MCQ Questions:

1. What is the most likely reason for a worker preferring to be employed by the government rather than by a firm in the private sector?
A) More chance of a fast-changing environment
B) More chance to work in a large organization
C) More opportunity to gain from successful risk-taking
D) More possibility of productivity bonuses

2. What is an advantage of the market economic system?
A) It aims for equality of income
B) It ensures the provision of defense and law and order
C) It gives an incentive to produce
D) It reduces pollution and congestion

3. Which pair of economic institutions can be found in a market economy?
A) Commercial banks and public companies
B) Public corporations and partnerships
C) Public corporations and private companies
D) Stock exchange and local government schools

4. How are economic decisions determined in a pure market system?
A) By a mixture of market forces and government regulation
B) By central planners of production and consumption
C) By government regulation of the price mechanism
D) By the forces of demand and supply

5. 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 sector 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

6. Which person would wish to encourage the use of the market system?
A) Someone who believes that people should have equal living standards
B) Someone who believes that people should have freedom of action
C) Someone who believes that profit maximization is wrong
D) Someone who believes that the government should correct people's bad behavior

7. What is true of a mixed economy but is not true of a free market economy?
A) There is a mixture of agricultural tries
B) There is a mixture of central authorities
C) There is a mixture of external benefits and private costs
D) There is a mixture of large and small companies

8. Why might a free market economy be more advantageous than a mixed economy?
A) Equality of income is encouraged
B) In a mixed economy, governments use taxes which are inefficient
C) Production is determined solely by consumer wishes
D) Social costs are taken into consideration

9. A country needs extra nurses. How could this be encouraged in a mixed economy but not in a market economy?
A) Extra part-time nursing courses could be arranged by private colleges
B) Nurses could be given a higher statutory minimum wage
C) Nursing students could be asked to pay increased fees
D) Nursing training colleges could have their subsidies reduced

10. Which headline could apply to a mixed economy but not a free market economy?
A) 'Cheap imports put domestic producers out of business'
B) 'Local government planning decision angers residents'
C) 'Many fish die as a company pollutes a river with waste material'
D) 'Small shops close as large supermarkets open in the area'

Answers:

1. B
2. C
3. A
4. D
5. B
6. B
7. B
8. C
9. B
10. B