#1
Which of the following best defines the law of supply in economics?
As prices decrease, quantity supplied increases.
ExplanationInverse relationship between price and quantity supplied.
#2
What does GDP stand for in economics?
Gross Domestic Product
ExplanationTotal value of goods and services produced in a country.
#3
Which of the following is a characteristic of a perfectly competitive market?
Many buyers and many sellers
ExplanationLarge number of buyers and sellers with no market power.
#4
What is the economic term for a situation where a good or service is unavailable due to excess demand?
Shortage
ExplanationInsufficient supply to meet demand.
#5
What is the economic term for the total value of all goods and services produced within a country's borders in a specific time period?
Gross Domestic Product (GDP)
ExplanationSum of all goods and services produced within a nation.
#6
What is the term for the increase in the general level of prices of goods and services over time?
Inflation
ExplanationRise in price levels over a period.
#7
In economics, what does the term 'market equilibrium' refer to?
The point where quantity demanded equals quantity supplied
ExplanationBalance of supply and demand in a market.
#8
What does the term 'opportunity cost' refer to in economics?
The cost of forgoing the next best alternative
ExplanationCost of the next best alternative that is forgone.
#9
In the context of economics, what does the term 'inflation' mean?
An increase in the overall level of prices
ExplanationRise in the general price level of goods and services.
#10
What is the primary function of a central bank in an economy?
To regulate monetary policy
ExplanationRegulation of money supply and interest rates.
#11
Which of the following is not a factor of production?
Technology
ExplanationMeans by which goods and services are produced.
#12
What is the main difference between a monopoly and an oligopoly?
The number of firms in the market
ExplanationNumber of firms controlling the market.
#13
What does the term 'marginal utility' represent in economics?
The additional satisfaction gained from consuming one more unit of a good or service
ExplanationExtra satisfaction from consuming an additional unit.
#14
In economics, what does the term 'externality' refer to?
The cost or benefit that affects a party who did not choose to incur that cost or benefit
ExplanationImpact on third parties from production/consumption.
#15
What is the concept of 'elasticity' in economics?
The measure of responsiveness of quantity demanded to a change in price
ExplanationSensitivity of quantity demanded to price changes.
#16
What is the 'invisible hand' in economics, as coined by Adam Smith?
The self-interest and competition guiding resources to their most efficient uses
ExplanationUnintended social benefits of individual actions.
#17
What is the concept of 'comparative advantage' in economics?
The ability of a country to produce a good at a lower opportunity cost than another country
ExplanationCapability to produce a good with lower opportunity cost.
#18
What is the economic term for a situation where the price of one good increases, leading to a decrease in the demand for another related good?
Substitution effect
ExplanationChange in demand for one good due to price change in another.