#1
Which of the following is a basic economic problem?
Scarcity
ExplanationResources are limited while human wants are infinite.
#2
What does GDP stand for?
Gross Domestic Product
ExplanationTotal value of all goods and services produced within a country's borders.
#3
What is inflation?
An increase in the price level of goods and services
ExplanationGeneral rise in prices leading to a decrease in purchasing power.
#4
What is the primary goal of a for-profit business?
To maximize shareholder value
ExplanationGenerate profits for shareholders.
#5
Which concept is central to understanding the working of the stock market?
Supply and demand
ExplanationInteraction between buyers and sellers determining prices.
#6
What type of business structure is owned and operated by one individual?
Sole proprietorship
ExplanationSingle ownership with full control and liability.
#7
What is the primary function of the World Bank?
To provide financial and technical assistance to developing countries
ExplanationSupporting economic development and poverty reduction in developing nations.
#8
Which market structure is characterized by a single seller and no close substitutes for the product?
Monopoly
ExplanationComplete control over the market with no competition.
#9
In economics, the opportunity cost is defined as:
The cost of not choosing the next best alternative
ExplanationThe value of the next best alternative forgone when a decision is made.
#10
Which of the following best defines a 'bear market'?
A market in which stock prices are falling
ExplanationPeriod of declining stock prices.
#11
What does the term 'liquidity' refer to in financial markets?
The ease with which an asset can be converted into cash
ExplanationAbility to convert assets into cash quickly without significant loss in value.
#12
Which of the following is a characteristic of oligopolistic markets?
Significant barriers to entry
ExplanationFew large firms dominating the market with high barriers for new entrants.
#13
What does the 'invisible hand' refer to in Adam Smith's economic theory?
The self-regulating nature of the marketplace
ExplanationMarket forces guiding resources allocation without centralized control.
#14
The Law of Demand states that:
There is an inverse relationship between the price of a good and the quantity demanded
ExplanationAs price decreases, quantity demanded increases, and vice versa.
#15
Which of the following best describes a 'mixed economy'?
An economy that features both private and public ownership of businesses and services
ExplanationCombination of free market principles and government intervention.
#16
In the context of international trade, what does 'comparative advantage' mean?
A country's ability to produce a particular good at a lower opportunity cost than other countries
ExplanationProducing goods at a lower opportunity cost than others.
#17
What principle does the Pareto Efficiency concept illustrate?
Resources are distributed in such a way that it is impossible to make any one individual better off without making at least one individual worse off
ExplanationOptimal allocation where no one can be made better off without making someone else worse off.
#18
What is the main purpose of anti-trust laws?
To prevent and reduce the practice of monopolies and ensure competition
ExplanationPromote fair competition and prevent monopolistic practices.
#19
What principle is demonstrated by the Laffer Curve in economics?
There is an optimal tax rate above which government revenue begins to decrease
ExplanationIllustrates the relationship between tax rates and government revenue.