#1
1. What is the law of demand in economics?
As price decreases, quantity demanded increases.
ExplanationInverse relationship between price and quantity demanded.
#2
6. What does the term 'elasticity' measure in economics?
The responsiveness of quantity demanded to a change in price.
ExplanationSensitivity of demand to price changes.
#3
11. What is the Tragedy of the Commons in economics?
A situation where individuals act in their own self-interest, depleting shared resources and leading to a negative outcome for everyone.
ExplanationOveruse of common resources leading to depletion.
#4
16. What is the concept of 'marginal cost' in economics?
The additional cost of producing one more unit of a good or service.
ExplanationCost of producing one additional unit.
#5
21. What is the concept of 'moral hazard' in the context of economics and finance?
The risk that individuals or institutions may take greater risks because they do not have to bear the full consequences of those risks.
ExplanationRisk-taking due to limited consequences.
#6
2. Which of the following is a measure of a country's economic output?
Gross Domestic Product (GDP)
ExplanationIndicator of a nation's economic performance.
#7
3. What is the opportunity cost of a decision?
The value of the best alternative forgone.
ExplanationCost of choosing one option over another.
#8
7. Which economic system is characterized by government ownership of the means of production?
Communism
ExplanationState control over production.
#9
8. What is the Phillips Curve in economics used to represent?
The relationship between inflation and unemployment.
ExplanationTrade-off between inflation and unemployment rates.
#10
12. What is the main function of central banks in a country's economy?
To conduct monetary policy and control the money supply.
ExplanationRegulating money circulation and interest rates.
#11
13. In the context of international trade, what is a tariff?
A tax imposed on exports.
ExplanationTax on imported or exported goods.
#12
4. In macroeconomics, what does the term 'inflation' refer to?
Increase in the overall price level of goods and services.
ExplanationRise in general price levels.
#13
5. According to the law of diminishing marginal utility, what happens as a person consumes more units of a good or service?
Marginal utility decreases.
ExplanationDecline in additional satisfaction gained.
#14
9. What is the difference between a progressive tax and a regressive tax?
Progressive tax takes a higher percentage from higher incomes, while regressive tax takes a higher percentage from lower incomes.
ExplanationTax rates based on income levels.
#15
10. What is the concept of 'comparative advantage' in international trade?
The ability of a country to produce a good at a lower opportunity cost than another country.
ExplanationEfficiency in producing goods relative to others.
#16
14. What is the concept of 'perfect competition' in microeconomics?
A market structure with many buyers and sellers, homogeneous products, and free entry and exit.
ExplanationIdeal market scenario with no market power.
#17
15. What is the difference between fiscal policy and monetary policy?
Fiscal policy involves changes in government spending and taxation, while monetary policy involves changes in the money supply.
ExplanationGovernment vs. central bank interventions in the economy.