No Bull Economics Lessons

Macroeconomics & Microeconomics Concepts You Must Know

Basic Economic Concepts (1 of 10)

Question 1:
Which of the following statements is true concerning command economies and mixed market economies?
I. Economic decisions are primarily made by local customs within a command economy and markets help determine the prices of goods in a mixed market economy 
II. The government solely determines what is produced in a command economy and tribal leaders allocate resources in a mixed market economy 
III. The government and markets decide what is produced in a mixed market economy, while central planners determine how much to produce in a command economy 
IV. Resources are scarce in both command and mixed market economies 

A.  II & IV 
B.  I only 
C.  III & IV 
D.  IV only
E.  I & II 

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Correct Answer: C, III & IV. Resources are scarce no matter the type of economy. In a command economy decisions are made by central planners while the markets and government both allocate resources in a mixed market system.