11 mark
What can be found in a market economy?
externalities and monopolies
interest rates and public goods
public corporations and market prices
tax rates and commercial banks
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Market Economic System (CIE IGCSE Economics)
Topic Questions
21 mark
Cuba is implementing free market reforms.
What is a likely advantage of this?
a wider variety of goods and services produced
greater equality between the different groups in society
increased provision of public goods
less consumption of goods with external costs
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31 mark
An economy operates entirely as a market system.
Which type of service would not be provided in such an economy?
commercial banking services
free government health services
private educational services
profitable retail services
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41 mark
Which of the following is a characteristic of a free market system?
Government control over production and prices
Equal distribution of wealth among all citizens
Absence of competition among producers
Private ownership of resources and means of production
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51 mark
Which of the following is a characteristic of a free market system?
Equal distribution of resources
Centralised government control over production
Price ceilings and floors set by authorities
Competition among producers for consumer business
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11 mark
China, the world’s second largest economy, is becoming more like a market economy.
Which policy would contribute directly to such a change?
abolishing state control completely
encouraging consumers to spend more and save less
reducing exports and encouraging more imports
transferring wealth from the state sector to the private sector
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21 mark
Which characteristic of a free market system promotes competition among businesses and individuals?
Government ownership of key industries
Centralised planning of production
Price controls set by authorities
Freedom of choice
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31 mark
Which characteristic of a free market system encourages individuals to work hard and innovate?
Price controls to ensure fairness
Government ownership of key industries
Equal distribution of wealth
Potential for profit through self-interest
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41 mark
Which characteristic of a free market system refers to individuals' ability to make decisions based on their preferences and needs?
Property ownership
Freedom of choice
Limited government intervention
Price mechanism
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51 mark
What is a key feature of a free market system in terms of government intervention?
Extensive regulation of businesses
Minimal interference in market transactions
Government ownership of resources
Heavy taxation of individuals
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11 mark
Which pair of economic institutions can be found in a market economy?
local government and charities
monopolies and commercial banks
nationalised industries and partnerships
stock exchange and public corporations
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21 mark
What is a disadvantage of a market economic system?
Entrepreneurs lack incentives to produce what consumers want.
Government intervention will reduce the efficiency of firms.
Market dominance by firms can lead to higher prices.
There is underproduction of demerit goods.
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31 mark
Which of the following is an advantage of a free market system?
Guaranteed equal distribution of wealth
Elimination of all government regulations
Efficient allocation of resources based on demand
Centralised control of production by the government
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41 mark
Which disadvantage of a free market system leads to wealth inequality?
Limited consumer choice
Lack of government intervention
Unequal distribution of resources
Excessive competition among producers
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51 mark
What is a disadvantage of a free market system?
Insufficient competition among producers
Lack of consumer choice
Inadequate provision of public goods
Excessive government intervention
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