#1
In a market economy, prices are primarily determined by:
Supply and demand forces
ExplanationPrices fluctuate based on demand and supply.
#2
What is a key feature of a traditional economy?
Customs and traditions dictate economic activities
ExplanationEconomic activities follow customs and traditions.
#3
Which economic system is based on custom, tradition, and passed-down beliefs?
Traditional economy
ExplanationEconomic decisions are based on customs and traditions.
#4
What is the concept of scarcity in economics?
Limited resources and unlimited needs
ExplanationDemand exceeds available resources.
#5
What is the law of demand in economics?
As prices increase, quantity demanded decreases
ExplanationInverse relationship between price and demand.
#6
What is the concept of opportunity cost in economics?
The value of the next best alternative forgone
ExplanationCost of choosing one option over another.
#7
Which of the following is a characteristic of a command economy?
Centralized government control
ExplanationGovernment dictates economic decisions.
#8
What economic system is characterized by a blend of market forces and government intervention?
Mixed economy
ExplanationCombination of free market and government control.
#9
What is the primary goal of a market economy?
Maximizing individual profit
ExplanationIndividuals aim to maximize their own profit.
#10
In a capitalist economy, what is the role of government in relation to businesses?
Minimal interference
ExplanationGovernment involvement in business is limited.
#11
What is a common criticism of a command economy?
Inefficiency and lack of innovation
ExplanationCentralized control leads to inefficiency and stifled innovation.
#12
Which economic indicator measures the total value of goods and services produced within a country in a specific time period?
Gross Domestic Product (GDP)
ExplanationSum of all goods and services produced domestically.
#13
Which economic system emphasizes collective or government ownership of resources and means of production?
Socialist economy
ExplanationGovernment or collective ownership of resources.
#14
Which economic system places a strong emphasis on individual property rights and free market competition?
Capitalist economy
ExplanationPrivate ownership and free market competition.
#15
What economic concept is based on the idea that individuals and firms act in their own self-interest to maximize utility or profit?
Rational self-interest
ExplanationIndividuals and firms pursue their own benefit.
#16
Which economic system is characterized by minimal government interference and emphasizes individual freedom and private property rights?
Laissez-faire economy
ExplanationLimited government intervention in economic affairs.
#17
Which economic theory advocates for increased government spending during economic downturns to stimulate the economy?
Keynesian economics
ExplanationGovernment intervention to manage economic cycles.