Economic Systems: The Mixed Economy is one of 10 topics in the Grade 11 Economics CAPS syllabus, covered across 3 lessons on Study Vault. Below are real practice questions from this topic with full worked answers.
Sample practice questions
Easy
1. In a free market economy (capitalism), the factors of production are:
Privately owned, with decisions made through the price mechanism
Owned entirely by the state
Owned collectively with no prices used at all
Owned only by government-approved cooperatives
Answer: Privately owned, with decisions made through the price mechanism — In a free market economy, private individuals and firms own the factors of production, and economic decisions are coordinated through the price mechanism rather than by a central authority.
Easy
2. In a centrally planned economy (socialism), who decides what, how, and for whom to produce?
A central planning authority
Private individual consumers only, with no government role
The price mechanism, entirely unregulated
Foreign governments
Answer: A central planning authority — In a centrally planned economy, the factors of production are owned collectively or by the state, and a central planning authority makes the key production and distribution decisions rather than leaving them to market prices.
Medium
3. What term describes the market failure where a firm operating in an unregulated free market economy dominates an industry and can restrict output or raise prices without effective competition?
Answer: A monopoly — A monopoly is a market failure commonly cited as a disadvantage of an unregulated free market system, since a dominant single firm can restrict output or raise prices without the discipline of competition.
