Economics: Sectors of Industry

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Questions and Answers

In a mixed economy, which sector is characterized by the existence of private property and profit motive?

Private sector (correct)

Public sector

Joint sector

Combined sector

What is the primary objective of industries in the public sector?

Encouraging entrepreneurship

Welfare of the community (correct)

Promoting competition

Profit maximization

What is the advantage of mixed economy in terms of resource allocation?

Encourages state control

Promotes efficient decisions through price mechanism and competition (correct)

Promotes cut-throat competition

Discourages private enterprise

Which of the following is a characteristic of a mixed economy?

Existence of private property Signup and view all the answers

What is the role of the government in a mixed economy?

To provide direction and participate in economic activities Signup and view all the answers

What is an advantage of mixed economy over capitalist economy?

Greater economic and social equality and freedom from exploitation Signup and view all the answers

What is the advantage of mixed economy in terms of innovation?

Encourages innovation and technological progress Signup and view all the answers

What is the advantage of mixed economy in terms of consumer sovereignty?

Promotes consumer sovereignty and freedom of choice Signup and view all the answers

In a mixed economy, resource allocation is determined by

both markets and governments Signup and view all the answers

What is a key characteristic of a mixed economy?

Co-existence of private and public sector Signup and view all the answers

What is an advantage of a mixed economy over a socialist economy?

Greater resource efficiency Signup and view all the answers

In a mixed economy, the role of government is to

Regulate and facilitate economic activity Signup and view all the answers

How does a mixed economy differ from a capitalist economy?

More government control in a mixed economy Signup and view all the answers

What is a disadvantage of a socialist economy compared to a mixed economy?

More government control in a socialist economy Signup and view all the answers

In a mixed economy, what is the role of the market?

Play a supplementary role to government Signup and view all the answers

What is a characteristic of the allocation of resources in a mixed economy?

Combination of government and market forces Signup and view all the answers

Which sector is responsible for resource allocation in a mixed economy?

Both public and private sector Signup and view all the answers

What is the primary role of the government in a mixed economy?

To regulate the private sector Signup and view all the answers

What is a key difference between a mixed economy and a capitalist economy?

Role of government in resource allocation Signup and view all the answers

What is an advantage of a mixed economy?

Promotes social welfare Signup and view all the answers

Which characteristic is unique to a mixed economy?

Government intervention in resource allocation Signup and view all the answers

What is used to answer fundamental questions of the economy in a mixed economy?

Cost-benefit analysis Signup and view all the answers

Study Notes

Sectors of Industries in a Mixed Economy

In a mixed economy, there are three sectors of industries: private, public, and combined sectors.
Private sector: managed and controlled by private individuals and groups, based on self-interest and profit motive, with a system of private property.
Public sector: set up by the State for the welfare of the community, not primarily profit-oriented.
Combined sector: joint venture between the government and private enterprises, producing commodities and services.

Merits of Mixed Economy

Economic freedom and existence of private property, ensuring incentive to work and capital formation.
Price mechanism and competition forces promoting efficient decisions and better resource allocation.
Consumers benefit from sovereignty and freedom of choice.
Incentives for innovation and technological progress.
Encourages enterprise and risk-taking.
Advantages of economic planning and rapid economic development.
Greater economic and social equality, and freedom from exploitation due to government participation.
Disadvantages of cut-throat competition averted through government regulations.

Demerits of Socialism

Predominance of bureaucracy, inefficiency, and delays.
State direction and control of nearly all economic activity.
Socialism takes away basic rights, such as the right of private property.
No incentives for hard work in the form of profit.
State monopolies created by socialism can become uncontrollable.
Limited freedom of choice for consumers.
No importance given to personal efficiency and productivity.
Labourers are not rewarded according to their efficiency.

Mixed Economy

Depends on both markets and governments for allocation of resources.
Coexistence of private and public sectors.

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Description

This quiz covers the three sectors of industries in a mixed economy, including private sector, public sector, and their characteristics.