#1
What is the concept of 'opportunity cost' in economics?
The value of the best alternative forgone in order to choose one option
ExplanationThe benefit sacrificed when choosing one option over another.
#2
Which economic indicator is often considered a measure of a country's standard of living?
Gross Domestic Product (GDP)
ExplanationTotal value of goods and services produced within a country.
#3
Which economic system relies on market forces to determine prices and allocate resources?
Capitalism
ExplanationPrivate ownership and decentralized decision-making.
#4
In the context of market structures, which type of market has the least degree of competition?
Monopoly
ExplanationSingle seller dominating the market.
#5
In the context of economic indicators, what does the 'Consumer Confidence Index' measure?
The likelihood of consumers making significant purchases
ExplanationConsumer sentiment regarding the economy.
#6
In finance, what is the primary role of an 'options contract'?
To grant the right to buy or sell an asset at a predetermined price
ExplanationFinancial derivative granting the holder the right to buy or sell.
#7
Which of the following is a characteristic of a perfectly competitive market?
Price taker
ExplanationFirms have no influence on market price.
#8
What does the term 'elasticity of demand' measure?
Sensitivity of quantity demanded to price changes
ExplanationThe responsiveness of demand to price fluctuations.
#9
What is the law of diminishing marginal returns in economics?
As production increases, additional input yields smaller increases in output
ExplanationAdding more of a variable input to fixed inputs eventually decreases the marginal product of the variable input.
#10
What is the main goal of antitrust laws in economics?
To promote fair competition and prevent monopolistic practices
ExplanationMaintain competition and prevent market dominance.
#11
What is the primary function of the World Trade Organization (WTO) in the global economy?
Promoting international trade and resolving trade disputes
ExplanationFacilitating global trade agreements and settling disputes.
#12
In finance, what does the term 'liquidity' refer to?
The ease of converting an asset into cash without affecting its price
ExplanationAbility to convert assets into cash quickly and without significant loss.
#13
In macroeconomics, what is the primary focus of fiscal policy?
Stabilizing employment and economic growth
ExplanationUsing government spending and taxation to manage economy-wide conditions.
#14
In the context of supply and demand, what happens when the government imposes a price ceiling below the equilibrium price?
Shortage
ExplanationQuantity demanded exceeds quantity supplied.
#15
What is the difference between monetary policy and fiscal policy?
Monetary policy involves changes in interest rates and money supply, while fiscal policy involves changes in government spending and taxation
ExplanationControl over money supply versus government spending and taxation.
#16
What is the Phillips Curve in economics?
A curve showing the relationship between inflation and unemployment
ExplanationHistorical inverse relationship between unemployment and inflation.
#17
What is the concept of 'comparative advantage' in international trade?
The ability of a country to produce a good with fewer resources than another country
ExplanationEfficiency in production relative to other nations.
#18
What is the meaning of the term 'Gini coefficient' in economics?
A measure of income inequality within a population
ExplanationStatistical measure of income distribution.