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Economic Theories and Concepts Quiz

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According to the law of demand, what happens to the quantity demanded when the price of a good decreases?

Increases

Explanation

Quantity demanded rises as price falls.

Which economic concept refers to the total value of goods and services produced within a country's borders in a specific time period?

Gross Domestic Product (GDP)

Explanation

Measures total economic output of a nation.

Which economic concept suggests that as a person consumes more of a good, the additional satisfaction or utility decreases?

Law of Diminishing Marginal Utility

Explanation

Utility decreases with increased consumption.

In international trade, what is the term for a situation where a country exports more goods than it imports?

Trade surplus

Explanation

Exports exceed imports.

Which economic concept is described as the total market value of all final goods and services produced within a country in a specific time period?

Gross Domestic Product (GDP)

Explanation

Measures a nation's economic output.

Which economic theory suggests that government intervention is necessary to achieve economic stability?

Keynesian economics

Explanation

Advocates government intervention to stabilize economy.

What is the primary focus of the Laffer curve in economics?

Taxation and government revenue

Explanation

Illustrates relationship between tax rates and revenue.

Which economic theory emphasizes the importance of individuals pursuing their self-interest in a competitive market to achieve overall economic well-being?

Neoclassical economics

Explanation

Emphasizes self-interest in markets.

What is the Phillips Curve in economics primarily used to illustrate?

The relationship between inflation and unemployment

Explanation

Shows inverse relationship between inflation and unemployment.

#10

According to the concept of the Circular Flow of Income, what represents the total income earned by households in an economy?

Disposable income

Explanation

Income available after taxes.

#11

In economics, what does the term 'opportunity cost' represent?

The cost of forgoing the next best alternative

Explanation

Cost of choosing one option over another.

#12

In international trade, what does the term 'comparative advantage' refer to?

The ability to produce a good at the lowest opportunity cost

Explanation

Ability to produce efficiently at a lower cost.

#13

What is the Tragedy of the Commons in economics?

Overuse and depletion of shared resources due to self-interest

Explanation

Shared resource depletion due to self-interest.

#14

In monetary policy, what does the term 'quantitative easing' refer to?

Increasing the money supply through asset purchases

Explanation

Boosts money supply via asset purchases.

#15

Which economic theory argues for the elimination of private property and the establishment of a classless society?

Marxian economics

Explanation

Advocates classless society without private property.

Economic Theories and Concepts Quiz

According to the law of demand, what happens to the quantity demanded when the price of a good decreases?

Which economic concept refers to the total value of goods and services produced within a country's borders in a specific time period?

Which economic concept suggests that as a person consumes more of a good, the additional satisfaction or utility decreases?

In international trade, what is the term for a situation where a country exports more goods than it imports?

Which economic concept is described as the total market value of all final goods and services produced within a country in a specific time period?

Which economic theory suggests that government intervention is necessary to achieve economic stability?

What is the primary focus of the Laffer curve in economics?

Which economic theory emphasizes the importance of individuals pursuing their self-interest in a competitive market to achieve overall economic well-being?

What is the Phillips Curve in economics primarily used to illustrate?

According to the concept of the Circular Flow of Income, what represents the total income earned by households in an economy?

In economics, what does the term 'opportunity cost' represent?

In international trade, what does the term 'comparative advantage' refer to?

What is the Tragedy of the Commons in economics?

In monetary policy, what does the term 'quantitative easing' refer to?

Which economic theory argues for the elimination of private property and the establishment of a classless society?

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