Economic Systems and Coordination Mechanisms Quiz

Private ownership allows individuals and businesses to control and allocate resources based on market forces.

Government authorities centrally plan and control economic activities in a command economy.

Prices in a market economy are determined by the forces of supply and demand in a competitive market.

A traditional economy relies on cultural customs and beliefs to guide economic decisions.

A market economy allows individuals the freedom to own businesses and pursue entrepreneurial opportunities.

In a centrally planned economy, the state has control over production decisions, often leading to a lack of flexibility.

A command economy prioritizes public ownership and centralized planning under government authority.

In a mixed economy, there is a balance between private and public ownership with some government intervention but limited compared to other systems.

Preserving cultural traditions is the main goal of a traditional economy, guiding economic decisions based on customs and beliefs.

Central planning in a command economy often leads to limited consumer choices and variety.

Competition in a market economy ensures efficient allocation of resources as businesses compete for consumers.

Prices in a command economy are determined by government authorities as part of centralized planning.

Market coordination relies on individuals competing in a market, with prices determined by supply and demand.

Bureaucratic coordination involves the use of rules and regulations to allocate resources under a hierarchical structure.

Hierarchical coordination involves a structured hierarchy of authority to make decisions and allocate resources.

Network coordination involves the use of informal relationships and trust to facilitate resource allocation.

Market coordination involves the use of contracts and legal agreements to facilitate transactions in a competitive market.