Economic Analysis and Values Quiz

Perfect competition involves many buyers and sellers.

GDP stands for Gross Domestic Product.

Opportunity cost is the value of the next best alternative foregone when a decision is made.

Inflation refers to the rise in the general price level of goods and services over time.

A public transportation system is an example of a public good.

Fiscal policy involves the government's use of taxation and spending to regulate the economy.

Monetary policy aims to stabilize prices.

Price Elasticity of Demand is calculated by dividing the percentage change in quantity demanded by the percentage change in price.

Microeconomics focuses on individual markets, whereas macroeconomics examines the economy as a whole.

A sales tax is an example of a regressive tax.

The law of diminishing marginal utility states that as consumption of a good increases, the additional satisfaction gained from each additional unit decreases.

A recession is an extended period of economic decline, while a depression is a severe and prolonged economic downturn.

Education is an example of a positive externality.

Ceteris paribus means holding all other factors constant.

The 'invisible hand' refers to the concept that self-interested behavior can lead to positive outcomes for society as a whole in a competitive market.