#1
What is the law of demand in economics?
As prices increase, demand decreases
ExplanationHigher prices lead to reduced demand.
#2
What is the concept of price elasticity of supply?
The responsiveness of quantity supplied to changes in price
ExplanationDegree of supply change with price shifts.
#3
What is the concept of a production possibility frontier (PPF) in economics?
A graph that shows the relationship between two goods a country can produce given its resources
ExplanationGraph illustrating resource allocation options.
#4
In the context of market structure, what characterizes a monopolistic competition?
Many sellers with differentiated products
ExplanationMultiple sellers with varied products.
#5
What is the concept of a quota in international trade?
A limit on the quantity of a good that can be imported or exported
ExplanationImposed restriction on imported/exported quantity.
#6
Which factor does not influence the supply of a product?
Consumer preferences
ExplanationConsumer preferences affect demand, not supply.
#7
What is a perfectly competitive market characterized by?
Many buyers and sellers
ExplanationNumerous buyers and sellers without market control.
#8
What is the difference between a monopoly and an oligopoly?
Monopoly has one seller, while oligopoly has few sellers
ExplanationMonopoly: single seller; Oligopoly: few sellers.
#9
In economics, what does the term 'invisible hand' refer to?
Natural market forces guiding self-interest to promote the overall good
ExplanationSelf-interested actions leading to societal benefit.
#10
What is the role of a regulatory body in a market?
To promote fair competition and protect consumers
ExplanationEnsuring fair competition and consumer protection.
#11
How does inflation impact purchasing power?
Decreases purchasing power
ExplanationInflation reduces the value of currency.
#12
What is the concept of elasticity of demand?
The responsiveness of quantity demanded to price changes
ExplanationExtent of change in demand with price fluctuations.
#13
What is a market equilibrium?
The point where supply and demand are equal
ExplanationBalance point of supply meeting demand.
#14
What is a market failure?
When resources are not allocated efficiently
ExplanationInefficient resource distribution in markets.
#15
What is the difference between microeconomics and macroeconomics?
Microeconomics focuses on individual markets, while macroeconomics focuses on the overall economy
ExplanationMicro: specific markets; Macro: entire economy.
#16
What is the concept of a price ceiling?
A maximum price set by the government
ExplanationGovernment-imposed upper limit on prices.
#17
What is the tragedy of the commons?
Overconsumption of resources when they are collectively owned
ExplanationCollective ownership leading to resource depletion.