Concepts 2 : The Role of the Market Flashcards
1
Q
What are the 3 main decisions a producer has to make?
A
What to produce?
How to produce?
Who to produce for?
2
Q
What is a planned economic system?
A
The state controls the factors of production
3
Q
What is a market economic system?
A
Buyers in the market determine what to buy and sell
4
Q
What is the price mechanism?
A
How the decision made by both buyers and sellers decide how resources are used
5
Q
There is an increase in demand for a product. Put the following decisions in order to show the correct price mechanism A. Increase in demand B. Rise in Profit C. Rise in Price D. Production Increase E. Increase in employment
A
A. Increase in demand C. Rise in Price B. Rise in Profit D. Production Increase E. Increase in employment
