#1
What is the basic economic problem?
Scarcity
ExplanationResources are limited, but human wants and needs are unlimited.
#2
Which of the following is NOT considered a factor of production?
Money
ExplanationMoney is a medium of exchange, not a resource used in production.
#3
What is the term used to describe the total value of all goods and services produced within a country's borders in a specific time period?
Gross Domestic Product (GDP)
ExplanationIt measures the economic performance of a country.
#4
Which of the following best describes 'opportunity cost'?
The benefit of the next best alternative forgone
ExplanationIt's the value of the next best alternative when a decision is made.
#5
Which of the following is a characteristic of a perfectly competitive market?
Numerous buyers and sellers
ExplanationNo individual buyer or seller has the power to influence the market.
#6
What does the term 'elasticity of demand' measure?
The responsiveness of quantity demanded to changes in price
ExplanationIt indicates how sensitive demand is to price changes.
#7
What is the formula for calculating profit?
Total Revenue - Total Costs
ExplanationIt's the difference between revenue and costs.
#8
What is the difference between a recession and a depression in economics?
Severity and duration
ExplanationRecession is milder and shorter than a depression.
#9
In economics, what is the law of demand?
As price increases, demand decreases
ExplanationThere's an inverse relationship between price and quantity demanded.
#10
What does the term 'monopoly' refer to in economics?
A single seller dominating the market
ExplanationThere's only one seller with significant market power.
#11
What is the concept of 'comparative advantage' in international trade?
When a country can produce more of a good using fewer resources than another country
ExplanationIt's the ability to produce goods at a lower opportunity cost.
#12
What is the term used to describe a situation where one party in a transaction has more information than the other party?
Asymmetric information
ExplanationIt leads to market inefficiencies and can result in adverse selection or moral hazard.
#13
What is the 'Phillips Curve' in economics?
A curve showing the relationship between inflation and unemployment
ExplanationIt suggests an inverse relationship between inflation and unemployment rates.
#14
What is 'perfect competition' in economics?
A market with identical products
ExplanationAll firms sell an identical product, there are no barriers to entry, and buyers and sellers have perfect information.