#1
What is the basic economic problem that arises due to scarcity?
Unemployment
Inflation
Opportunity cost
Government intervention
#2
What is the difference between a normal good and an inferior good?
Normal goods have higher quality than inferior goods
Normal goods are always more expensive than inferior goods
The demand for normal goods increases with income, while the demand for inferior goods decreases with income
The demand for normal goods decreases with income, while the demand for inferior goods increases with income
#3
What is the law of supply in economics?
As the price of a good decreases, the quantity supplied increases
As the price of a good increases, the quantity supplied decreases
As the price of a good increases, the quantity supplied increases
As the price of a good decreases, the quantity supplied decreases
#4
What is the difference between a recession and a depression in economics?
They are synonymous terms
A recession is a milder economic downturn than a depression
A depression is a milder economic downturn than a recession
They both refer to periods of economic growth
#5
What is the concept of 'elasticity of supply' in economics?
The responsiveness of quantity supplied to changes in price
The proportion of income spent on a good
The overall satisfaction derived from consuming a good
The responsiveness of quantity demanded to changes in price
#6
In the context of supply and demand, what happens to equilibrium price and quantity if demand increases and supply remains constant?
Price increases, quantity increases
Price decreases, quantity decreases
Price increases, quantity decreases
Price decreases, quantity increases
#7
What is the 'law of diminishing marginal utility'?
As the price of a good increases, its demand decreases
As the quantity of a good consumed increases, the additional satisfaction derived from each additional unit decreases
As the quantity of a good consumed increases, the additional satisfaction derived from each additional unit increases
As the price of a good decreases, its demand increases
#8
What does the term 'elasticity of demand' measure?
The responsiveness of quantity demanded to a change in price
The total quantity demanded in the market
The proportion of income spent on a good
The overall satisfaction derived from consuming a good
#9
How does a government budget deficit impact the economy?
Stimulates economic growth
Reduces inflation
Increases government debt
Decreases unemployment
#10
What is a 'black market' in the context of economics?
A market with low demand and low supply
An illegal market where goods are bought and sold without government regulation
A market with high government intervention
A market with perfect competition
#11
What is the role of a central bank in controlling inflation?
Increasing interest rates
Decreasing interest rates
Printing more money
Reducing taxes
#12
What is the difference between perfect competition and monopoly?
Number of firms in the market
Degree of product differentiation
Barriers to entry
All of the above
#13
What is the concept of 'opportunity cost'?
The monetary cost of an opportunity
The value of the best alternative forgone in order to pursue a particular choice
The cost of an opportunity in terms of time
The financial cost of pursuing an opportunity
#14
In the context of international trade, what does a trade surplus indicate?
A country is exporting more than it is importing
A country is importing more than it is exporting
A balance between exports and imports
A decrease in overall trade activity
#15
What is the role of fiscal policy in the economy?
Control money supply
Regulate interest rates
Influence government spending and taxation to manage economic conditions
Conduct open market operations