#1
What is the basic economic problem?
Scarcity
Inflation
Unemployment
Monopoly
#2
What is the law of demand?
As price increases, quantity demanded decreases
As price decreases, quantity demanded increases
Price and quantity demanded have no relationship
Demand is constant regardless of price changes
#3
Which of the following is not a type of market structure?
Monopoly
Oligopoly
Monopsony
Communism
#4
What does GDP stand for?
General Domestic Product
Gross Domestic Product
Gross Development Product
Global Domestic Product
#5
In international trade, what is the term for a tax imposed on imported goods?
Tariff
Subsidy
Quota
Embargo
#6
What is a budget deficit?
When government spending exceeds government revenue
When government revenue exceeds government spending
When government spending equals government revenue
When government spending decreases
#7
What is a currency exchange rate?
The rate at which a country's currency can be exchanged for another currency
The rate at which a country's currency is pegged to gold
The rate at which a country's currency is determined by its GDP
The rate at which a country's currency is determined by its inflation rate
#8
Which of the following is not a characteristic of a perfectly competitive market?
Many buyers and sellers
Homogeneous products
Easy entry and exit
Market power of individual firms
#9
What is comparative advantage in trade theory?
A country can produce a good more efficiently than other countries
A country can produce all goods more efficiently than other countries
A country should focus on producing goods with higher opportunity costs
A country should produce only those goods it can produce at the lowest absolute cost
#10
What is an externality in economics?
A cost or benefit that affects a party who did not choose to incur that cost or benefit
A cost or benefit that affects only the producer
A cost or benefit that affects only the consumer
A cost or benefit that is internalized by the market
#11
What is the law of diminishing marginal returns?
As input increases, total output increases at a decreasing rate
As input increases, total output increases at an increasing rate
As input decreases, total output decreases
As input increases, total output remains constant
#12
What is the opportunity cost of a decision?
The total value of all resources used in making the decision
The value of the next best alternative foregone
The monetary cost incurred in making the decision
The value of the decision made compared to its benefits
#13
What is the formula for calculating GDP using the expenditure approach?
GDP = Consumption + Investment + Government Spending + (Exports - Imports)
GDP = Consumption + Investment + Government Spending
GDP = Consumption + Investment + Government Spending - Taxes
GDP = Consumption + Investment + Government Spending + Taxes
#14
What is the difference between microeconomics and macroeconomics?
Microeconomics focuses on individual markets and industries, while macroeconomics focuses on the economy as a whole
Microeconomics focuses on the economy as a whole, while macroeconomics focuses on individual markets and industries
Microeconomics studies government policies, while macroeconomics studies consumer behavior
Microeconomics studies consumer behavior, while macroeconomics studies government policies
#15
What is the 'Phillips Curve' in economics?
Shows the relationship between inflation and unemployment
Shows the relationship between supply and demand
Shows the relationship between GDP and inflation
Shows the relationship between interest rates and investment
#16
What is the 'invisible hand' in economics?
A metaphor for the government's role in regulating markets
The self-regulating nature of the market guided by individuals pursuing their self-interest
A measure of the effectiveness of monetary policy
A concept describing the allocation of resources in a planned economy
#17
What is the 'Laffer Curve' in economics?
A curve showing the relationship between tax rates and government revenue
A curve showing the relationship between inflation and unemployment
A curve showing the relationship between interest rates and investment
A curve showing the relationship between supply and demand
#18
What is the 'Tragedy of the Commons'?
A situation where individual users, acting independently according to their self-interest, deplete a shared resource
A situation where government intervention leads to inefficient resource allocation
A situation where demand exceeds supply, leading to price increases
A situation where a monopoly controls all resources, leading to high prices