#1
What is the basic economic problem that arises due to limited resources and unlimited wants?
Scarcity
ExplanationResource shortage relative to unlimited desires.
#2
Which economic system relies on the forces of supply and demand to allocate resources?
Capitalism
ExplanationAllocation based on market dynamics.
#3
What is the opportunity cost of a decision?
The value of the next best alternative foregone
ExplanationThe sacrificed alternative's value.
#4
In economics, what does the term 'elasticity' measure?
The responsiveness of quantity demanded to a change in price
ExplanationSensitivity of demand to price change.
#5
What is the law of diminishing marginal returns?
As more units of a variable input are added, the marginal product decreases
ExplanationOutput increase slows with additional inputs.
#6
What is the concept of 'utility' in economics?
The satisfaction or pleasure derived from consuming a good or service
ExplanationSubjective value derived from consumption.
#7
What is the difference between a public good and a private good?
Public goods are non-excludable and non-rivalrous, while private goods are excludable and rivalrous
ExplanationAccessibility and rivalry in consumption.
#8
In economics, what does the term 'GDP' stand for?
Gross Domestic Product
ExplanationTotal economic output of a nation.
#9
Which economic concept is measured by the consumer price index (CPI)?
Inflation
ExplanationRate of general price increase.
#10
Which type of market structure is characterized by a single seller with significant market control?
Monopoly
ExplanationDominance of a single seller.
#11
What is the role of the Federal Reserve in the United States?
Monetary policy regulation
ExplanationControlling money supply and interest rates.
#12
What is the difference between a progressive tax and a regressive tax?
Progressive tax rates decrease with higher income, while regressive tax rates increase with higher income
ExplanationTax rates change relative to income level.
#13
What is the concept of 'marginal cost' in economics?
The additional cost of producing one more unit of a good or service
ExplanationIncremental cost per unit increase.