Economic Principles and Consumption Patterns Quiz

Test your knowledge with 16 questions covering demand, market types, taxation, utility, and more.

Practice Learn Test

Which of the following is not a determinant of demand?

Income of consumers

Price of the product

Government regulations

Consumer preferences

What does the law of demand state?

As the price of a good increases, quantity demanded increases

As the price of a good increases, quantity demanded decreases

As the price of a good decreases, quantity demanded increases

As the price of a good decreases, quantity demanded decreases

What does the term 'opportunity cost' refer to in economics?

The total cost of producing a good or service

The value of the next best alternative foregone

The cost of raw materials and labor

The cost of advertising and promotion

What is the law of diminishing marginal utility?

As consumption of a product increases, the marginal utility increases

As consumption of a product increases, the marginal utility decreases

As consumption of a product decreases, the marginal utility increases

As consumption of a product decreases, the marginal utility decreases

What is the difference between a fixed cost and a variable cost?

Fixed costs vary with the level of production, while variable costs remain constant

Fixed costs remain constant regardless of the level of production, while variable costs vary with the level of production

Fixed costs include raw materials, while variable costs include rent and utilities

Fixed costs are associated with short-term production, while variable costs are associated with long-term production

What is the concept of utility in economics?

The total satisfaction or pleasure derived from consuming goods and services

The price of goods and services in the market

The cost of production

The measure of consumer preferences

Which of the following is a characteristic of a perfectly competitive market?

Numerous buyers and sellers

Homogeneous products

Price makers

Barriers to entry

What is the concept of elasticity in economics?

The measure of how much quantity demanded responds to a change in price

The measure of how much quantity supplied responds to a change in price

The measure of how much total revenue changes when price changes

The measure of how much consumer preferences change over time

What is the difference between microeconomics and macroeconomics?

Microeconomics studies individual markets, while macroeconomics studies the economy as a whole

Microeconomics studies the entire economy, while macroeconomics focuses on individual markets

Microeconomics analyzes government policies, while macroeconomics analyzes consumer behavior

Microeconomics focuses on international trade, while macroeconomics studies domestic markets

#10

What is the 'invisible hand' concept in economics?

The idea that individuals pursuing their self-interest can benefit society as a whole

The role of government in controlling market activities

The process of firms colluding to set prices

The effect of globalization on local markets

#11

Which of the following is an example of a regressive tax?

Income tax

Sales tax

Property tax

Corporate tax

#12

What is the difference between a normal good and an inferior good?

Normal goods have an income elasticity of demand greater than 1, while inferior goods have an income elasticity of demand less than 1

Normal goods have a positive income elasticity of demand, while inferior goods have a negative income elasticity of demand

Normal goods have a negative income elasticity of demand, while inferior goods have a positive income elasticity of demand

Normal goods are necessities, while inferior goods are luxuries

#13

What is the formula for calculating price elasticity of demand?

Percentage change in quantity demanded / Percentage change in price

Percentage change in price / Percentage change in quantity demanded

Percentage change in quantity demanded * Percentage change in price

Percentage change in price * Percentage change in quantity demanded

#14

What is the Phillips curve in economics?

A graphical representation of the relationship between inflation and unemployment

A measure of income inequality

A theory of consumer behavior

A model of economic growth

#15

What is the difference between monetary policy and fiscal policy?

Monetary policy involves changes in government spending and taxation, while fiscal policy involves changes in the money supply and interest rates

Monetary policy involves changes in the money supply and interest rates, while fiscal policy involves changes in government spending and taxation

Monetary policy focuses on stabilizing the economy in the short term, while fiscal policy focuses on long-term economic growth

Fiscal policy is implemented by the central bank, while monetary policy is implemented by the government

#16

What is the difference between a recession and a depression?

A recession is a short-term economic downturn, while a depression is a long-term economic downturn

A recession is a severe economic downturn, while a depression is a less severe economic downturn

A recession is characterized by high unemployment, while a depression is characterized by low consumer confidence

A recession is caused by external factors, while a depression is caused by internal factors