Economics: Market Systems and Challenges
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Questions and Answers

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

  • To satisfy consumer needs
  • To achieve social welfare
  • To create a profit (correct)
  • To allocate resources efficiently
  • Which method allows consumers to determine which goods will be produced in a market economy?

  • Dollar votes (correct)
  • Voting system
  • Government regulation
  • Central planning
  • What is the primary objective of firms in a market economy when deciding how to produce goods and services?

  • Minimize cost per unit (correct)
  • Maximize profit
  • Maximize revenue
  • Maximize efficiency
  • 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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