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Economics multiple choice questions

GCSE and O level

Market and Mixed Economic System

Multiple Choice Questions and Answers

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 (N10/P1/QI16]

Answer is B

What 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 [J11/P1/Q4)

Answer is C

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 (J11/P1/Q11]

Answer is A

How are economic decisions determined in a pure market system?

A by amixture 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 (N11/P1/Q6]

Answer is D

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 {N11/P1/Q7]

Answer is B

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 maximisation is wrong
D someone who believes that the government should correct peoples’ bad behaviour{N11/P1/Q11]

Answer is B

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 (J12/P1/Q4]

Answer is B

Why might a free market economy be more advantageous than a mixed economy?
A Equality of income is encouraged
B Ina mixed economy, governments use taxes which are inefficient
C Production is determined solely by consumer wishes
D Social costs are taken into consideration {N12/P1/Q4]

Answer is C

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 (J13/P1/Q4)

Answer is B

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 mate- rial ’
D ‘Small shops close as large supermarkets open in the area ’ (J14/P1/Q5]

Answer is B

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