#1
What is the law of demand in economics?
As prices decrease, quantity demanded decreases.
ExplanationInverse relationship between price and quantity demanded.
#2
What is a monopoly?
A market structure with one seller and many buyers.
ExplanationSingle seller dominating the market.
#3
What does GDP stand for in economics?
Gross Domestic Product
ExplanationTotal value of goods and services produced within a country.
#4
What is a subsidy?
A payment made by the government to encourage consumption.
ExplanationFinancial aid to stimulate production or consumption.
#5
What is the law of supply in economics?
As prices increase, quantity supplied increases.
ExplanationDirect relationship between price and quantity supplied.
#6
What is a black market?
A market where illegal goods and services are traded.
ExplanationUnderground economy for illicit goods and services.
#7
What is the difference between microeconomics and macroeconomics?
Microeconomics focuses on individual consumers and firms, while macroeconomics focuses on the economy as a whole.
ExplanationStudy of small-scale economic factors vs. whole economy.
#8
What is a trade barrier?
A tax imposed on imported goods.
ExplanationTariffs or quotas hindering free trade.
#9
Which of the following is not a characteristic of a perfectly competitive market?
Barriers to entry
ExplanationPerfect competition implies no barriers to entry.
#10
What is price elasticity of demand?
A measure of how responsive quantity demanded is to a change in price.
ExplanationQuantifies responsiveness of demand to price changes.
#11
What is the formula for calculating total revenue?
Price × Quantity Demanded
ExplanationTotal income from selling a given quantity of goods.
#12
What is a cartel?
A group of firms colluding to limit competition.
ExplanationConspiracy among firms to control market prices.
#13
Which of the following is a measure of income inequality?
Gini coefficient
ExplanationStatistical measure of distribution of income.
#14
What is a free market economy?
An economy with no government intervention.
ExplanationMarket forces determine production, consumption, and prices.
#15
What is the law of diminishing marginal utility?
As the quantity of a good consumed increases, its marginal utility decreases.
ExplanationDecreasing satisfaction from consuming additional units of a good.
#16
What is a fiscal policy?
Policy that involves changing tax rates and government spending.
ExplanationGovernment's use of revenue and expenditure to influence the economy.
#17
What is price discrimination?
Charging different prices to different customers based on their willingness to pay.
ExplanationVarying prices based on consumer characteristics.
#18
What is an oligopoly?
A market structure with few sellers and identical products.
ExplanationSmall number of firms dominating the market.
#19
What is the invisible hand concept in economics?
The idea that individual self-interest leads to the overall benefit of society.
ExplanationMarket self-regulation through individual actions.
#20
What is a price ceiling?
A government-imposed maximum price that sellers can charge for a good or service.
ExplanationLegal cap on prices set by the government.
#21
What is the Phillips curve?
A curve that shows the relationship between inflation and unemployment.
ExplanationTrade-off between inflation and unemployment rates.
#22
What is fiscal deficit?
The difference between government revenue and government spending.
ExplanationShortfall when government spending exceeds revenue.
#23
What is market equilibrium?
A situation where quantity demanded equals quantity supplied.
ExplanationBalance between demand and supply in the market.
#24
What is a perfectly elastic demand curve?
A demand curve that is horizontal.
ExplanationDemand is infinitely responsive to price changes.