Title: Economic Systems
Course: TEST Course

Q: Which of the following describes a market economy?
- Resources and businesses are owned by the government.
- There is no private property.
- Economic decision-making happens through markets.
A: Economic decision-making happens through markets.

Q: Market economies are based on private enterprise, which means
- private companies control the government.
- there is no private property.
- economic decision-making happens through markets.
A: economic decision-making happens through markets.

Q: Which of the following statements describes a free market?
- There are price controls.
- The number of sellers is limited to a select few.
- Government does not intervene in any way.
A: Government does not intervene in any way.

Q: A free market is described by which of the following statements?
- Inputs are free to sellers.
- The price of outputs is controlled by the government.
- The government does not intervene in any way.
A: The government does not intervene in any way.

Q: Which of the following statements describe a competitive market?
- Government does not intervene in any way.
- The number of sellers is limited to a select few.
- There is a large number of buyers and sellers.
A: There is a large number of buyers and sellers.

Q: A competitive market is one in which
- everyone owns the factors of production.
- government makes most decisions about what will be produced.
- there is a large number of buyers and sellers.
A: there is a large number of buyers and sellers.

Q: If a country has an economy where people can buy and sell freely, but the government sets some price restrictions and regulations then it likely has a________ economy.
- free market
- command
- mixed market
A: mixed market

Q: The country of Armenia has an economy that includes people buying and selling freely, a government setting some price restrictions such as a minimum wage equivalent to $5 hour and regulates certain industries (pharmaceutical, mining, and farming). Armenia’s economy is likely a ________ economy.
- free market
- command
- mixed market
A: mixed market

Q: Tangi Tumolo carves and creates beautiful furniture on the island of Kiribati. Each month he takes the furniture to the capital city of South Tawara and sells what he can for the best prices he can. He also takes orders from people each month to build certain furniture indicating what is currently in demand. Each month the prices and products very a bit depending on the demand in the market. Tangi enjoys the ebb and flow of the changing market as it keeps his business interesting and current with demand. Kiribati’s government takes a ‘hands off’ approach with the economy and the market is thriving on its own. Tangi Tumolo lives in what type of economy?
- command
- mixed
- free Market
A: free Market

Q: Stormie Zanzibar owns a bakery in the fictitious country of Olombia. Each month the government’s market ministry mails her a large list of the regulated price of goods which include products like bread, muffins and flat bread. The list also dictates the types of goods she can sell at the bakery and what she is to charge. Because of the regulations placed on these goods, Stormie has increased her production of sweets, pies, cakes, croissants and buns and decreased her supply of breads, muffins and flat bread. She has taken these steps because the sweet goods’ prices are not government controlled. Stormie Zanzibar lives under what type of economy?
- free Market
- command
- mixed
A: mixed

Q: In a planned economy, government determines what can be produced and
- firms determined what prices will be charged.
- allows prices to change depending on market conditions.
- what prices will be charged.
A: what prices will be charged.

Q: In a planned economy, government determines the prices for goods and services, and
- firms determine what goods to produce to maximize profits.
- allows consumers to influence prices based on demand behavior.
- what goods will be produced.
A: what goods will be produced.

Q: Which country has characteristics of a command economy?
- United States
- Australia
- North Korea
A: North Korea

Q: Which country has characteristics of a command economy?
- United States
- Singapore
- Cuba
A: Cuba

Q: Nathanael runs a government auto repair shop in the fictitious country of Zamiland. He would love to own his own shop, but he would have leave Zamiland to be able to do so. Each month the government’s Ministry of Transportation secretly sends an inspector to make sure Nathanael is running the shop as required by the ministry’s regulations. This month he is written up and fined for not disposing of used oil in the government’s toxic waste receptacles. He could also be looking at jail time if this happens again. Nathanael is living with what type of economy?
- free Market
- mixed
- command
A: command

Q: In East Germany, back before the Berlin wall fell, there was one manufacturer of cars (VEB Sachsenring Automobilwerke Zwickau). They produced one type of car, the Trabant, with a maximum speed of 55 mph (26 horsepower lawnmower type engine). Anyone who wished to buy a car put their name on a list and waited for two or three years to be able to purchase a ‘Trabbi’. Whatever was available when their name came up was what they got--no choice of color, style, or engine size. East Germans were living with what type of economy?
- free Market
- mixed
- command
A: command

Q: A ruthless dictator has recently taken over the small island of Tokoli’s government and is making changes to how the government and economy used to be. One of his first actions is to enforce a command economy so as to control all aspects of the country. As you watch this new dictator’s changes, which of these actions would be in line with this new command economy he is creating?
- He opens up the economy to admit foreign companies to create business in the country and have access to the country’s resources.
- He deregulates government owned land and resources and allows the people to purchase them and create private businesses.
- He creates a new government body called the Ministry of Planning which will set wages, prices and production targets to reach each month.
A: He creates a new government body called the Ministry of Planning which will set wages, prices and production targets to reach each month.

Q: After the death of the queen in the country of Chedeux, her daughter, Chantasia became the new queen and ruler. Chantasia is known to be a ruler of the people, but as she gains more power from the populus, she begins to instigate sweeping changes to the economy and government, all in the name of helping the ‘most downtrodden among us’. One of her first actions is to enforce a command economy to control all aspects of the country and regulate its wealth. As one of the queen’s subjects, you’ve seen the changes she made. Which of these actions would be in line with this new command economy she is creating?
- Chantasia now allows foreign companies to create business in the country and have access and control over the country’s resources.
- Chantasia deregulates government owned land and resources and allows the people to purchase them and create private businesses.
- Chantasia creates a new government body called the Ministry of Planning which will set wages, prices and production targets to reach each month.
A: Chantasia creates a new government body called the Ministry of Planning which will set wages, prices and production targets to reach each month.