#1
Which of the following is a characteristic of a command economy?
Centralized government control
ExplanationGovernment exercises authority over economic decisions.
#2
In a market economy, prices are primarily determined by:
Supply and demand
ExplanationPrices fluctuate based on the interplay between buyers and sellers.
#3
Which of the following best describes a traditional economy?
Reliance on custom and tradition to determine economic activities
ExplanationEconomic decisions based on cultural practices.
#4
What role does the government play in a mixed economy?
Regulates certain aspects while allowing market forces to operate
ExplanationGovernment intervention coexists with market dynamics.
#5
Which economic system emphasizes private ownership of resources and decentralized decision-making?
Market economy
ExplanationIndividuals and businesses control resources and choices.
#6
Which economic system emphasizes collective ownership of resources and central planning?
Command economy
ExplanationState controls resources and dictates production.
#7
Which of the following is a potential disadvantage of a pure market economy?
Inequality of wealth distribution
ExplanationUneven wealth distribution may arise.
#8
Which of the following is a feature of a socialist economic system?
Government ownership of key industries
ExplanationState controls strategic sectors of the economy.
#9
What economic principle explains the law of diminishing returns?
Marginal utility
ExplanationAdditional units of a good yield declining satisfaction.
#10
Which economic theory is associated with the idea of 'invisible hand'?
Classical economics
ExplanationMarkets self-regulate for the collective good.
#11
What economic concept is represented by the phrase 'there is no such thing as a free lunch'?
Opportunity cost
ExplanationMaking one choice often means forgoing another.
#12
In a perfectly competitive market, what happens if there is a surplus of goods?
Prices fall
ExplanationExcess supply leads to price reduction.
#13
What economic concept is represented by the equation 'MVP = MP × P'?
Marginal productivity theory of wages
ExplanationLinks wages to the productivity of additional labor.
#14
Which economic theory suggests that government intervention is necessary to prevent market failures?
Keynesian economics
ExplanationGovernment should regulate to stabilize the economy.
#15
What economic concept is illustrated by the phrase 'there is no such thing as a free lunch'?
Opportunity cost
ExplanationEvery choice has an associated cost.