#1
What is the law of demand in economics?
As prices decrease, quantity demanded increases.
ExplanationInverse relationship between price and quantity demanded.
#2
What is a market equilibrium?
A situation where quantity demanded equals quantity supplied.
ExplanationBalance between demand and supply.
#3
What is a price ceiling in economics?
A legally mandated maximum price for a good or service.
ExplanationGovernment-imposed price limit.
#4
What is a monopoly in economics?
A market structure with only one seller and many buyers.
ExplanationSingle seller dominance.
#5
What does the term 'elasticity of demand' measure?
The responsiveness of quantity demanded to changes in price.
ExplanationSensitivity of quantity demanded to price changes.
#6
What is the formula for calculating price elasticity of demand?
Percentage change in quantity demanded / Percentage change in price
ExplanationMeasure of responsiveness of demand to price changes.
#7
Which of the following is NOT a determinant of supply?
Consumer preferences
ExplanationNot a factor affecting supply.
#8
What does the term 'marginal utility' refer to?
The additional satisfaction derived from consuming one more unit of a good or service.
ExplanationExtra satisfaction gained from consuming more.
#9
Which of the following is an example of a positive externality?
Education benefiting society by creating a more skilled workforce.
ExplanationBenefit to society beyond the individual.
#10
What is the difference between explicit and implicit costs?
Explicit costs are monetary payments, while implicit costs are opportunity costs.
ExplanationTangible vs. non-tangible costs.
#11
Which of the following is a characteristic of a perfectly competitive market?
Many buyers and many sellers with identical products.
ExplanationLarge number of buyers and sellers with homogenous goods.
#12
What does the term 'opportunity cost' represent?
The highest-valued alternative that must be given up to engage in an activity.
ExplanationValue of the next best alternative forgone.
#13
What is the law of diminishing marginal returns?
As input increases, output increases at a decreasing rate.
ExplanationDeclining productivity with additional input.
#14
What does the term 'price discrimination' refer to?
A situation where a firm charges different prices to different customers for the same good or service.
ExplanationVarying prices based on consumer characteristics.
#15
What is the slope of the total cost curve in the short run?
Positive and decreasing
ExplanationRising costs at a decreasing rate.