#1
Which of the following is a fundamental economic problem?
Scarcity
ExplanationLimited resources versus unlimited wants.
#2
What does GDP stand for in Economics?
Gross Domestic Product
ExplanationTotal market value of all final goods and services produced in a country.
#3
Which economic system is characterized by private ownership of resources and decentralized decision making?
Capitalism
ExplanationPrivate ownership and market-driven economy.
#4
What is the name of the phenomenon where one party's gain in the production or consumption of a good or service comes at the expense of another party?
Externality
ExplanationPositive or negative effects on third parties not involved in the transaction.
#5
What does the term 'Ceteris Paribus' mean in Economics?
All other things being equal
ExplanationIsolating the effect of a single variable while holding others constant.
#6
In Economics, what does the law of demand state?
As price decreases, quantity demanded increases
ExplanationInverse relationship between price and quantity demanded.
#7
Which market structure is characterized by many firms selling differentiated products?
Monopolistic competition
ExplanationMany firms with slight product differentiation and some market power.
#8
Which economist is known for his theory of 'invisible hand'?
Adam Smith
ExplanationMarket forces guiding self-interest towards societal benefit.
#9
Who introduced the concept of 'marginal utility' in Economics?
Jeremy Bentham
ExplanationConcept of additional satisfaction gained from consuming one more unit of a good.
#10
What is the primary function of the Federal Reserve System in the United States?
Monetary policy
ExplanationRegulation of money supply and interest rates to influence economic activity.
#11
What is the formula for calculating price elasticity of demand?
Percentage change in quantity demanded / Percentage change in price
ExplanationMeasurement of responsiveness of quantity demanded to changes in price.
#12
Who is considered the father of modern economics?
Adam Smith
ExplanationPioneering figure in classical economics and author of 'The Wealth of Nations'.