Paper 3 · June 2025 · Economic Systems
In a mixed economy, the question of what to produce is settled for ordinary private goods mainly by
Aa national plan drawn up by a central planning ministry each year.
Bthe historic pattern of output, which is held steady from year to year.
Cconsumer spending, since a rising price signals profit and draws resources in.
Dan agreement among the largest firms about how to share out the market.
Explanation
In the private half of a mixed economy the price mechanism answers 'what to produce'. A rise in the price of a good raises the profit available in it, and resources move toward that profit. Planning ministries and inter-firm agreements exist in some economies, but neither is the mechanism a mixed economy relies on for ordinary private goods.
Derived from ZIMSEC Advanced Level Economics 6073/3 Paper 3 (Essays), June 2025 session, Q1