Fundamentals of Economics and Economic Decision-Making Quiz

Test your knowledge of GDP, supply and demand, market structures, fiscal and monetary policies, and more with this microeconomics quiz.

Practice Learn Test

What does GDP stand for in economics?

Gross Domestic Profit

Gross Domestic Product

Global Domestic Production

Government Development Plan

Which of the following is NOT a factor of production?

Land

Labor

Capital

Demand

What does the term 'opportunity cost' refer to in economics?

The cost of producing an additional unit of a good

The cost of giving up the next best alternative

The cost of raw materials

The cost of labor

What is the law of demand?

As the price of a good increases, the quantity demanded decreases

As the price of a good increases, the quantity demanded increases

As the price of a good decreases, the quantity demanded decreases

As the price of a good decreases, the quantity demanded increases

What is the law of supply?

As the price of a good increases, the quantity supplied decreases

As the price of a good increases, the quantity supplied increases

As the price of a good decreases, the quantity supplied decreases

As the price of a good decreases, the quantity supplied increases

What does the term 'elasticity' measure in economics?

The responsiveness of quantity demanded to a change in price

The total revenue generated by a product

The percentage change in quantity demanded

The percentage change in price

Which market structure is characterized by a large number of sellers with similar products?

Monopoly

Oligopoly

Monopolistic competition

Perfect competition

What is the role of a central bank in an economy?

To regulate interest rates

To control inflation

To issue currency

All of the above

What is the concept of 'comparative advantage' in international trade?

When one country can produce a good more efficiently than another country

When one country can produce all goods more efficiently than another country

When one country has an absolute advantage in all goods over another country

When one country has no advantage in trade over another country

#10

What is the formula for calculating price elasticity of demand?

Percentage change in quantity demanded / Percentage change in price

Percentage change in price / Percentage change in quantity demanded

Absolute change in quantity demanded / Absolute change in price

Absolute change in price / Absolute change in quantity demanded

#11

What is fiscal policy?

The manipulation of interest rates by a central bank

Government policy concerning taxation and spending

The regulation of imports and exports

Government policy concerning money supply

#12

What is the difference between microeconomics and macroeconomics?

Microeconomics focuses on individual markets, while macroeconomics focuses on the economy as a whole

Macroeconomics focuses on individual markets, while microeconomics focuses on the economy as a whole

Microeconomics focuses on the economy as a whole, while macroeconomics focuses on individual markets

Macroeconomics focuses on the economy as a whole, while microeconomics focuses on individual markets

#13

What is the difference between a recession and a depression?

A recession is shorter in duration than a depression

A depression is characterized by a larger decline in economic activity than a recession

A recession only affects certain sectors of the economy, while a depression affects the entire economy

There is no difference between a recession and a depression

#14

What is the formula for calculating the unemployment rate?

Number of unemployed people / Labor force

Number of unemployed people / Total population

Number of employed people / Labor force

Number of employed people / Total population

#15

What is the difference between nominal GDP and real GDP?

Nominal GDP is adjusted for inflation, while real GDP is not

Real GDP is adjusted for inflation, while nominal GDP is not

Nominal GDP includes only goods and services produced domestically, while real GDP includes goods and services produced internationally

Real GDP includes only goods and services produced domestically, while nominal GDP includes goods and services produced internationally

#16

What is the Phillips curve?

A curve showing the relationship between inflation and unemployment

A curve showing the relationship between interest rates and investment

A curve showing the relationship between government spending and economic growth

A curve showing the relationship between taxes and government revenue