#1
What is the law of demand in economics?
As price increases, quantity demanded increases
As price increases, quantity demanded decreases
As price decreases, quantity demanded increases
As price remains constant, quantity demanded varies
#2
What is the law of supply in microeconomics?
As price increases, quantity supplied decreases
As price decreases, quantity supplied increases
As price remains constant, quantity supplied varies
As income increases, quantity supplied increases
#3
What is the concept of market equilibrium?
A situation where quantity supplied exceeds quantity demanded.
A situation where price is set by the government.
A situation where quantity demanded equals quantity supplied.
A situation where there is a shortage of goods in the market.
#4
What is the concept of elasticity of demand?
A measure of the responsiveness of quantity demanded to changes in income.
The total quantity demanded in a market.
The relationship between quantity supplied and quantity demanded.
A measure of the responsiveness of quantity demanded to changes in price.
#5
What is the law of diminishing marginal utility?
As the quantity consumed of a good increases, the total utility increases at an increasing rate.
As the quantity consumed of a good increases, the total utility increases at a decreasing rate.
As the price of a good decreases, the quantity demanded decreases.
As the price of a good increases, the quantity supplied increases.
#6
What does the supply curve represent in microeconomics?
The relationship between price and quantity demanded
The relationship between price and quantity supplied
The relationship between income and consumption
The relationship between cost and revenue
#7
What is the equilibrium price in a market?
The price at which quantity supplied equals quantity demanded
The highest price a consumer is willing to pay
The lowest price a producer is willing to accept
The price set by the government
#8
What is the price elasticity of demand?
A measure of the responsiveness of quantity demanded to a change in price
The total expenditure on a good or service
The equilibrium price in a market
The maximum price a consumer is willing to pay
#9
What is a perfectly competitive market?
A market with only one seller
A market with differentiated products
A market with many buyers and sellers, identical products, and free entry and exit
A market with barriers to entry and exit
#10
What is the difference between a normal good and an inferior good?
Normal goods are always more expensive than inferior goods.
Normal goods have a higher income elasticity of demand than inferior goods.
Normal goods are luxury items, while inferior goods are necessities.
Normal goods have a positive income elasticity of demand, while inferior goods have a negative income elasticity of demand.
#11
What is the concept of elasticity of supply?
A measure of the responsiveness of quantity supplied to changes in price.
The total quantity supplied in a market.
The relationship between quantity supplied and quantity demanded.
The minimum quantity a producer is willing to supply.
#12
What is the difference between a monopoly and perfect competition?
Monopolies have many sellers, while perfect competition has only one seller.
Perfect competition has barriers to entry, while monopolies have free entry.
Monopolies have identical products, while perfect competition has differentiated products.
Perfect competition has many buyers, while monopolies have only one buyer.
#13
What is a price floor in the context of supply and demand?
A government-imposed maximum price for a good or service
A government-imposed minimum price for a good or service
The price at which quantity supplied equals quantity demanded
The price determined by the market forces
#14
Inelastic demand is characterized by:
Large changes in quantity demanded for a small change in price
Small changes in quantity demanded for a large change in price
Perfect responsiveness of quantity demanded to changes in price
No change in quantity demanded regardless of price changes
#15
What is the cross-price elasticity of demand?
A measure of the responsiveness of quantity demanded to a change in income
A measure of the responsiveness of quantity demanded to a change in the price of another good
The total expenditure on two complementary goods
The equilibrium price of two substitute goods
#16
What is the concept of consumer surplus?
The total revenue received by producers
The total cost incurred by consumers
The difference between the maximum price a consumer is willing to pay and the actual price paid
The difference between quantity demanded and quantity supplied
#17
What is the deadweight loss in the context of taxation?
The loss in consumer surplus due to an increase in price.
The loss in producer surplus due to a decrease in quantity supplied.
The total loss in welfare that occurs when a tax reduces the quantity traded in a market.
The additional revenue gained by the government from taxation.
#18
What is the multiplier effect in economics?
The magnification of an initial change in spending into a larger final change in economic activity.
The reduction in the money supply by the central bank.
The impact of inflation on consumer purchasing power.
The increase in government spending during a recession.
#19
What is the opportunity cost of a decision?
The total cost incurred in making a decision.
The monetary cost of the decision.
The highest-valued alternative that must be sacrificed to make the decision.
The benefit gained from the decision.