#1
What is the law of demand?
As prices increase, quantity demanded decreases
ExplanationHigher prices reduce consumer demand.
#2
What is the law of supply?
As prices increase, quantity supplied increases
ExplanationHigher prices motivate producers to supply more goods.
#3
What is the concept of perfect competition in economics?
A market structure with many sellers, identical products, and ease of entry and exit
ExplanationMarket structure with numerous competitors and homogeneous goods.
#4
What is the difference between elastic and inelastic demand?
Elastic demand is more responsive to price changes than inelastic demand
ExplanationElastic demand reacts more to price shifts than inelastic demand.
#5
What is a price floor?
A government-imposed minimum price that prevents prices from falling below a certain level
ExplanationSet by the government to maintain prices above a specified minimum.
#6
What is the difference between a monopoly and an oligopoly?
A monopoly has one seller, while an oligopoly has many sellers
ExplanationMonopoly: single seller; Oligopoly: few sellers.
#7
What is the concept of elasticity of supply?
The responsiveness of quantity supplied to changes in price
ExplanationHow much producers adapt to price variations.
#8
What is the Phillips Curve in economics?
A curve that shows the relationship between inflation and unemployment
ExplanationInflation and unemployment have an inverse correlation.
#9
What is the concept of a Gini coefficient?
A measure of income inequality within a population
ExplanationQuantifies the degree of income distribution inequality.
#10
What is the concept of equilibrium price and quantity in a market?
The point where quantity demanded equals quantity supplied
ExplanationBalanced market state where demand matches supply.
#11
What is a public good in economics?
A good that is non-excludable and non-rivalrous
ExplanationAccessible to all without diminishing its availability.
#12
What is the concept of deadweight loss in economics?
The loss of consumer surplus and producer surplus that occurs when a market is not in equilibrium
ExplanationLoss of economic efficiency due to market imbalance.
#13
What is the Tragedy of the Commons?
A situation where individuals, acting in their self-interest, deplete shared resources leading to the detriment of all
ExplanationExploitation of common resources harming all users.
#14
What is the multiplier effect in economics?
The effect of a change in aggregate demand on national income
ExplanationAmplification of economic changes through spending.
#15
What is the Quantity Theory of Money?
A theory that states the quantity of money determines the price level and inflation
ExplanationMoney supply influences price levels and inflation.