#1
In economics, what does the term 'opportunity cost' refer to?
The cost of an alternative that must be forgone to pursue a certain action.
ExplanationThe cost of choosing one option over another.
#2
What is the law of demand in economics?
As the price of a good increases, the quantity demanded decreases, ceteris paribus.
ExplanationInverse relationship: price up, demand down.
#3
What is the role of entrepreneurship in an economy?
To innovate and take risks in starting new businesses or introducing new products.
ExplanationEntrepreneurship: innovation, risk-taking.
#4
Which of the following is NOT a factor of production?
Technology
ExplanationFactor of production: labor, land, capital, not technology.
#5
What is fiscal policy?
The government's use of taxation and spending to influence the economy.
ExplanationGovernment's use of taxes/spending to impact economy.
#6
What is the law of supply in economics?
As the price of a good increases, the quantity supplied increases, ceteris paribus.
ExplanationDirect relationship: price up, supply up.
#7
What is the formula for calculating GDP?
Consumption + Investment + Exports - Imports
ExplanationGDP calculation: consumption, investment, exports, imports.
#8
Which of the following is NOT a type of unemployment?
Inflationary unemployment
ExplanationNot a type of unemployment: inflationary.
#9
Which of the following best defines a free market economy?
An economy where prices for goods and services are determined by supply and demand with minimal government intervention.
ExplanationMarket economy; prices set by supply & demand, little gov't intervention.
#10
Which of the following is NOT a characteristic of a monopolistic competition market structure?
Price takers.
ExplanationMonopolistic competition: firms have some control over price.
#11
What is the function of a stock exchange?
To facilitate the buying and selling of shares of publicly traded companies.
ExplanationStock exchange: trading shares of public companies.
#12
What is the main difference between a command economy and a market economy?
In a command economy, resources are allocated by the government, while in a market economy, resources are allocated by individuals and businesses.
ExplanationResource allocation: government vs. individuals/businesses.
#13
What is price elasticity of demand?
A measure of the responsiveness of quantity demanded to changes in price.
ExplanationResponsiveness of demand to price changes.
#14
Which of the following is a characteristic of perfect competition?
Price takers.
ExplanationPerfect competition: firms are price takers.
#15
Which of the following is a measure of income inequality?
Gini coefficient
ExplanationMeasure of income inequality.
#16
What is a monopoly?
A market structure with only one seller and many buyers.
ExplanationMarket structure: single seller, many buyers.
#17
What is the role of government in a mixed economy?
To regulate certain sectors and provide public goods and services.
ExplanationGovernment role: regulation, public goods/services.
#18
What is the primary goal of monetary policy?
To control inflation and stabilize prices.
ExplanationMonetary policy: inflation control, price stability.
#19
What is price discrimination in economics?
When a seller charges different prices to different customers for the same product or service.
ExplanationCharging different prices to different customers for same product.
#20
What is a cartel?
A group of firms that collude to restrict competition and control prices in a market.
ExplanationCollusion among firms to control prices, limit competition.
#21
What is the law of diminishing marginal utility?
As the quantity of a good consumed increases, the satisfaction derived from each additional unit decreases.
ExplanationDecreasing satisfaction from additional units consumed.
#22
What is an oligopoly?
A market structure with only a small number of firms dominating the market.
ExplanationMarket structure: few firms dominate.
#23
What is a subsidy in economics?
A payment made by the government to producers to lower their costs of production.
ExplanationGovernment payment to producers to lower costs.
#24
What is the primary function of a central bank in a country's economy?
To supervise and regulate the banking system.
ExplanationCentral bank: oversees & regulates banking.
#25
What does the term 'invisible hand' refer to in economics?
The concept that individuals acting in their own self-interest can lead to positive outcomes for society as a whole.
ExplanationIndividual self-interest benefits society overall.