#1
What does the law of diminishing marginal utility state?
As consumption of a product increases, its marginal utility also increases
As consumption of a product increases, its marginal utility decreases
As consumption of a product increases, its marginal cost decreases
As consumption of a product increases, its total utility decreases
#2
According to the law of demand, what happens to quantity demanded when price increases, holding other factors constant?
Quantity demanded decreases
Quantity demanded remains constant
Quantity demanded increases
Quantity demanded becomes unpredictable
#3
What does the law of supply state?
As price decreases, quantity supplied decreases
As price increases, quantity supplied decreases
As price increases, quantity supplied increases
As price increases, quantity demanded decreases
#4
What does the term 'ceteris paribus' mean in economics?
All else being equal
Supply and demand
Demand curve
Marginal utility
#5
In economics, what does the term 'GDP' stand for?
General Demand Price
Gross Domestic Product
Government Debt Percentage
Goods Distribution Plan
#6
What is the law of diminishing returns?
As more units of a variable input are added to a fixed input, the marginal product of the variable input decreases
As more units of a variable input are added to a fixed input, the marginal product of the variable input increases
As more units of a fixed input are added to a variable input, the marginal product of the fixed input decreases
As more units of a fixed input are added to a variable input, the average product of the variable input decreases
#7
Which of the following is a basic assumption of the rational choice theory in economics?
Individuals maximize utility
Individuals always act irrationally
Individuals are always risk-averse
Individuals have perfect information
#8
Which of the following is NOT a characteristic of a perfectly competitive market?
Many buyers and sellers
Homogeneous products
Easy entry and exit of firms
Price-setting power of individual firms
#9
What is the concept of opportunity cost in economics?
The cost of producing one more unit of a good or service
The value of the next best alternative foregone
The total cost of production
The price of a good or service in the market
#10
Which of the following is a characteristic of monopolistic competition?
One seller dominating the market
Homogeneous products
High barriers to entry
Product differentiation
#11
What is the concept of elasticity of demand?
The responsiveness of quantity demanded to a change in income
The responsiveness of quantity demanded to a change in price
The responsiveness of quantity supplied to a change in price
The responsiveness of quantity supplied to a change in income
#12
What is the primary role of the central bank in a country's economy?
To regulate fiscal policy
To control inflation and stabilize the currency
To enforce antitrust laws
To provide social welfare programs
#13
What is the 'Tragedy of the Commons'?
A situation where individuals overuse or deplete a shared resource
A situation where individuals cooperate to manage a common resource effectively
A situation where government intervention prevents overuse of resources
A situation where individuals hoard resources for personal gain
#14
In economics, what is the difference between positive and normative statements?
Positive statements are based on facts, while normative statements are based on opinions
Normative statements are based on facts, while positive statements are based on opinions
Positive statements predict future outcomes, while normative statements describe current situations
Normative statements predict future outcomes, while positive statements describe current situations
#15
What is the concept of perfect information in economics?
Consumers have complete knowledge about all available products and prices
Producers have complete knowledge about consumer preferences
Consumers have limited knowledge about available products and prices
Producers have limited knowledge about production techniques
#16
What is the concept of externalities in economics?
The cost incurred by businesses to comply with government regulations
The benefits enjoyed by consumers from government subsidies
The unintended consequences of economic activities affecting third parties
The distribution of income among different socioeconomic groups