1.

Which branch of economics focuses on the study of large-scale economic systems of a nation
as a whole?
a) Microeconomics
b) Macroeconomics
c) Positive Economics
d) Normative Economics

2. Microeconomics primarily deals with:

a) How individuals make economic decisions
b) How nations allocate resources
c) Large-scale economic systems
d) Testing economic theories

3. Positive economics is characterized by its:

a) Opinion-based nature
b) Ability to be tested and proved or disproved
c) Focus on individual economic decisions
d) Lack of reliance on data

4. Which concept refers to the alternative combinations of two goods that an economy can
produce with given resources and technology?
a) Opportunity Cost
b) Production Possibilities Frontier (PPF)
c) Market Equilibrium
d) Command Economy

5. Opportunity cost is best defined as:

a) The total cost of producing a good
b) The value of goods consumed by a family
c) The value forgone in making one investment over another
d) The price of a good in a market economy

6. In a traditional economy, production is primarily for:

a) Profit
b) Consumption by the family
c) Distribution to private individuals
d) Export to other nations

7. Which economic system is based on communal ownership?

a) Market Economy
b) Mixed Economy
c) Traditional Economy
d) Command Economy
8. A market economy is characterized by:
a) Private ownership of the means of production
b) Centralized government control over resources
c) Equal distribution of wealth among citizens
d) Communal ownership of resources

9. Which economic system is a mixture of market system and the command system?
a) Mixed Economy
b) Traditional Economy
c) Command Economy
d) Market Economy

10. What is the primary focus of macroeconomics?

a) How individuals make economic decisions
b) Study of large-scale economic systems of a nation
c) Allocation of resources within an economy
d) Testing economic theories empirically

11. Normative economics is primarily concerned with:

a) Testing economic theories
b) Providing data for analysis
c) Formulating opinions about what should be
d) Studying individual economic behavior

12. Which term refers to the value forgone in order to make one particular investment instead
of another?
a) Opportunity Cost
b) Production Possibilities Frontier (PPF)
c) Market Equilibrium
d) Marginal Utility

13. In a command economy, decisions regarding resource allocation are primarily made by:
a) Private individuals and corporations
b) Central government authorities
c) Market forces of supply and demand
d) Collective bargaining among workers

14. Which economic system relies heavily on market forces and private ownership, but also
incorporates some government intervention?
a) Market Economy
b) Command Economy
c) Traditional Economy
d) Mixed Economy
15. What is the fundamental characteristic of positive economics?
a) Opinion-based nature
b) Reliance on empirical testing
c) Focus on individual preferences
d) Subjective interpretation of data

16. What is demand?

a) The actual buying of goods and services
b) Consumer desire and willingness to pay a price for a specific good or service
c) Desire to buy but cannot afford
d) The interaction of buyers and sellers

17. What is absolute demand?

a) The actual buying of goods and services
b) Consumer desire and willingness to pay a price for a specific good or service
c) Desire to buy but cannot afford
d) The amount of money received during a period of time

18. What is potential demand?

a) The actual buying of goods and services
b) Consumer desire and willingness to pay a price for a specific good or service
c) Desire to buy but cannot afford
d) The interaction of buyers and sellers

19. What does "ceteris paribus" mean?

a) All other factors being equal
b) The amount of money received during a period of time
c) The actual buying of goods and services
d) The interaction of buyers and sellers

20. What is income?

a) The amount of money received during a period of time
b) Consumer desire and willingness to pay a price for a specific good or service
c) The actual buying of goods and services
d) All other factors being equal

21. What is the Law of Supply?

a) The amount of money received during a period of time
b) Supply is the amount of some product that producers are willing and able to sell at a given
price
c) Consumer desire and willingness to pay a price for a specific good or service
d) The interaction of buyers and sellers
22. What is a supply schedule?
a) Tabular depiction of the relationship between price and quantity demanded
b) Graphic representation of the relationship between product price and quantity of product
that a seller is willing and able to supply
c) Interaction of buyers and sellers
d) Actual buying of goods and services

23. What is a supply curve?

a) Tabular depiction of the relationship between price and quantity demanded
b) Graphic representation of the relationship between product price and quantity of product
that a seller is willing and able to supply
c) Interaction of buyers and sellers
d) Actual buying of goods and services

24. What is a change in quantity supplied?

a) It refers to the movements of points along the given supply curve
b) It refers to either a movement to the right or to the left movement or shift of the supply
curve
c) The quantity supplied exceeds the quantity demanded
d) When the price of a good under consideration changes

25. What is a change in supply?

a) It refers to the movements of points along the given supply curve
b) It refers to either a movement to the right or to the left movement or shift of the supply
curve
c) The quantity supplied exceeds the quantity demanded
d) When the price of a good under consideration changes

26. What is a market?

a) Tabular depiction of the relationship between price and quantity demanded
b) Graphic representation of the relationship between product price and quantity of product
that a seller is willing and able to supply
c) Interaction of buyers and sellers
d) Actual buying of goods and services

27. What is market equilibrium?

a) When there is a shortage, the price rises
b) The price at which the quantity demanded equals the quantity supplied
c) The quantity supplied exceeds the quantity demanded
d) The interaction of buyers and sellers

28. What is equilibrium price?

a) When there is a shortage, the price rises
b) The price at which the quantity demanded equals the quantity supplied
c) The quantity supplied exceeds the quantity demanded
d) The interaction of buyers and sellers

29. What is equilibrium quantity?

a) The quantity bought and sold at the equilibrium price
b) The price at which the quantity demanded equals the quantity supplied
c) The quantity supplied exceeds the quantity demanded
d) The interaction of buyers and sellers

30. What is the law of market forces?

a) When there is a shortage, the price rises
b) The price at which the quantity demanded equals the quantity supplied
c) The quantity supplied exceeds the quantity demanded
d) The interaction of buyers and sellers

31. What is a surplus or excess supply?

a) The quantity supplied exceeds the quantity demanded
b) The quantity demanded exceeds the quantity supplied
c) The price set by the government that is higher than the equilibrium level
d) The price set below the equilibrium price

32. What is a shortage or excess demand?

a) The quantity supplied exceeds the quantity demanded
b) The quantity demanded exceeds the quantity supplied
c) The price set by the government that is higher than the equilibrium level
d) The price set below the equilibrium price

33. What is a price floor?

a) The price set by the government that is higher than the equilibrium level
b) The price set below the equilibrium price
c) The quantity demanded exceeds the quantity supplied
d) The quantity supplied exceeds the quantity demanded

34. What is a price ceiling?

a) The price set by the government that is higher than the equilibrium level
b) The price set below the equilibrium price
c) The quantity demanded exceeds the quantity supplied
d) The quantity supplied exceeds the quantity demanded

35. What does the law of supply state?

a) When there is a shortage, the price rises
b) Supply is the amount of some product that producers are willing and able to sell at a given
price
c) The quantity demanded exceeds the quantity supplied
d) The interaction of buyers and sellers

36. What is elasticity in economics?

a) The measurement of how responsive an economic variable is to a change in another
b) The measurement of the absolute value of a variable
c) The measurement of the average change in a variable over time
d) The measurement of the variability of a variable

37. What does the Price Elasticity of Demand measure?

a) The responsiveness of quantity demanded to changes in price
b) The responsiveness of price to changes in quantity demanded
c) The responsiveness of quantity supplied to changes in price
d) The responsiveness of income to changes in price

38. Income Elasticity of Demand measures the responsiveness of demand for a good to changes
in:
a) Price
b) Quantity demanded
c) Income
d) Quantity supplied

39. Cross Elasticity of Demand measures the responsiveness of demand for a good to changes in
the:
a) Price of another good
b) Quantity demanded of another good
c) Income of consumers
d) Price of the same good

40. Price Elasticity of Supply measures the responsiveness of quantity supplied for a good to
changes in:
a) Income
b) Price
c) Quantity demanded
d) Cross elasticity

41. A high Price Elasticity of Demand implies that:

a) Quantity demanded is highly responsive to price changes
b) Quantity demanded is not responsive to price changes
c) Price changes have no effect on quantity demanded
d) Quantity demanded and price changes are unrelated

42. If the Income Elasticity of Demand for a luxury car is 2, it means:

a) Demand for the luxury car increases by 2 units for every $1 increase in income
b) Demand for the luxury car increases by 2% for every 1% increase in income
c) Demand for the luxury car decreases by 2% for every 1% increase in income
d) Demand for the luxury car increases by 2% for every $1 increase in income

43. Cross Elasticity of Demand for substitutes is:

a) Positive
b) Negative
c) Zero
d) Undefined

44. A Price Elasticity of Supply of 0.5 indicates that:

a) Quantity supplied is highly responsive to price changes
b) Quantity supplied is not responsive to price changes
c) Price changes have no effect on quantity supplied
d) Quantity supplied and price changes are unrelated

45. If the Cross Elasticity of Demand between two goods is negative, it indicates that:
a) The goods are substitutes
b) The goods are complements
c) The goods are unrelated
d) The goods are luxury items