#1
Which of the following is a characteristic of a traditional economic system?
Allocation of resources based on customs and traditions
ExplanationResource allocation guided by customs and traditions.
#2
In a market economy, prices are primarily determined by:
Supply and demand
ExplanationPrices determined by the interplay of supply and demand.
#3
Which economic concept refers to the total value of goods and services produced in a country in a given period?
Gross Domestic Product (GDP)
ExplanationTotal value of goods and services produced.
#4
In economics, the term 'opportunity cost' is best defined as:
The value of the next best alternative foregone
ExplanationValue of the best alternative given up.
#5
Which of the following is a characteristic of a command economy?
Government control over resource allocation
ExplanationGovernment controls resource allocation.
#6
Which of the following best defines 'scarcity' in economics?
The limited nature of resources relative to human wants
ExplanationResources are insufficient to satisfy all wants.
#7
In economics, what does the term 'ceteris paribus' mean?
All other things being equal
ExplanationConsidering only the specific factors mentioned.
#8
Which economic system advocates for public ownership of the means of production?
Socialism
ExplanationAdvocates public ownership of production means.
#9
The circular flow model of a market economy illustrates the flow of:
Goods, services, money, and resources
ExplanationIllustrates flow of goods, services, money, and resources.
#10
Which of the following is an example of a regressive tax?
Sales tax
ExplanationTax where lower-income groups pay a higher proportion.
#11
Which of the following is a characteristic of monopolistic competition?
Product differentiation
ExplanationFirms differentiate products to gain market share.
#12
Which economic system relies heavily on market forces but allows for some government intervention?
Mixed economy
ExplanationCombination of market forces and government intervention.
#13
What is the main function of a central bank in a market economy?
To regulate interest rates and money supply
ExplanationRegulates interest rates and money supply.
#14
Which of the following is an example of a public good?
Electricity
ExplanationNon-excludable and non-rivalrous good like electricity.
#15
Which of the following is a key feature of a command economy?
Central planning by the government
ExplanationEconomic activities centrally planned by government.
#16
Which of the following best describes the 'invisible hand' concept in economics?
Natural forces that guide market activity
ExplanationMarket guided by self-interest and competition.
#17
Which of the following is a feature of a pure market economy?
Limited role of government in economic activities
ExplanationGovernment plays a minimal role in economic activities.
#18
Which economic system allows for the most individual freedom in economic decision-making?
Free market economy
ExplanationIndividuals have maximum freedom in economic decisions.
#19
Which of the following is a characteristic of oligopoly?
Mutual interdependence among firms
ExplanationFirms' decisions affected by competitors.
#20
What is the primary goal of a monopolistically competitive firm?
Maximize profit
ExplanationAim to maximize profits by differentiating products.
#21
Which of the following is a characteristic of perfect competition?
Many buyers and sellers
ExplanationNumerous buyers and sellers with no market power.