#1
Which of the following is a characteristic of a free market economy?
Government control of prices
Limited consumer choice
Private ownership of resources
Equal distribution of wealth
#2
What is a common purpose of government intervention in markets?
To reduce competition
To ensure economic efficiency
To increase monopolies
To discourage innovation
#3
What is the effect of a subsidy on producers?
It decreases producer surplus
It increases consumer surplus
It increases the price of goods
It decreases production costs
#4
Which of the following is an example of a public good?
Electricity
A private beach
Healthcare
Roads and highways
#5
Which of the following is an example of a command economy?
United States
China
Germany
Canada
#6
What is the primary function of the Federal Reserve System in the United States?
Fiscal policy implementation
Monetary policy implementation
Tax collection
Government expenditure control
#7
Which of the following is an example of a price floor?
Minimum wage
Maximum rent control
Subsidies for farmers
Sales tax
#8
What is the main objective of antitrust laws?
To promote monopoly power
To prevent unfair business practices
To restrict international trade
To regulate government intervention
#9
In a perfectly competitive market, what happens in the long run?
Firms earn supernormal profits
Firms enter and exit until economic profits are zero
Firms continue to make losses indefinitely
Government sets price ceilings
#10
What is the purpose of a tariff?
To increase imports
To decrease government revenue
To protect domestic industries
To encourage international trade
#11
Which of the following is a tool of monetary policy?
Tariffs
Subsidies
Open market operations
Price ceilings
#12
What is the Laffer Curve used to illustrate?
The relationship between inflation and unemployment
The impact of government spending on economic growth
The relationship between tax rates and government revenue
The effect of interest rates on investment
#13
Which of the following is an example of a regressive tax?
Income tax
Property tax
Sales tax
Corporate tax
#14
What is an externality in economics?
A situation where demand exceeds supply
The direct cost of production
A side effect of an economic activity affecting a third party
The cost of inputs
#15
Which of the following is a tool of fiscal policy?
Reserve requirements
Taxation
Discount rate
Open market operations
#16
What is the primary purpose of trade barriers?
To encourage international trade
To protect domestic industries
To promote free trade agreements
To lower consumer prices
#17
Which of the following is an example of a subsidy?
Import tax
Income tax
Government payment to farmers
Sales tax