Econ Basics Quiz

What is the law of demand?

• As the price of a good increases, the quantity demanded increases.

• As the price of a good increases, the quantity demanded decreases.

• As the price of a good decreases, the quantity demanded decreases.

• There is no relationship between price and quantity demanded.

Which of the following is NOT a characteristic of a perfectly competitive market?

• Many buyers and sellers

• Homogeneous products

• Barriers to entry

• Perfect information

What does GDP stand for?

• Gross Domestic Product

• General Domestic Product

• Gross Development Product

• General Development Product

What is the basic economic problem?

• Unlimited resources and limited wants

• Limited resources and unlimited wants

• Unlimited resources and unlimited wants

• Limited resources and limited wants

In the circular flow model, which sector provides labour to firms?

• Government

• Households

• Financial institutions

• Overseas sector

Which of the following is NOT a market force?

• Supply

• Demand

• Government intervention

• Equilibrium

What is the equilibrium market price?

• 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 at which supply exceeds demand

What does price elasticity of demand measure?

• The responsiveness of quantity demanded to a change in price

• The responsiveness of quantity supplied to a change in price

• The change in price due to a change in demand

• The change in demand due to a change in supply

Which of the following is a component of Aggregate Demand?

• Consumption

• Savings

• Imports

• Taxes

What is the formula for calculating GDP using the expenditure approach?