#1
Which economic principle states that individuals and firms make decisions based on maximizing their own self-interest?
Invisible hand
ExplanationUnseen market forces guiding self-interest to promote the overall good
#2
In economics, what does GDP stand for?
Gross Domestic Product
ExplanationTotal market value of all final goods and services produced within a country in a specific period
#3
In international trade, what does the acronym WTO stand for?
World Trade Organization
ExplanationInternational organization regulating global trade rules and agreements
#4
What is the law of demand?
As price increases, quantity demanded decreases
ExplanationInverse relationship between price and quantity demanded
#5
Which economic system relies on the forces of supply and demand to allocate resources and determine prices?
Market economy
ExplanationEconomic system guided by market forces without central planning
#6
According to the law of demand, what happens to the quantity demanded when the price of a good decreases?
Increases
ExplanationDirect relationship between price decrease and quantity demanded increase
#7
Which economic concept represents the additional satisfaction or utility derived from consuming one more unit of a good or service?
Marginal utility
ExplanationResponsiveness of the quantity demanded to a change in price
#8
What is the term for a situation where the quantity demanded for a good is greater than the quantity supplied at a specific price?
Shortage
ExplanationExcess demand at a specific price
#9
What is the term for a tax that takes a larger percentage of income from high-income earners than from low-income earners?
Progressive tax
ExplanationTaxation proportional to income, with higher rates for higher incomes
#10
Which economic term refers to the total market value of all final goods and services produced within a country in a specific period?
Gross Domestic Product
ExplanationTotal value of a country's production in a specific time frame
#11
What does the term 'invisible hand' refer to in economics?
Unseen market forces guiding self-interest to promote the overall good
ExplanationUnseen market forces guiding self-interest for collective benefit
#12
Which economic concept describes the responsiveness of the quantity demanded of a good to a change in its price?
Elasticity
ExplanationSensitivity of quantity demanded to price changes
#13
According to the theory of comparative advantage, what should nations specialize in?
Producing what they can sell at the lowest cost
ExplanationSpecializing in producing goods with the lowest opportunity cost
#14
What is the primary purpose of antitrust laws?
To prevent unfair business practices and promote competition
ExplanationPreventing monopolistic behavior and fostering market competition
#15
What economic term refers to the total value of a nation's exports minus the total value of its imports?
Trade deficit
ExplanationNegative balance between a nation's exports and imports
#16
According to the law of diminishing marginal returns, what happens as additional units of a variable input are added to a fixed input?
Total output increases at a decreasing rate
ExplanationDiminishing returns with each additional unit of variable input
#17
What is the Phillips Curve in economics primarily used to analyze?
Inflation and unemployment
ExplanationAnalyzing the trade-off between inflation and unemployment
#18
What is the term for a situation where the production of one good requires a larger quantity of resources compared to another?
Absolute advantage
ExplanationAbility to produce a good using fewer resources compared to others