#1
What does the term 'opportunity cost' refer to in economics?
The value of the next best alternative foregone when a decision is made
ExplanationCost of forgoing the next best alternative in decision-making
#2
What is the main function of the Federal Reserve System in the United States?
To manage the money supply and regulate the banking system
ExplanationControl of money supply and banking system regulation
#3
What is 'monetary policy' in economics?
The use of interest rates and the money supply to control economic variables
ExplanationControl of economic variables through interest rates and money supply
#4
Which of the following is NOT a characteristic of a perfectly competitive market?
Barriers to entry
ExplanationAbsence of barriers preventing entry into the market
#5
In economics, what is the 'Laffer curve' used to illustrate?
The relationship between tax rates and government revenue
ExplanationCurve depicting the impact of tax rates on government revenue
#6
Which of the following is an example of a regressive tax?
Sales tax
ExplanationTax taking a larger percentage from low-income earners
#7
Which of the following is an example of a public good?
Healthcare services
ExplanationService benefiting the public as a whole
#8
What is the 'law of diminishing returns' in economics?
As more units of a variable input are added to a fixed input, the marginal product of the variable input eventually decreases
ExplanationDecreasing returns with additional variable input
#9
What is 'elasticity of demand' in economics?
A measure of how responsive quantity demanded is to a change in price
ExplanationSensitivity of quantity demanded to price changes
#10
What is the concept of 'marginal utility' in economics?
The additional satisfaction gained from consuming one more unit of a good or service
ExplanationAdded satisfaction from consuming an extra unit
#11
What is the 'Tragedy of the Commons' in economics?
A situation where common resources are overused and depleted due to individuals' self-interest
ExplanationDepletion of common resources due to self-interest
#12
What is the main difference between a progressive tax and a regressive tax?
A progressive tax takes a larger percentage of income from low-income earners, while a regressive tax takes a larger percentage from high-income earners
ExplanationTax impact based on income level
#13
What is the 'Phillips Curve' in economics?
A curve illustrating the relationship between inflation and unemployment
ExplanationGraph depicting inflation and unemployment relationship
#14
What is the 'Paradox of Thrift' in economics?
The notion that increased saving can lead to decreased consumption and economic slowdown
ExplanationIncreased saving leading to reduced consumption and economic slowdown
#15
In economics, what does the term 'moral hazard' refer to?
The behavior of individuals or firms acting differently when they are insured against adverse events
ExplanationAltered behavior when insured against adverse events