#1
What does GDP stand for?
Gross Domestic Product
ExplanationGDP represents the total value of all goods and services produced within a country's borders in a specific time period.
#2
Which economic term refers to the total value of goods and services produced by a country in a given time period?
Gross Domestic Product
ExplanationGross Domestic Product (GDP) measures the overall economic output of a country.
#3
Which of the following is an example of a regressive tax?
Sales tax
ExplanationA regressive tax takes a larger percentage of income from low-income earners, and sales tax is a fixed rate on goods that impacts lower-income individuals more.
#4
What is the law of demand?
As prices decrease, demand increases
ExplanationThe law of demand states that, all else being equal, as the price of a good or service decreases, the quantity demanded increases.
#5
What does the term 'opportunity cost' refer to in economics?
The value of the next best alternative foregone
ExplanationOpportunity cost is the value of the best alternative given up when a choice is made.
#6
Which economic concept describes the situation where the quantity of goods demanded exceeds the quantity supplied, resulting in higher prices?
Shortage
ExplanationA shortage occurs when demand exceeds supply, leading to insufficient goods in the market.
#7
Which of the following is a characteristic of perfect competition?
Price taker
ExplanationIn perfect competition, firms are price takers, meaning they accept the market price and have no influence over it.
#8
Which of the following is not a characteristic of a monopoly?
Price taker
ExplanationMonopolies are price makers, not price takers, as they have control over the market price.
#9
What is the formula for calculating price elasticity of demand?
Percentage change in price / Percentage change in quantity demanded
ExplanationPrice elasticity of demand measures how sensitive quantity demanded is to changes in price, calculated as the percentage change in quantity demanded divided by the percentage change in price.
#10
In the context of international trade, what does 'comparative advantage' refer to?
The ability of a country to produce a good using fewer resources than another country
ExplanationComparative advantage is the ability of a country to produce a good or service at a lower opportunity cost than another country.
#11
Which economic theory suggests that government intervention in the economy should be limited to ensuring property rights and enforcing contracts?
Neoliberalism
ExplanationNeoliberalism advocates for limited government intervention, emphasizing free markets, individual rights, and minimal regulation.
#12
Which of the following is a characteristic of oligopoly?
Few sellers and differentiated products
ExplanationOligopoly is characterized by a market dominated by a small number of sellers offering differentiated products.