Economics: Market Systems and Challenges
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Economics: Market Systems and Challenges

This quiz covers the concept of the 'invisible hand', the virtues of the market system, and the demise of command systems. It explores the ideas of Adam Smith and the challenges faced by command economies.

Created by
@EasierMagnesium

Questions and Answers

What is the primary goal of producing goods and services in a market economy?

To create a profit

Which method allows consumers to determine which goods will be produced in a market economy?

Dollar votes

What is the primary objective of firms in a market economy when deciding how to produce goods and services?

Minimize cost per unit

Which factor determines who will get the output in a market economy?

<p>Effective demand</p> Signup and view all the answers

What is the primary driver of change in a market economy?

<p>All of the above</p> Signup and view all the answers

What promotes progress in a market economy?

<p>Competition among firms</p> Signup and view all the answers

How do firms decide which production technique to use in a market economy?

<p>By comparing the cost of each technique</p> Signup and view all the answers

What is the primary advantage of a market economy over a command economy?

<p>Greater efficiency in resource allocation</p> Signup and view all the answers

Which of the following is NOT a characteristic of a market economy?

<p>Central planning</p> Signup and view all the answers

What is the primary role of consumers in a market economy?

<p>To determine which goods will be produced</p> Signup and view all the answers

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