#1
Which of the following best defines the law of demand?
As the price of a good increases, the quantity demanded decreases, and vice versa.
ExplanationPrice increase leads to demand decrease.
#2
What is the difference between a normal good and an inferior good?
Normal goods are purchased more as income increases, while inferior goods are purchased less.
ExplanationIncome increase affects normal goods positively.
#3
What is the difference between a monopoly and a monopsony?
A monopoly is a market with only one seller, while a monopsony is a market with only one buyer.
ExplanationOne seller versus one buyer.
#4
What is the 'Phillips curve' in economics?
A curve showing the relationship between inflation and unemployment.
ExplanationInflation versus unemployment.
#5
What is the 'Tragedy of the Commons'?
A situation where individuals overuse a shared resource to the detriment of society as a whole.
ExplanationOveruse of shared resource harming society.
#6
What does the term 'elasticity of demand' measure?
The change in quantity demanded in response to a change in price.
ExplanationMeasure of demand response to price change.
#7
In economics, what does the term 'market equilibrium' refer to?
A situation where the quantity demanded equals the quantity supplied.
ExplanationSupply equals demand.
#8
Which of the following is an example of a positive externality?
A beekeeper's bees pollinating nearby apple orchards.
ExplanationBeneficial side effect.
#9
What is the relationship between marginal cost (MC) and average total cost (ATC) in the short run?
MC intersects ATC at its minimum point.
ExplanationMC meets ATC at minimum.
#10
What does the term 'market failure' mean?
When the market does not allocate resources efficiently.
ExplanationInefficient resource allocation.
#11
Which of the following is a characteristic of a perfectly competitive market?
Homogeneous products.
ExplanationIdentical products.
#12
What is the 'income effect' in economics?
The change in quantity demanded due to a change in consumers' incomes.
ExplanationDemand change due to income change.
#13
What is 'price discrimination' in economics?
Selling the same product at different prices to different customers.
ExplanationDifferent pricing for different buyers.
#14
In the context of market structures, what is an oligopoly?
A market with a few large firms dominating the industry.
ExplanationFew large firms control.
#15
What is the 'utility' in economics?
The satisfaction or pleasure derived from consuming a good or service.
ExplanationSatisfaction from consumption.