#1
What is the law of demand in economics?
As price decreases, quantity demanded increases.
ExplanationInverse relationship between price and quantity demanded.
#2
What does GDP stand for in economics?
Gross Domestic Product
ExplanationTotal value of goods and services produced within a country.
#3
What is the law of supply in economics?
As price increases, quantity supplied increases.
ExplanationDirect relationship between price and quantity supplied.
#4
What is a tariff in international trade?
A tax on imports
ExplanationTax imposed on imported goods.
#5
Which market structure is characterized by a single seller with complete control over supply and price?
Monopoly
ExplanationSingle seller dominance in the market.
#6
What is the primary goal of fiscal policy?
To stabilize the economy through government spending and taxation
ExplanationGovernment actions to manage economy.
#7
Which of the following is NOT a characteristic of perfect competition?
Barriers to entry
ExplanationPerfect competition entails no barriers to entry.
#8
Which of the following is NOT a function of money in an economy?
Barter facilitation
ExplanationMoney eliminates the need for barter.
#9
Which of the following is NOT a determinant of demand?
Cost of production
ExplanationCost of production affects supply, not demand.
#10
What is comparative advantage in international trade?
The ability of a country to produce all goods at a lower opportunity cost than another country
ExplanationProducing with less sacrifice of alternative goods.
#11
What is the opportunity cost of a decision?
The value of the next best alternative forgone
ExplanationValue sacrificed for the chosen option.
#12
What is the formula for calculating elasticity of demand?
Percentage change in quantity demanded divided by percentage change in price
ExplanationMeasure of responsiveness of quantity demanded to price change.
#13
What is the economic concept defined as the additional satisfaction or utility that a consumer derives from consuming an additional unit of a good or service?
Marginal utility
ExplanationExtra benefit gained from consuming one more unit.
#14
What does the term 'invisible hand' refer to in economics?
The self-regulating nature of markets
ExplanationMarket forces guiding resource allocation.
#15
What is the law of diminishing marginal returns?
As more of a variable input is added to a fixed input, the marginal product of the variable input eventually declines
ExplanationDecrease in additional output from extra input.