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The allocation of resources

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Question 1

Which of the following correctly describes how the allocation of resources differs between a pure command economy and a mixed economy?

A

In a pure command economy, the state uses indirect taxation to alter the price mechanism's allocation of resources, whereas in a mixed economy, the state directly sets all prices and output levels.

B

In a pure command economy, resource allocation is determined entirely by state planning and administrative directives, whereas in a mixed economy, resources are allocated through a combination of the market price mechanism and government intervention.

C

In a pure command economy, resources are allocated solely to maximize consumer sovereignty, whereas in a mixed economy, resources are allocated to maximize state tax revenue.

D

In a pure command economy, the allocation of resources is guided by the signalling and incentive functions of prices, whereas in a mixed economy, prices serve no allocative function.

Markscheme

The allocation of resources Questions

  1. A Level
  2. /Economics
  3. /The allocation of resources

31 exam-style questions on OCR A Level Economics The allocation of resources. Each one has a worked solution and a mark scheme showing where the marks go.

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