Basic Economic Concepts Quiz

Which economic system is characterized by private ownership of resources and minimal government intervention?

• Command economy

• Market economy

• Traditional economy

• Mixed economy

What term describes the measurement of the total value of all goods and services produced within a country's borders in a given year?

• Consumer Price Index (CPI)

• Producer Price Index (PPI)

• Gross Domestic Product (GDP)

• Balance of Trade

Which of the following is NOT an economic resource (factor of production)?

• Inflation

• Labor

• Capital

• Land

What principle states that as prices rise, quantity demanded typically falls?

• Supply principle

• Equilibrium principle

• Law of demand

• Elasticity principle

During which phase of the business cycle is there high unemployment and declining production?

• Recovery

• Peak

• Recession

• Expansion

Which economic utility is created when a product is available at the right time?

• Place utility

• Time utility

• Form utility

• Possession utility

What is the primary reason nations engage in international trade?

• Cultural exchange

• Political alliances

• Comparative advantage

• Currency manipulation

In a command economy, who makes the major economic decisions?

• Consumers

• Private businesses

• Market forces

• Government

When demand remains relatively unchanged despite price changes, this is called:

• Inelastic demand

• Perfect competition

• Dynamic pricing

• Elastic demand

Which economic indicator measures changes in the prices paid by consumers for goods and services?

• Producer Price Index

• Gross National Product

• Consumer Price Index

• Balance of Payments