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Question 1

What is the definition of economics?

Answer 1

Economics is the study of how individuals and societies allocate scarce resources to satisfy unlimited wants.

Question 2

True or False: Microeconomics focuses on individual markets and the behavior of consumers and firms.

Answer 2

True

Question 3

Fill in the blank: __________ is the basic economic problem due to limited resources and unlimited wants.

Answer 3

Scarcity

Question 4

What does GDP stand for?

Answer 4

Gross Domestic Product

Question 5

Multiple Choice: Which of the following is a factor of production? A) Money B) Land C) Time

Answer 5

B) Land

Question 6

What is opportunity cost?

Answer 6

Opportunity cost is the value of the next best alternative foregone when making a choice.

Question 7

True or False: A normative statement is based on opinions and cannot be tested.

Answer 7

True

Question 8

What is a market?

Answer 8

A market is a place or mechanism where buyers and sellers interact to exchange goods and services.

Question 9

Fill in the blank: __________ is the measure of how much of a good or service consumers are willing to buy at different prices.

Answer 9

Demand

Question 10

Multiple Choice: Which of the following shifts the demand curve to the right? A) Increase in consumer income B) Decrease in the price of the good C) Increase in the price of substitutes

Answer 10

A) Increase in consumer income

Question 11

What is supply?

Answer 11

Supply is the quantity of a good or service that producers are willing and able to sell at different prices.

Question 12

True or False: A price increase typically leads to a decrease in the quantity supplied.

Answer 12

False

Question 13

What is market equilibrium?

Answer 13

Market equilibrium is the point where the quantity demanded equals the quantity supplied.

Question 14

Fill in the blank: __________ occurs when the quantity demanded exceeds the quantity supplied.

Answer 14

Shortage

Question 15

Multiple Choice: What effect does a decrease in supply have on price? A) Price decreases B) Price increases C) Price remains the same

Answer 15

B) Price increases

Question 16

What is a public good?

Answer 16

A public good is a good that is non-excludable and non-rivalrous, meaning it can be consumed by many without diminishing its availability.

Question 17

True or False: Externalities are costs or benefits that affect third parties not involved in a transaction.

Answer 17

True

Question 18

What is inflation?

Answer 18

Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power.

Question 19

Fill in the blank: __________ is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

Answer 19

Consumer Price Index (CPI)

Question 20

Multiple Choice: Which of the following is NOT a type of unemployment? A) Structural B) Frictional C) Seasonal D) Economic

Answer 20

D) Economic

Question 21

What is fiscal policy?

Answer 21

Fiscal policy refers to the use of government spending and taxation to influence the economy.

Question 22

True or False: Monetary policy is controlled by the government.

Answer 22

False

Question 23

What is the purpose of the central bank?

Answer 23

The central bank manages a country’s currency, money supply, and interest rates.

Question 24

Fill in the blank: __________ refers to the total value of all final goods and services produced in a country in a given year.

Answer 24

Gross Domestic Product (GDP)

Question 25

Multiple Choice: Which of the following can lead to economic growth? A) Increased productivity B) Increased taxation C) Decreased investment

Answer 25

A) Increased productivity

Question 26

What is a monopoly?

Answer 26

A monopoly is a market structure where a single seller dominates the market, with no close substitutes for the product.