#1
What is the law of demand in economics?
As price decreases, quantity demanded increases
ExplanationInverse relationship between price and quantity demanded
#2
What is the concept of opportunity cost?
The highest-valued alternative that must be sacrificed to engage in an activity
ExplanationValue of the next best alternative foregone
#3
In economics, what does GDP stand for?
Gross Domestic Product
ExplanationTotal value of goods and services produced in a country
#4
What does the term 'inflation' refer to in economics?
A sustained increase in the general price level of goods and services
ExplanationRise in overall price levels over time
#5
What is the formula to calculate the unemployment rate?
(Number of unemployed / Labor force) × 100
ExplanationPercentage of the labor force without jobs
#6
What is the concept of comparative advantage in international trade?
A country can produce a good at a lower opportunity cost than another country
ExplanationEfficiency in resource allocation for global trade
#7
What is the main function of a central bank?
To control interest rates
ExplanationRegulation of money supply and interest rates in the economy
#8
Which of the following is not a characteristic of a perfectly competitive market?
Barriers to entry
ExplanationAbsence of entry restrictions in perfect competition
#9
What is the law of diminishing marginal utility?
As consumption of a good increases, its marginal utility decreases
ExplanationDecreasing additional satisfaction with each consumed unit
#10
Which of the following is a characteristic of monopolistic competition?
Product differentiation
ExplanationDiverse products with brand distinctions
#11
Which of the following is a characteristic of a command economy?
Government control over resource allocation
ExplanationCentralized planning and resource distribution
#12
What is fiscal policy?
Government policy related to taxation and spending
ExplanationGovernment's use of taxes and spending to influence the economy
#13
Which of the following is an example of a regressive tax?
Sales tax
ExplanationTax that takes a higher percentage from low-income earners
#14
What is the 'invisible hand' concept in economics?
Market forces guiding individuals' self-interest to promote the social interest
ExplanationUnintended social benefits resulting from individual actions
#15
What is the formula for price elasticity of demand?
Percentage change in price / Percentage change in quantity demanded
ExplanationMeasure of responsiveness in quantity demanded to price changes
#16
Which of the following is a tool of monetary policy used by central banks?
Interest rates
ExplanationControl over money supply and interest rates
#17
What does the term 'monetary policy' refer to?
Government policy related to interest rates and money supply
ExplanationControl over money supply and interest rates to achieve economic goals
#18
Which of the following is a tool used in fiscal policy?
Government spending
ExplanationAdjustment of government expenditures to influence the economy
#19
What is the concept of price ceiling in economics?
A legal maximum price for a good or service
ExplanationGovernment-imposed limit on the price of a product