#1
Which of the following is a characteristic of a perfectly competitive market?
Homogeneous products
ExplanationProducts are identical across sellers, allowing for price competition.
#2
What is the primary function of the Federal Reserve System in the United States?
Monetary policy implementation
ExplanationThe central bank regulates money supply and interest rates to achieve economic goals.
#3
What does the term 'opportunity cost' represent in economics?
The value of the next best alternative forgone
ExplanationIt measures the benefit sacrificed when choosing one option over another.
#4
Which of the following is a characteristic of monopolistic competition?
Product differentiation
ExplanationFirms differentiate products to create a perceived uniqueness in the market.
#5
Which of the following is an example of a regressive tax?
Sales tax
ExplanationIt imposes a higher burden on low-income earners compared to high-income earners.
#6
What is the primary goal of a business organization?
Maximize profits
ExplanationProfit maximization is a fundamental objective for businesses in capitalist economies.
#7
What is the term used to describe a situation where the quantity of a good demanded exceeds the quantity supplied at a given price?
Shortage
ExplanationShortages occur when demand outstrips supply, leading to unsatisfied consumers.
#8
Which economic concept refers to the total value of all final goods and services produced within a country's borders in a given period?
Gross Domestic Product (GDP)
ExplanationGDP measures a country's economic output and is used to gauge its economic health.
#9
In business strategy, what does SWOT analysis stand for?
Strengths, Weaknesses, Opportunities, Threats
ExplanationIt assesses internal strengths and weaknesses, and external opportunities and threats.
#10
What economic concept refers to a sustained increase in the general price level of goods and services in an economy?
Inflation
ExplanationInflation erodes purchasing power and affects consumer and business behavior.
#11
Which of the following is NOT a component of Porter's Five Forces analysis in business?
Technological advancements
ExplanationPorter's Five Forces analyze competition, suppliers, buyers, substitutes, and entry barriers.
#12
What term is used to describe the excess of total revenue over total cost?
Profit
ExplanationProfit represents the financial gain a business earns from its activities.
#13
In economics, what is meant by the 'invisible hand' concept?
Spontaneous economic order from individual self-interest
ExplanationAdam Smith's concept where individuals pursuing self-interest unintentionally promote society's interest.
#14
What does the term 'elasticity' measure in economics?
The responsiveness of quantity demanded to changes in price
ExplanationIt quantifies how sensitive quantity demanded is to price changes.
#15
What economic theory suggests that government intervention in the market should be minimized to achieve economic efficiency?
Classical economics
ExplanationAdvocates free markets with minimal government interference.
#16
According to the law of demand, what is the relationship between the price of a good and the quantity demanded, ceteris paribus?
Negative
ExplanationAs price increases, quantity demanded decreases, and vice versa, holding other factors constant.
#17
Which of the following is NOT a characteristic of oligopoly?
Homogeneous products
ExplanationOligopolistic firms often differentiate their products to compete.
#18
In business, what is meant by the term 'market segmentation'?
Dividing a market into distinct groups of buyers with different needs
ExplanationIt allows businesses to target specific customer segments with tailored marketing strategies.
#19
In business strategy, what is the purpose of a SWOT analysis?
To identify strengths, weaknesses, opportunities, and threats
ExplanationSWOT analysis helps businesses assess internal and external factors for strategic planning.