O LevelEconomicsCambridge (CIE)Exam Questions2. The Allocation of Resources2.10 Mixed Economic System

Syllabus Edition

First teaching 2025

First exams 2027

Mixed Economic System (Cambridge (CIE) O Level Economics): Exam Questions

Exam code: 2281

1 hour27 questions

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2.10 Mixed Economic System

11 mark

The government has an important role in mixed economies. Which function would it not perform?

  • distributing dividends from profits of state-owned enterprises

  • employing workers to collect taxes

  • investing in transport infrastructure projects

  • producing goods in public corporations

Choose your answer

21 mark

A government subsidised a new factory in a rural area to create jobs. It also provided training courses at a college. Objectors claimed the development would destroy an area of natural beauty.

What concepts are involved in this statement?

  • economic growth, resource allocation, free market equilibrium

  • government intervention, monetary policy, opportunity cost

  • public good, market prices, fiscal policy

  • supply-side policy, negative externalities, factors of production

Choose your answer

31 mark

The managers of a firm have to discuss the following topics.

Which topic is least likely to be directly affected by the government’s influence on the firm?

  • health and safety laws

  • replacing one of its managers

  • the interest it pays on borrowed money

  • the minimum wage it must pay its workers

Choose your answer

41 mark

Governments sometimes intervene in the economy when the market fails.

What is the most likely reason why government intervention may make the situation worse?

  • Government decisions can take a long time to have an effect.

  • Governments consider the views of both consumers and producers.

  • Governments have more resources to calculate costs and benefits than private firms.

  • Governments may take decisions to reduce negative externalities.

Choose your answer

51 mark

Which of the following best describes a mixed economic system?

  • A system where the government controls all economic activities

  • A system where all economic decisions are made by private individuals and firms

  • A system that combines elements of both market and planned economies

  • A system that relies solely on the price mechanism for resource allocation

Choose your answer

61 mark

Which situation indicates a mixed economy?

  • Economic activity is controlled entirely by the private sector.

  • Individual choices are unaffected by government actions.

  • Services are provided by both private and public sectors.

  • The government carries out all planning and decision making.

Choose your answer

71 mark

What distinguishes a mixed economic system from a market economy?

  • Absence of private property rights

  • Complete government control of resources

  • Lack of consumer choices

  • Government intervention in certain sectors

Choose your answer

81 mark

Which economic system combines elements of both a market economy and a planned economy?

  • Command economy

  • Mixed economy

  • Primary economy

  • Secondary economy

Choose your answer

91 mark

A key advantage of a mixed economic system is:

  • Complete elimination of monopolies and market power

  • Enhanced economic efficiency without government oversight

  • Provision of public goods without government funding

  • Ability to address externalities and market failures

Choose your answer

101 mark

One disadvantage of a mixed economic system is:

  • Excessive government intervention leading to inefficiency

  • Inability to ensure equitable income distribution

  • Elimination of unemployment through government programs

  • Decreased consumer protection due to market competition

Choose your answer

111 mark

What role does the private sector play in a mixed economic system?

  • It controls all economic activities

  • It has no influence on resource allocation

  • Along with the government it is also involved in resource allocation

  • It is completely excluded from economic decision-making

Choose your answer

121 mark

Which of the following is not an example of government intervention in a mixed economy?

  • Allowing the price mechanism to allocate resources

  • Providing subsidies to firms

  • Taxing household income

  • Limiting international trade

Choose your answer

131 mark

One of the reasons for adopting a mixed economic system is:

  • Elimination of public goods

  • Ensuring absolute private ownership of resources

  • Balancing economic growth and income redistribution

  • Promoting monopolies through unrestricted competition

Choose your answer

141 mark

In a mixed economic system, the government's role includes:

  • Eliminating all competition to ensure fairness

  • Controlling prices of all goods and services

  • Prohibiting private ownership of businesses

  • Addressing market failures and promoting public interest

Choose your answer

151 mark

In a mixed economic system, government intervention is primarily aimed at:

  • Completely replacing market forces

  • Correcting market failures and promoting social welfare

  • Reducing consumer choices

  • Eliminating private ownership of resources

Choose your answer