#1
Which of the following is a basic principle of economics?
Scarcity
ExplanationResources are limited while wants are unlimited.
#2
What does the 'law of demand' state?
As the price of a good increases, the quantity demanded decreases.
ExplanationInverse relationship between price and quantity demanded.
#3
What is the term for the increase in the general level of prices over a period of time?
Inflation
ExplanationRise in the price level.
#4
In economics, what does the 'law of supply' state?
As the price of a good increases, the quantity supplied increases.
ExplanationDirect relationship between price and quantity supplied.
#5
What is the term for the situation where a government spends more money than it receives as revenue, leading to increased borrowing?
Deficit spending
ExplanationGovernment expenditure exceeding revenue.
#6
What is the term for the total amount of money a company receives from selling its goods or services?
Revenue
ExplanationIncome from sales.
#7
What is the term used to describe the total value of all goods and services produced within a country in a given period?
Gross Domestic Product (GDP)
ExplanationMeasure of a nation's economic performance.
#8
In economics, what does 'elasticity' measure?
The responsiveness of quantity demanded to changes in price.
ExplanationDegree of responsiveness of demand to price changes.
#9
What does the term 'opportunity cost' refer to in economics?
The value of the next best alternative foregone
ExplanationCost of the next best alternative.
#10
Which of the following is a characteristic of a perfectly competitive market?
There are many sellers and many buyers
ExplanationLarge number of buyers and sellers with identical products.
#11
Which economic indicator measures the percentage of people who are willing and able to work, but cannot find employment?
Unemployment Rate
ExplanationPercentage of unemployed workforce.
#12
What is the primary role of the Federal Reserve System in the United States?
Conducting monetary policy
ExplanationRegulating the nation's monetary system.
#13
What is the concept that describes a market situation where a single seller dominates the entire market for a particular product?
Monopoly
ExplanationMarket structure with a single seller.