#1
In economics, what does the term 'GDP' stand for?
Gross Domestic Product
ExplanationTotal value of goods and services produced in a country.
#2
What is the formula for calculating total revenue?
Price × Quantity Demanded
ExplanationTotal income from sales of a product.
#3
Which of the following is NOT a factor of production?
Money
ExplanationMedium of exchange rather than a factor of production.
#4
What is the 'law of demand'?
As price increases, quantity demanded decreases
ExplanationInverse relationship between price and quantity demanded.
#5
Which of the following is NOT a characteristic of a perfectly competitive market?
Barrier to entry
ExplanationLack of barriers allows for many competitors.
#6
What is the 'law of diminishing marginal utility'?
As consumption of a product increases, its marginal utility decreases
ExplanationEach unit consumed adds less satisfaction.
#7
Which of the following is a characteristic of monopolistic competition?
Easy entry and exit of firms
ExplanationFirms can enter and leave the market freely.
#8
What is the primary function of the Federal Reserve System in the United States?
Monetary policy regulation
ExplanationControls money supply and interest rates to stabilize the economy.
#9
Which of the following is an example of a regressive tax?
Sales tax
ExplanationImposes a higher burden on low-income earners.
#10
What is the economic term for a situation where one party has more information than the other party in a transaction?
Asymmetric information
ExplanationUnequal access to information affects market efficiency.
#11
Which of the following is NOT a component of the aggregate expenditure model?
Trade balance
ExplanationDoes not directly contribute to total spending.
#12
What is the economic term for a situation where the market fails to allocate resources efficiently?
Market failure
ExplanationOccurs when market equilibrium does not lead to optimal outcomes.
#13
Which of the following is NOT a determinant of demand?
Number of sellers in the market
ExplanationSupply-side factor.
#14
Which of the following is an example of a public good?
Electricity
ExplanationNon-excludable and non-rivalrous good.
#15
What is the concept of 'comparative advantage' in international trade?
When a country can produce a good at a lower opportunity cost than another country
ExplanationAbility to produce goods or services at a lower opportunity cost.
#16
Which of the following is an example of a positive externality?
Education benefits spilling over to society
ExplanationAdditional societal gains beyond the direct participants.
#17
What is the formula for calculating price elasticity of demand?
Percentage change in quantity demanded divided by percentage change in price
ExplanationMeasures responsiveness of quantity demanded to price changes.
#18
In economics, what is the 'Phillips curve' used to describe?
The relationship between inflation and unemployment
ExplanationTrade-off relationship between inflation and unemployment.
#19
What is the formula for calculating average variable cost?
Total variable cost / Quantity produced
ExplanationCost per unit of variable inputs.