#1
What is the basic economic problem?
Scarcity
ExplanationResources are limited, but wants and needs are infinite.
#2
Which of the following is not considered a factor of production?
Technology
ExplanationIt's a facilitator of production, not a factor.
#3
What does the term 'ceteris paribus' mean in economics?
All other things being equal
ExplanationUsed to isolate effects of one variable.
#4
Which of the following is a macroeconomic variable?
Total employment in an economy
ExplanationExamines economy-wide phenomena.
#5
What is the law of demand?
As price decreases, quantity demanded increases
ExplanationInverse relationship between price and quantity demanded.
#6
What does GDP stand for?
Gross Domestic Product
ExplanationTotal value of all goods and services produced within a country in a given period.
#7
Who is considered the father of modern economics?
Adam Smith
ExplanationAuthor of 'The Wealth of Nations', advocating free market.
#8
What is opportunity cost?
The cost of choosing one alternative over another
ExplanationValue of the next best alternative foregone.
#9
Which of the following is a characteristic of a perfectly competitive market?
A large number of firms selling identical products
ExplanationNo single firm can influence market price.
#10
What is the role of the Federal Reserve in the United States?
Manage monetary policy
ExplanationControl money supply and interest rates.
#11
What is the formula to calculate Price Elasticity of Demand (PED)?
Percentage change in quantity demanded / Percentage change in price
ExplanationMeasures responsiveness of quantity demanded to price changes.