#1
Which economic system relies on private ownership of the means of production?
Command economy
Market economy
Mixed economy
Traditional economy
#2
In the context of economic systems, what does the term 'Laissez-faire' mean?
Government intervention in the economy
Hands-off approach, letting the market operate freely
Mixed economic system
State ownership of all means of production
#3
According to the law of demand, what is the relationship between price and quantity demanded?
Directly proportional
Inversely proportional
No relationship
Constant
#4
What is the primary characteristic of a traditional economic system?
Private ownership of the means of production
Centralized government control
Reliance on custom and tradition to make economic decisions
Market-driven allocation of resources
#5
What is the main premise of the theory of perfect competition in microeconomics?
A large number of buyers and sellers, homogeneous products, and easy entry and exit
Limited competition with a few dominant firms in the market
Government control over pricing and production
Monopolistic competition with differentiated products
#6
Who is considered the father of modern economics and wrote 'The Wealth of Nations'?
John Maynard Keynes
Milton Friedman
Adam Smith
Karl Marx
#7
In economic terms, what is inflation?
A decrease in the general price level of goods and services
An increase in the quantity of money in circulation
A sustained increase in the average price level of goods and services
A situation where demand exceeds supply
#8
What is the primary focus of Keynesian economics during economic downturns?
Reducing government spending
Increasing taxes
Stimulating demand through government intervention
Promoting supply-side policies
#9
Which economic theory emphasizes the role of expectations, perceptions, and animal spirits in shaping economic outcomes?
Monetarism
Behavioral economics
Austrian economics
Classical economics
#10
Who introduced the concept of the Invisible Hand in economics?
John Maynard Keynes
Adam Smith
Karl Marx
Friedrich Hayek
#11
What is the Tragedy of the Commons in the context of economic theory?
A situation where private individuals overuse a shared resource, leading to depletion or degradation
A theory about the inevitability of economic recessions
The idea that government intervention is always necessary for a stable economy
A concept related to the law of diminishing marginal utility
#12
According to classical economics, what role does government play in the economy?
Limited intervention to maintain law and order
Central planning and control of all economic activities
Active involvement in regulating all aspects of the economy
Complete absence, allowing the market to self-regulate
#13
What is the concept of 'comparative advantage' in international trade?
A country can produce more of all goods than another country
A country can produce a good at a lower opportunity cost than another country
A country should only focus on producing goods it can produce most efficiently
A country should not engage in international trade
#14
What is the concept of a price ceiling in microeconomics?
A maximum price set by the government to prevent prices from rising above a certain level
A minimum price set by the government to ensure fair wages
The equilibrium price in a perfectly competitive market
The price at which quantity demanded equals quantity supplied
#15
Which economist is associated with the theory of creative destruction?
John Maynard Keynes
Joseph Schumpeter
Milton Friedman
Paul Krugman