economy?

A division of labour     B economies of scale  C money as a store of value    D the profit motive

5.There are more people in developing countries who cannot read or write than in developed

countries. What can be concluded from this?

A Developed countries will use more labour than capital as it is skilled.

B In developing countries, factors of production are not used to their maximum potential.

C Less money needs to be spent on education in developed countries than in developing   countries.

D Production in developing countries is likely to rely more on capital than labour.

6.A free market economy is more likely than a planned economy to encourage development because

A equality of income is encouraged.                          B factors of production would be employed efficiently.

C government intervention uses taxes and subsidies.           D social costs are taken into consideration.

7,Each country of Southern Africa has a mixed economy. Which statement about a mixed economy is correct?

A The government employs most primary sector workers.

B The government owns all major secondary sector industries.

C The government owns the transport network.

D The government provides public and merit goods.

8.Countries that have changed from command to market economies will expect to find an increase in

A choice.            B price control.               C rationing.                       D subsidies.

9.If a planned economy became a mixed economy, which industry would be most likely to remain under government control?

A agriculture                            B coal mining                  C defence               D motor car production

10.What occurs in a planned economy but not a market economy?

A allocation by the government       B allocation by the price system     C economies of scale     D specialization

11.It was reported in 2002 that South Africa, a mixed economy, would face sharp increases in air and water pollution unless action was taken to develop environmentally friendly policies for its citizens. Why is a mixed economic system thought to be a satisfactory means of achievingenvironmentally friendly development?

A because all development is paid for by the government B because it allows external costs to be considered

C because it ensures development at lowest cost            D because it is the most productive system

12.In a market economy, what does the entrepreneur decide?

A the combination of resources used                               B the demand for the product

C the equilibrium price of the product                              D the level of profits

13.China is changing from a centrally planned economy towards a market economy.

How will the influence of consumers and the government change?

14.What is always a feature of a mixed economy?

A All capital goods are produced in the public sector.

B Resources are used in the public and the private sector.

C The allocation of all resources is determined by the price mechanism.

D The public sector is larger than the private sector.

15.Which of the following is an advantage of the market economic system?

A It aims for equality of income.          B It ensures the provision of defence and law and order.

C It gives an incentive to produce.       D It reduces pollution and congestion

16.Why did planned economies often experience long queues for consumer goods?

A The factors of production were able to move freely. B The distribution of goods was inefficient.

C The output decisions were taken to maximise profits. D The needs of consumers determined production.

17.Economic growth in Russia and China used to be led by the public sector. Now it results more from activities in the private sector. However, both sectors are important. Which term describes the current system in Russia and China?

            A market                     B mixed                       C planned                    D subsistence

18.During the 1990s the economies of Eastern Europe moved from operating as planned economies

to market systems.What did this involve?

A greater use of a national plan, with private ownership of firms

B greater use of demand and supply, with a larger public sector

C greater use of government ownership, with higher living standards

D greater use of the profit motive, with consumer sovereignty

19.What is more likely to be found in a free market economy than in a planned economy?

A an even distribution of income                  B an incentive to innovate

C a wide range of public goods                   D full employment of labour

20.What is the most likely economic reason for the government returning a publicly owned industry to

the private sector?

A to achieve economies of scale                  B to control a strategic industry

C to increase competition in that industry     D to increase worker control

21.In a mixed economy, what determines the allocation of resources?

A central authorities only                                  B central authorities and firms only

C central authorities, firms and consumers      D consumers only

22.Many countries are moving from planned to market economic systems. Which of the following would they reduce?

A individual ownership of land      B private industry         C price control          D the profit motive

23.What would reduce the role of central planning in an economy?

A increasing government spending                   B increasing public ownership of firms

C increasing the role of markets                    D removing the profit motive

24.Which argument can be used in favour of the market economy?

A It enables consumers to show their preferences for goods.   B It ensures that all capital resources are used.

C It guarantees full employment.                           D It leads to an equal distribution of wealth