#1
What is the concept of 'opportunity cost' in economics?
The cost of alternatives foregone
ExplanationOpportunity cost refers to the value of the next best alternative.
#2
What does the term 'GDP' stand for in economics?
Gross Domestic Product
ExplanationGDP measures the total value of goods and services produced.
#3
What is the main goal of fiscal policy?
To stabilize the economy
ExplanationFiscal policy aims to stabilize economic fluctuations.
#4
What is the difference between microeconomics and macroeconomics?
Microeconomics focuses on individual markets, while macroeconomics focuses on the overall economy
ExplanationMicroeconomics studies individual markets, while macroeconomics examines the whole economy.
#5
What does the term 'Inflation' refer to in economics?
An increase in the general price level of goods and services
ExplanationInflation represents a general rise in prices.
#6
Which of the following is not a characteristic of perfect competition?
Barriers to entry
ExplanationPerfect competition implies no barriers to entry.
#7
What is the primary function of a central bank?
Monetary policy implementation
ExplanationCentral banks implement monetary policies.
#8
Which of the following is a characteristic of monopolistic competition?
Product differentiation
ExplanationMonopolistic competition involves product differentiation.
#9
What is the equation for the price elasticity of demand?
Percentage change in price divided by percentage change in quantity demanded
ExplanationPrice elasticity of demand measures responsiveness.
#10
In economics, what does the term 'Ceteris Paribus' mean?
All else being constant
ExplanationCeteris Paribus assumes other factors remain unchanged.
#11
Which economic theory suggests that governments should increase spending during economic downturns?
Keynesian economics
ExplanationKeynesian economics advocates for increased government spending during downturns.
#12
What does the 'Laffer Curve' illustrate?
The relationship between tax rates and government revenue
ExplanationThe Laffer Curve shows the tradeoff between tax rates and revenue.
#13
Which of the following is a characteristic of a perfectly elastic demand?
Consumers are willing to buy any quantity at the given price
ExplanationIn perfectly elastic demand, quantity demanded is infinite at a given price.