Cambridge International AS Level · Economics (9708)

Resource allocation in different economic systems: Practice Questions

5 multiple-choice questions marked as you go, and 3 written questions with worked solutions. All on Resource allocation in different economic systems.

8 questions18 marksFree, no account

Question 1

1 mark

In a pure market economy, how is the basic resource allocation question of 'for whom to produce' primarily determined?

Question 2

1 mark

Which economic concept ensures that resources are allocated efficiently in a pure market economy?

Question 3

1 mark

In a planned economy (command economy), how is the basic economic question of 'how to produce' typically decided?

Question 4

1 mark

Which feature is most characteristic of a planned economic system (command economy)?

Question 5

1 mark

Which role is the government most likely to perform in a mixed economy that it would not perform in a pure market economy?

Question 6

2 marks

In a planned economy (command economy), how are the three basic questions of resource allocation (what to produce, how to produce, and for whom to produce) primarily answered?

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Question 7

6 marks

Explain how the price mechanism in a market economy answers the 'for whom to produce' question differently than the administrative directives used in a planned economic system.

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Question 8

5 marks

Economies can be organized in various ways to solve the fundamental economic problem.

(a) Contrast how resource allocation decisions are made in a market economy compared to a planned economy regarding the question of 'what to produce'. [3]

(b) Explain one potential advantage and one potential disadvantage of a mixed economy in terms of resource allocation efficiency. [2]

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