Fundamental Principles of Economic Decision-Making Quiz
Test your knowledge with 13 questions on microeconomic concepts like opportunity cost, GDP, market structures, and more.
#1
Which of the following is not a factor of production?
#2
Which economic system relies on government control and ownership of resources and production?
Market economy
Mixed economy
Command economy
Traditional economy
#3
What is the primary goal of a firm in a market economy?
Maximizing social welfare
Maximizing profits
Minimizing costs
Ensuring fair distribution of resources
#4
What is the term used to describe the total market value of all final goods and services produced within a country in a given period of time?
Gross National Product (GNP)
Gross Domestic Product (GDP)
Net National Product (NNP)
National Income (NI)
#5
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 National Product (GNP)
Net National Product (NNP)
Gross Domestic Product (GDP)
Net Domestic Product (NDP)
#6
Which of the following best describes the concept of opportunity cost?
The cost of producing one more unit of a good or service
The cost of an alternative that must be forgone in order to pursue a certain action
The total cost of all resources used to produce a good or service
The monetary cost of purchasing a good or service
#7
In economics, what does the law of diminishing marginal utility state?
As the quantity of a good consumed increases, the total utility derived from it decreases
The price of a good decreases as its demand increases
Consumers will always choose the combination of goods that maximizes their total utility
The demand for a good increases as its price decreases
#8
What is the main function of the Federal Reserve System in the United States?
Regulating international trade
Controlling fiscal policy
Managing government spending
Regulating the nation's monetary policy and money supply
#9
What is the formula to calculate GDP (Gross Domestic Product)?
GDP = Consumption + Investment + Government Spending + (Exports - Imports)
GDP = Consumption + Investment + Government Spending + Imports
GDP = Consumption + Investment + Government Spending - Exports
GDP = Consumption + Investment + Government Spending
#10
Which of the following is not a characteristic of a perfectly competitive market?
Many buyers and sellers
Homogeneous products
Barriers to entry
Perfect information
#11
What is the formula for calculating elasticity of demand?
Percentage change in quantity demanded / Percentage change in price
Percentage change in price / Percentage change in quantity demanded
Total revenue / Quantity demanded
Price / Quantity demanded
#12
What is the term used to describe the situation where a country can produce a good at a lower opportunity cost than another country?
Absolute advantage
Comparative advantage
Elasticity
Scarcity
#13
What does the term 'invisible hand' refer to in economics?
The role of government in regulating markets
The self-regulating nature of markets
The concept of perfect competition
The impact of externalities on market equilibrium
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