#1
What is the law of demand in economics?
As price increases, quantity demanded decreases
ExplanationInverse relationship between price and quantity demanded.
#2
Which of the following is not a determinant of supply?
Consumer preferences
ExplanationFactors affecting production and not consumer choices.
#3
What is the law of diminishing marginal utility?
As the quantity consumed increases, the marginal utility decreases
ExplanationDecrease in additional satisfaction with each unit consumed.
#4
What is a perfectly competitive market characterized by?
One buyer and many sellers
ExplanationNumerous sellers, but individual buyers have no influence.
#5
What is the difference between a movement along the demand curve and a shift in the demand curve?
A movement is caused by a change in price, while a shift is caused by a change in non-price factors
ExplanationPrice change vs. external factors impacting demand.
#6
What is the price elasticity of demand formula?
Percentage change in price / Percentage change in quantity demanded
ExplanationMathematical expression for measuring demand elasticity.
#7
What is the difference between explicit costs and implicit costs?
Explicit costs are out-of-pocket costs, while implicit costs are opportunity costs
ExplanationTangible vs. opportunity expenses.
#8
In economics, what is the concept of elasticity of demand?
The responsiveness of quantity demanded to a change in price
ExplanationSensitivity of quantity demanded to price fluctuations.
#9
What is a monopolistic competition market characterized by?
Many sellers with differentiated products
ExplanationSeveral sellers offering diverse products.
#10
What is the difference between a normal good and an inferior good?
Normal goods are luxury items, while inferior goods are basic necessities
ExplanationLuxury vs. essential goods.
#11
What is the concept of equilibrium price in a market?
The price at which quantity demanded equals quantity supplied
ExplanationBalance between quantity demanded and supplied.
#12
What is the concept of deadweight loss in economics?
The loss of total surplus due to market inefficiency
ExplanationReduction in economic welfare due to market inefficiency.