Economic Systems Overview Quiz

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31 Questions

Which economic system relies on bartering and trading, with little surplus produced?

Traditional Economy

In which economic system is all property publicly owned, and people are paid according to their abilities and needs?

Communism

Which economic system involves the means of production being privately owned and operated for profit?

Capitalism

Which type of economy has the government deciding everything and is mostly government controlled?

Planned Economy

Which economic system tends to discourage new ideas and new ways of doing things?

Traditional Economy

Which economic system has no incentive to innovate and makes it harder to work?

Planned Economy

What type of economic system is described as a combination of capitalistic economic freedom and principles of socialistic economic control?

Mixed economy

Which of the following refers to the lack of resources and is one of the basic economic problems?

Scarcity

What does the term 'inferior good' refer to?

A good that sees a decrease in demand when income increases

In economics, what does the term 'ceteris paribus' mean?

All things held constant

What is the main reason for considering the population as a determinant of demand?

To economize resources

What is the relationship between two complementary goods?

They are always consumed together

What type of good is affected by the demonstration effect?

Normal good

What does the demand curve represent?

The relationship between quantity demanded and price

What happens to the elasticity of demand for luxury/superior goods when people expect prices to increase?

It increases

Which economic system has all property publicly owned, and people are paid according to their abilities and needs?

Communism

What does the term 'ceteris paribus' mean in economics?

All things held constant except for price

Which economic system involves the means of production being privately owned and operated for profit?

Laissez-faire Capitalism

What happens to the elasticity of demand for luxury/superior goods when people expect prices to increase?

Elasticity decreases

Which economic system relies on bartering and trading, with little surplus produced?

Traditional Economy

What does the demand curve represent in economics?

Quantity demanded at various prices

What is the main reason for considering the population as a determinant of demand?

Population affects consumer preferences

What is the relationship between two complementary goods?

They are used together in consumption

What type of good is affected by the demonstration effect?

Veblen good

What does the Production Possibility Frontier illustrate in economics?

The opportunity cost of producing one good over another

What are the basic economic problems faced by traditional economies?

What to produce, how to produce, and for whom to produce

What is the main characteristic of a planned economy or pure command economy?

Mostly government controlled with the government deciding for everything

What is the primary disadvantage of a traditional economy?

Slow economic growth

Which economic system makes use of antiquated equipment, tools, and systems?

Traditional economy

What are the advantages of a planned economy or pure command economy?

Life is generally stable, predictable, and continuous

In a market economy or pure market economy, who decides what to produce, how to produce, and for whom to produce?

Supply and demand

Test your knowledge about different economic systems such as traditional economy and planned economy. Learn about their characteristics, advantages, and disadvantages.

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