#1
Which of the following is a basic economic problem?
Scarcity
ExplanationResources are limited while wants are unlimited.
#2
What does GDP stand for in economics?
Gross Domestic Product
ExplanationTotal value of goods and services produced within a country's borders.
#3
What is the main purpose of a SWOT analysis in business?
To identify strengths, weaknesses, opportunities, and threats
ExplanationAssessment tool to understand internal and external factors impacting business.
#4
What is the primary goal of financial management in a corporation?
Maximizing shareholder wealth
ExplanationMaking decisions to increase the value of the firm for its shareholders.
#5
What is the concept of 'opportunity cost' in economics?
The cost of the next best alternative foregone when a decision is made
ExplanationValue of the best alternative forgone when a choice is made.
#6
Which of the following is NOT a factor of production?
Money
ExplanationMedium of exchange, not a resource used in production.
#7
What does 'ROI' stand for in business?
Return on Investment
ExplanationRatio of net profit to investment cost, indicating profitability.
#8
What does the term 'market equilibrium' refer to in economics?
A state where supply equals demand
ExplanationBalanced point where quantity supplied equals quantity demanded.
#9
Which of the following is NOT a characteristic of perfect competition?
Barriers to entry
ExplanationMarket with easy entry and exit, no obstacles for new firms.
#10
What is the primary function of a central bank in a country's economy?
Regulating interest rates
ExplanationControl over money supply and interest rates to achieve economic goals.
#11
Which economic principle states that as production of a good increases, the opportunity cost of producing an additional unit rises?
Law of Increasing Opportunity Cost
ExplanationAllocating resources to one good leads to less available for another, increasing cost.
#12
In economics, what does the term 'elasticity' measure?
The responsiveness of quantity demanded to a change in price
ExplanationDegree to which quantity demanded changes due to price change.