#1
Which of the following is a characteristic of a command economy?
Centralized government control
ExplanationGovernment dictates economic decisions.
#2
In a market economy, prices are primarily determined by:
Supply and demand
ExplanationInterplay of buyers and sellers.
#3
Which of the following is a characteristic of a free-market economy?
Minimal government intervention
ExplanationGovernment interference limited.
#4
In a market system, who ultimately determines the allocation of resources?
Consumers and producers
ExplanationSupply and demand dynamics guide.
#5
What is the primary mechanism for resolving the problem of scarcity in a market economy?
Price system
ExplanationScarcity addressed through pricing.
#6
Which economic system allows individuals and businesses to own property and make economic decisions based on self-interest?
Market economy
ExplanationIndividuals and firms determine.
#7
Which economic system allows for the most individual freedom of choice?
Market economy
ExplanationIndividuals make economic decisions.
#8
Which of the following is a characteristic of a mixed economy?
Combination of private and public sectors
ExplanationBlend of government and private enterprise.
#9
Which of the following best describes laissez-faire capitalism?
Free-market economy with minimal government interference
ExplanationGovernment minimally involved in economy.
#10
What is a disadvantage of a centrally planned economy?
Inefficient allocation of resources
ExplanationResources misallocated by government.
#11
Which economic system emphasizes collective ownership of the means of production?
Socialist economy
ExplanationMeans of production owned by society.
#12
Which of the following is a disadvantage of a pure command economy?
Potential for market inefficiency
ExplanationGovernment may misallocate resources.
#13
What is the primary goal of a traditional economy?
Preserving cultural values
ExplanationEconomic decisions based on customs.
#14
What is the role of the invisible hand in a market economy, as described by Adam Smith?
Automatic self-regulation of markets
ExplanationMarket forces naturally guide economy.
#15
What is the key principle underlying the law of demand?
As prices increase, quantity demanded decreases
ExplanationInverse relationship between price and demand.
#16
What is the role of entrepreneurship in a market economy?
To innovate and take risks
ExplanationDriving force behind innovation.
#17
Which of the following is a characteristic of perfect competition?
Price-setting power for individual firms
ExplanationNo individual firm influences prices.
#18
What is the main function of a stock exchange in a market economy?
To facilitate the buying and selling of shares
ExplanationPlatform for trading securities.