#1
Which of the following is an example of a trade-off in economics?
Choosing to produce more cars at the expense of producing fewer trucks
Increasing government spending without increasing taxes
Implementing a price ceiling to control inflation
Providing subsidies to encourage renewable energy production
#2
What is the opportunity cost of a decision?
The monetary cost incurred
The value of the next best alternative forgone
The total benefits gained
The total resources used
#3
What is the primary function of the Federal Reserve System in the United States?
Regulating international trade
Issuing currency and controlling the money supply
Collecting federal taxes
Setting fiscal policy
#4
Which of the following is an example of a positive externality?
Pollution from a factory affecting nearby residents' health
A beekeeper providing pollination services to nearby farms
A firm emitting greenhouse gases into the atmosphere
An individual purchasing a new car
#5
What is the law of diminishing returns?
As production increases, the marginal product of labor decreases
As production increases, the total product of labor decreases
As production decreases, the marginal product of labor increases
As production decreases, the total product of labor increases
#6
Which of the following is NOT a factor of production?
Labor
Money
Capital
Entrepreneurship
#7
What is the law of demand?
As price increases, quantity demanded increases
As price decreases, quantity demanded decreases
As price increases, quantity demanded decreases
As price decreases, quantity demanded increases
#8
In economic decision-making, the term 'marginal' refers to:
The total cost of production
The additional benefit or cost of one more unit of a good or service
The average cost per unit
The fixed cost
#9
Which of the following is NOT a characteristic of perfect competition?
Many buyers and sellers
Homogeneous products
Barriers to entry and exit
Perfect information
#10
What is the formula for calculating price elasticity of demand?
Percentage change in quantity demanded / Percentage change in price
Percentage change in price / Percentage change in quantity demanded
Total quantity demanded / Total price
Total price / Total quantity demanded
#11
Which of the following is NOT a characteristic of monopolistic competition?
Many buyers and sellers
Product differentiation
Barriers to entry and exit
Some degree of market power
#12
What is the primary tool used by the government to address market failures?
Taxation
Subsidies
Regulation
All of the above
#13
Which of the following is an example of a public good?
A private beach resort
A toll road
National defense
Cable television
#14
What is the difference between nominal GDP and real GDP?
Nominal GDP is adjusted for inflation, while real GDP is not
Real GDP is adjusted for inflation, while nominal GDP is not
Nominal GDP includes only current market prices, while real GDP includes constant prices
Real GDP includes only current market prices, while nominal GDP includes constant prices
#15
What is the concept of diminishing marginal utility?
As more of a good is consumed, the satisfaction derived from each additional unit decreases
As more of a good is consumed, the price of each additional unit increases
As more of a good is consumed, the total satisfaction remains constant
As more of a good is consumed, the total satisfaction increases proportionally
#16
What is the primary goal of fiscal policy?
Stabilizing employment and prices
Controlling inflation through monetary policy
Regulating international trade
Issuing currency and controlling the money supply
#17
What is the formula for calculating GDP (Gross Domestic Product)?
Consumption + Investment + Government spending + Exports - Imports
Consumption + Investment + Exports - Imports
Consumption + Government spending + Exports - Imports
Consumption + Investment + Government spending
#18
What is the formula for calculating unemployment rate?
(Number of unemployed / Labor force) × 100%
(Number of employed / Labor force) × 100%
(Number of unemployed / Number of employed) × 100%
(Labor force / Number of employed) × 100%
#19
What is the Laffer Curve used to illustrate?
The relationship between tax rates and tax revenue
The relationship between government spending and economic growth
The relationship between inflation and unemployment
The relationship between interest rates and investment