Economic Systems

Question 1

System of activities involving production, consumption and exchange of goods/services

Answer 1

Economy

Question 2

Determines how scarce resources are used

Answer 2

Economic system

Question 3

Economy with no role for government and therefore no taxing or government spending

Answer 3

Market economy

Question 4

Ownership and allocation of scarce resources is split between public and private sectors

Answer 4

Mixed economy

Question 5

Government owns and control vast majority of production of scarce resources

Answer 5

Planned economy

Question 6

Amount of money made from selling at a price greater than the cost of production

Answer 6

Profit

Question 7

Market forces ensure consumers get what they want and are willing to pay for

Answer 7

Price mechanism

Question 8

When markets fail to produce goods and services that are worthwhile and result in wasteful or harmful activities

Answer 8

Market failure

Question 9

Consists of:

1. all those producers willing and able to supply a good/service
2. those willing to buy it

Answer 9

Market