#1
Which of the following is a basic principle of economics?
Scarcity
ExplanationResources are limited, but wants are unlimited.
#2
What does GDP stand for?
Gross Domestic Product
ExplanationTotal market value of all final goods and services produced within a country's borders.
#3
What is the term for a tax imposed on imported goods?
Tariff
ExplanationIncreases cost of imported goods, protecting domestic industries.
#4
What is a common measure of a country's standard of living?
Human Development Index (HDI)
ExplanationIndicator combining income, education, and life expectancy.
#5
Which economic concept refers to the total market value of all final goods and services produced in a country in a given period?
Gross Domestic Product (GDP)
ExplanationMeasure of a nation's economic activity.
#6
What is the term for a situation where a country's imports exceed its exports?
Trade deficit
ExplanationMore goods imported than exported, leading to imbalance.
#7
Which of the following is an example of a trade barrier?
Tariff
ExplanationA tax imposed on imported goods.
#8
What does comparative advantage suggest?
Countries should produce only what they can produce most efficiently
ExplanationSpecialization according to efficiency leads to overall benefits.
#9
What is the term for a situation where a country can produce a good at a lower cost than another country?
Absolute advantage
ExplanationCountry's superior efficiency in producing a particular good.
#10
Which organization facilitates international trade negotiations and resolves disputes between member countries?
World Trade Organization (WTO)
ExplanationEnsures smooth trade relations and resolves disputes.
#11
Which principle states that as the production of a good increases, the opportunity cost of producing an additional unit of that good also increases?
Law of increasing costs
ExplanationIncreasing production leads to diminishing returns.
#12
Which of the following is NOT a characteristic of monopolistic competition?
Perfect information
ExplanationFirms have some control over pricing due to differentiation.
#13
Which theory suggests that a country should specialize in producing goods where it has the lowest opportunity cost?
Comparative advantage theory
ExplanationSpecialization based on comparative efficiency.
#14
Which theory suggests that countries should export goods that require abundant factors of production and import goods that require scarce factors of production?
Heckscher-Ohlin theory
ExplanationTrade patterns based on resource abundance.
#15
What is the primary function of the World Bank?
Provide financial assistance for development projects
ExplanationSupports economic development in developing countries.