3.1.2.3 Role of government in resource allocation

• Supply indicates the amount of goods available at each price level
• When demand for a product increases, its price rises, incentivizing producers to increase production.


  True
• Order the steps in resource allocation based on supply and demand:

  1️⃣ Demand for a product increases

  2️⃣ Price of the product rises

  3️⃣ Producers increase production

  4️⃣ Resources are reallocated to meet demand
• What is the key feature of resource allocation in a free market economy?

  Prices guide allocation
• In a mixed economy, resources are allocated through a combination of market forces and government regulation
• What role do market prices play in resource allocation?

  Guiding producers
• Match the component of the market with its role in resource allocation:

  Supply ↔️ Indicates goods available at each price

  Demand ↔️ Represents consumer willingness to buy

  Market Price ↔️ Balances supply and demand
• Regulation is a type of government intervention where rules and standards influence how resources are used
• Public provision is a type of government intervention where the government directly provides goods and services.


  True
• How does income redistribution address inequality?

  Progressive taxation
• Government intervention can reduce efficiency by distorting price signals
• What is a political cost of government intervention in resource allocation?

  Political influence
• The government must weigh the benefits and costs of intervention to ensure efficient resource allocation.


  True
• Resource allocation depends on the type of system
• In a free market, producers respond to consumer demand.


  True
• What role do market prices play in resource allocation?

  Guiding producers
• The market ensures efficient allocation and responsiveness to consumer preferences
• Match the type of government intervention with its description:

  Regulation ↔️ Sets rules and standards

  Taxation ↔️ Encourages or discourages activities

  Public Provision ↔️ Directly provides goods and services

  Income Redistribution ↔️ Addresses inequality
• Government intervention corrects market failures
• What is an example of a public good provided by the government?

  Infrastructure
• Order the key features of different economic systems:

  1️⃣ Free Market: Producers respond to consumer demand

  2️⃣ Planned Economy: Central planning authorities direct resources

  3️⃣ Mixed Economy: Balances market efficiency with government regulation
• In a free market, prices act as signals to guide producers
• What type of government intervention is a tax on carbon emissions?

  Taxation
• What is resource allocation?

  Distributing scarce resources
• In a free market economy, resources are allocated by market prices and demand
• A planned economy aims for equitable distribution but can be inefficient.


  True
• Match the economic system with its resource allocation mechanism:

  Free Market ↔️ Market prices and demand

  Planned Economy ↔️ Government control

  Mixed Economy ↔️ Combination of market and government
• What guides producers in allocating resources in a market economy?

  Market prices
• What is resource allocation?

  Distributing scarce resources
• What guides resource allocation in a free market?

  Market prices and demand
• A planned economy uses government control
• A mixed economy balances free market efficiency with government regulation.


  True
• Match the economic system with its resource allocation mechanism:

  Free Market ↔️ Market prices and demand

  Planned Economy ↔️ Government control

  Mixed Economy ↔️ Combination of market and government
• Government regulation is a type of intervention in resource allocation.


  True
• How does taxation influence resource allocation?

  Discourages certain activities
• Reduced efficiency is a potential cost of government intervention.


  True