Types Of Econmy

Question 1

What is free market

Answer 1

A market that allocated resources through the price mechanism majority of commodities owned by the private sector

Question 2

What does laissze faire mean

Answer 2

All competition is equal

Question 3

What are the advantages to a free economy

Answer 3

1) efficient allocation of scarce resources
2) competition helps reduce domestic monopoly increasing choice

Question 4

What are the disadvantages to a free economy

Answer 4

1) potential rise in scale of income & wealth inequality
2) under provision of pure public and Merritt goods

Question 5

What is a command economy

Answer 5

Where the state allocate resources, set production target and growth rates. Eg North Korea

Question 6

What is a mixed economy

Answer 6

Quasi-public (part owned by the private and public sector)

Question 7

What is a benefit of a mixed economy

Answer 7

Great distribution of income through welfare benefits

Question 8

What is a disadvantage of a command economy

Answer 8

Very little choice for consumers habits are controlled by the state

Question 9

What are the possible measures for economic systems

Answer 9

Choice
Quality & innovation
Efficiency
Economic growth
Distribution of income/wealth
Risk
Political freedom