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Basics of economics Flashcards | StudBud
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Basics of economics
Basics of economics
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Questions
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Answers
1
Which of the following best describes a monopolistic competition market structure?
A market controlled by the government
One seller dominates the market
Many sellers with differentiated products
Few sellers with homogeneous products
2
Which type of economic system relies on customs and traditions to make economic decisions?
Mixed economy
Market economy
Tradtional economy
Command economy
3
Which of the following is an example of a private good?
Smart phone
Public park
Street lighting
National defense
4
When the price of a good rises, the law of demand states that
Supply increases
Quantity demanded increases
Demand remains unchanged
Quantity demanded decreases
5
Which of the following would likely cause an increase in the supply of a product?
An increase in input costs
An increase in taxes on production
A decrease in the number of producers
An advancement in technology
6
In which type of market structure do firms have the most control over price?
Monopoly
Perfect competiton
Monopolistic competiton
Oligopoly
7
What is the primary purpose of a public good?
To be sold for a profit
To be excludable and rival in consumption
To provide free services to all citizens
To maximize individual benefit
8
The factors of production include land, labor, capital, and entrepreneurship.
True
False
9
Opportunity cost applies only to financial decisions, not to time or resources.
False
True
10
Public goods are non-excludable, meaning that once provided, it is impossible to prevent people from using them.
False
True
11
Scarcity means that there are limited resources to satisfy all human wants and needs.
False
True
12
Which of the following is an example of a positive externality?
Overfishing in a public lake
A beekeeper’s bees pollinating nearby crops
Air pollution from a factory
Noise pollution from road construction
13
Firms in the circular flow model are responsible for:
Buying goods from households
Producing goods and services
Supplying labor to households
Paying taxes to households
14
Which of the following is a characteristic of a perfectly competitive market
?
Only one seller
Government regulation of prices
Significant product differentiation
No barriers to entry
15
Fast food restaurant are good example for monopolistic competition.
False
True
16
In a monopoly, the firm is a price taker.
False
True
17
Which of the following would likely shift the demand curve for pizza to the left?
An increase in consumer incomes
An increase in the price of burgers
A health report showing negative effects of pizza consumption
A decrease in price of pizza
18
A shift in consumer preferences can cause a shift in the demand curve.
True
False
19
Which economic system is characterized by private ownership of resources and minimal government intervention?
Command economy
Market economy
Mixed economy
Traditional economy
20
A decrease in the price of a good typically leads to an increase in quantity demanded.
False
True
