The allocation of goods and services in a free market economy is performed by
The price system
The banking system
The central planning body
Government budgets
Correct answer is A
In a free market economy, the price mechanism regulates production and labor. Companies sell goods and services at the highest price consumers are willing to pay while workers earn the highest wages companies are willing to pay for their services.
Any price below the equilibrium price will lead to
Increase in supply
Excess demand
Equality of demand and supply
Decreases in demand
Correct answer is B
Any price below the equilibrium price will lead to excess demand with decrease in supply. This is so because, people generally buy more of a commodity when the price is low while suppliers will want to supply more when the price is high. Hence, for a price set below equilibrium, suppliers will cut back on producing more of that commodity while demand will be high.
Derived
Composite
Joint
Competitive
Correct answer is C
Joint demand is When two or more goods are jointly demanded to satisfy single need. Example demand for cars and petrol, pens and ink, tea and sugar, etc, computers and software. If the demand for car decreases, it will also affect the demand for petrol.
Goods which have to be paid for are known as
Physical goods
Economic goods
Free goods
Intangible goods
Correct answer is B
An economic good is a consumable item that is useful to people but scarce in relation to its demand, so that human effort is required to obtain it. People work towards owning these goods because they are essential. Example include Food, clothing and housing.
The type of monopoly that develops as a result of uneven distribution of resources is called
Legal monopoly
Natural monopoly
State monopoly
International monopoly
Correct answer is A
No explanation has been provided for this answer.