Economics Hardest Exam Quiz: Trivia
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Exams are the most cricual part of our learning phase, expecially when it is for subject like Economics. Some would agree that economics is challenging at best. If you don’t think so, this quiz can change your mind. For this quiz, you will be required to know the three main economics questions: the definition of capital, what it means to be an entrepreneur and the opportunity cost. Dive in and take a chance with this quiz; you will learn about economics.
- 1.
What is Economics?
- A.
The study of how people try to satisfy what appears to be seemingly unlimited and competing wants through the careful use of relatively scarce resources
- B.
Employment, gross domestic product, inflation, economic growth, and the distribution of income
- C.
Deals with behavior and decision making by small units, such as individuals and firms
- D.
A rise in the general level of prices occurs, workers need more money to pay for good clothing and shelter
Correct Answer
A. The study of how people try to satisfy what appears to be seemingly unlimited and competing wants through the careful use of relatively scarce resourcesExplanation
Economics is the study of how individuals and societies make choices in the face of limited resources to satisfy their unlimited wants. It involves analyzing various economic indicators such as employment, gross domestic product, inflation, economic growth, and income distribution. Additionally, economics also focuses on understanding the behavior and decision-making processes of individuals and firms. The given answer accurately captures the essence of economics by highlighting the concept of trying to satisfy unlimited wants with scarce resources.Rate this question:
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- 2.
What is Scarcity?
- A.
Giving something up to have something else
- B.
Extra cost of producing one additional unit of production
- C.
The condition that results from society not having enough resources to produce all the things people would like to have
- D.
A rise in the general level of prices occurs, workers need more money to pay for good clothing and shelter
Correct Answer
C. The condition that results from society not having enough resources to produce all the things people would like to haveExplanation
Scarcity refers to the condition that arises when society does not have enough resources to produce all the goods and services that people desire. This means that there is a limited supply of resources, such as land, labor, and capital, compared to the unlimited wants and needs of individuals. As a result, individuals and societies are forced to make choices and trade-offs, giving up certain things in order to have others. Scarcity is a fundamental concept in economics and drives the need for allocation and decision-making in resource management.Rate this question:
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- 3.
What are the three basic economic questions?
- A.
What, where, whom
- B.
What, how, whom
- C.
How, whom, when
- D.
What, why, whom
Correct Answer
B. What, how, whomExplanation
The three basic economic questions are what to produce, how to produce, and for whom to produce. "What" refers to the goods and services that should be produced to satisfy the needs and wants of society. "How" relates to the methods and resources used in the production process. "Whom" pertains to the distribution of the produced goods and services among individuals and groups in society.Rate this question:
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- 4.
What are the four factors of production?
- A.
Land, capital, money, entrepreneurs
- B.
Land, capital, labor, entrepreneurs
- C.
Capital, money, supply, demand
- D.
Labor, capital, supply, demand
Correct Answer
B. Land, capital, labor, entrepreneursExplanation
The correct answer is land, capital, labor, entrepreneurs. These four factors of production are essential in the creation of goods and services. Land refers to natural resources such as land itself, water, and minerals. Capital represents man-made resources like machinery and equipment. Labor involves the physical and mental effort put in by workers. Entrepreneurs are individuals who take risks and bring together the other factors of production to create and manage a business.Rate this question:
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- 5.
Definition of Capital?
- A.
The tools, equipment used in the production of goods
- B.
The machinery, and factories used in the production of goods
- C.
The tools, and machinery used in the production of goods
- D.
A and B
- E.
B and C
Correct Answer
D. A and BExplanation
The correct answer is A and B. Capital refers to the tools, equipment, machinery, and factories used in the production of goods. This includes both the physical tools and the infrastructure necessary for production. Therefore, options A and B are both correct as they encompass these elements.Rate this question:
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- 6.
Definition of Labor?
- A.
People with all of the efforts, abilities, and skills
- B.
The people who are for hire for work
- C.
People with all of the workmanship, skills, and work
- D.
The act of performing work at any given time
Correct Answer
A. People with all of the efforts, abilities, and skillsExplanation
Labor refers to individuals who possess a combination of efforts, abilities, and skills. This definition encompasses the idea that labor involves not only physical work but also intellectual and creative contributions. It emphasizes the comprehensive nature of the workforce, highlighting that individuals bring various strengths and expertise to their roles. The term "labor" encompasses both manual and mental work, recognizing that people contribute to the economy and society through their diverse skills and capabilities.Rate this question:
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- 7.
Definition of Entrepreneur?
- A.
A risk taker in search of profits who's initila investment must be returned
- B.
A investor in search of profits who does something new with existing resources
- C.
A investor in search of profits who's initial investment must be returned
- D.
A risk taker in search of profits who does something new with existing resources
Correct Answer
D. A risk taker in search of profits who does something new with existing resourcesExplanation
An entrepreneur is someone who takes risks in order to make a profit by introducing something new or innovative using existing resources. This definition captures the essence of entrepreneurship, which involves identifying opportunities, taking calculated risks, and creating value by introducing new products, services, or business models. The emphasis on "doing something new" differentiates entrepreneurs from mere investors, while the mention of "existing resources" highlights the importance of resourcefulness and creativity in entrepreneurship.Rate this question:
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- 8.
What are the many payments for the factors of productions called?
- A.
Land - wages, labor - interest, capital - rent, entrepreneurs - profit
- B.
Land - rent, labor - wages, capital - interest, entrepreneurs - profit
- C.
Land - profit, labor - rent, capital - wages, entrepreneurs - interest
- D.
Land - interest, labor - rent, capital - profit, entrepreneurs - wages
Correct Answer
B. Land - rent, labor - wages, capital - interest, entrepreneurs - profitExplanation
The correct answer is Land - rent, labor - wages, capital - interest, entrepreneurs - profit. This answer correctly identifies the payments for each factor of production. Land receives rent, labor receives wages, capital receives interest, and entrepreneurs receive profit.Rate this question:
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- 9.
What is opportunity cost?
- A.
The cost assosiated with any opportunity
- B.
Giving the cost in order to have the opportunity
- C.
The cost required in order to succeed
- D.
Giving something up to have something else
Correct Answer
D. Giving something up to have something elseExplanation
Opportunity cost refers to the concept of giving up or sacrificing one option in order to pursue or obtain another option. It is the value of the next best alternative that is foregone when a choice is made. In other words, when making a decision, the opportunity cost is what you give up or lose by choosing one option over another. It involves weighing the benefits and drawbacks of different choices and considering the potential benefits that could have been obtained from the alternative option.Rate this question:
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- 10.
What is PPF?
- A.
Possible Production Frontier
- B.
Production Possibilities Frontier
- C.
Probable Projection Frontier
- D.
Projected Possibilities Frontier
Correct Answer
B. Production Possibilities FrontierExplanation
The correct answer is Production Possibilities Frontier. PPF refers to the graphical representation of the different combinations of two goods or services that can be produced using limited resources and technology. It shows the maximum output that can be achieved given the available resources and the trade-offs between producing different goods. The PPF curve illustrates the concept of scarcity and opportunity cost in economics.Rate this question:
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- 11.
On the PPF how can a nation achieve growth?
- A.
By having more resources or increased productivity
- B.
By having an increase in supply and demand
- C.
By having less resources or declined productivity
- D.
By having an increase in resources and decrease in productivity
Correct Answer
A. By having more resources or increased productivityExplanation
A nation can achieve growth on the PPF by either having more resources or by increasing productivity. Having more resources means that the nation can produce more goods and services, which leads to economic growth. Increased productivity means that the nation can produce more output with the same amount of resources, which also leads to economic growth. Both of these factors contribute to the nation's ability to produce more and improve its overall economic performance.Rate this question:
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- 12.
What does a point inside the curve on a PPF represent?
- A.
Production at greater than its minimum potential
- B.
Production as less than its minimum potential
- C.
Production at greater than its maximum potential
- D.
Production as less than its maximum potential
Correct Answer
D. Production as less than its maximum potentialExplanation
A point inside the curve on a PPF represents production that is less than its maximum potential. This means that the economy is not utilizing all of its available resources efficiently and is producing below its maximum capacity. There may be factors such as unemployment, inefficiency, or underutilization of resources that are causing the economy to operate below its full potential.Rate this question:
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- 13.
What are the functions of the entrepreneur?
- A.
They provide the money necessary for the resources of land, labor, and capital
- B.
They provide the procedures that combines the resources of land, labor, and capital into new products
- C.
They provide the initiative that combines the resources of land, labor, and capital into new products
- D.
They provide the drive necessary for the resources of land, labor, and capital
Correct Answer
C. They provide the initiative that combines the resources of land, labor, and capital into new productsExplanation
The correct answer is "They provide the initiative that combines the resources of land, labor, and capital into new products." This answer accurately describes one of the key functions of an entrepreneur. Initiative refers to the ability to take action, make decisions, and drive the process of combining resources to create new products. Entrepreneurs are known for their proactive approach in identifying opportunities, taking risks, and turning ideas into reality by mobilizing and coordinating the resources of land, labor, and capital.Rate this question:
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- 14.
Name three types of businesses
- A.
Traditional, command, market
- B.
Command, market, competitive
- C.
Traditional, market, competitive
- D.
Command, traditional, competitive
Correct Answer
A. Traditional, command, marketExplanation
The correct answer is traditional, command, market. These three types of businesses refer to different economic systems. Traditional businesses are based on customs and traditions, where economic decisions are made based on long-established practices. Command businesses are controlled by the government, where decisions are made centrally by a governing authority. Market businesses operate in a free market system, where economic decisions are determined by supply and demand forces in the marketplace.Rate this question:
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- 15.
Name the types of businesses
- A.
Proprietorship, corporation, industrial
- B.
Partnership, industrial, commercial
- C.
Corporation, proprietorship, commercial
- D.
Proprietorship, partnership, corporation
Correct Answer
D. Proprietorship, partnership, corporationExplanation
The answer "Proprietorship, partnership, corporation" correctly identifies the types of businesses. A proprietorship is a business owned and operated by a single individual. A partnership is a business owned by two or more individuals who share profits and liabilities. A corporation is a legal entity that is separate from its owners and shareholders. These three types of businesses represent common structures that individuals can choose when starting a business.Rate this question:
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- 16.
What are the goals of the American Free Enterprise?
- A.
Economic freedom, voluntary exchange, private property rights, profit motive, and competition
- B.
Economic freedom, lack on monopolies, private property rights, profit motive, and competition
- C.
Economic freedom, voluntary exchange, prevailence of rights, profit motive, and competition
- D.
Economic freedom, voluntary exchange, private property rights, profit margain reduction, and competition
Correct Answer
A. Economic freedom, voluntary exchange, private property rights, profit motive, and competitionExplanation
The goals of the American Free Enterprise include economic freedom, which allows individuals and businesses to make their own economic decisions without government interference. Voluntary exchange refers to the ability to freely buy and sell goods and services. Private property rights ensure that individuals have the right to own and control their own property. The profit motive drives businesses to maximize profits and incentivizes innovation and growth. Competition encourages businesses to strive for efficiency and offer better products and services to consumers.Rate this question:
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- 17.
What is the law of demand?
- A.
Rule stating that the quantity demanded of a good or service does not vary with its availability
- B.
Rule stating that the quantity demanded of a good or service does not vary with its price
- C.
Rule stating that the quantity demanded of a good or service varies inversely with its availability
- D.
Rule stating that the quantity demanded of a good or service varies inversely with its price
Correct Answer
D. Rule stating that the quantity demanded of a good or service varies inversely with its priceExplanation
The law of demand states that the quantity demanded of a good or service varies inversely with its price. This means that as the price of a good or service increases, the quantity demanded decreases, and vice versa. This relationship between price and quantity demanded is a fundamental principle in economics, as it helps to explain consumer behavior and market dynamics.Rate this question:
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- 18.
What is the law of supply?
- A.
The principle that suppliers will normally offer less for sale at high prices and more at lower prices
- B.
The principle that suppliers will normally offer more for sale at high prices and less at lower prices
Correct Answer
B. The principle that suppliers will normally offer more for sale at high prices and less at lower pricesExplanation
The law of supply states that suppliers will generally offer more for sale at higher prices and less at lower prices. This is because as prices increase, suppliers are incentivized to produce and sell more goods or services in order to maximize their profits. On the other hand, when prices are lower, suppliers may choose to reduce their production or withhold their goods in order to maintain profitability. This relationship between price and quantity supplied is a fundamental concept in economics.Rate this question:
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- 19.
What causes the demand curve to shift?
- A.
The increase/decrease in need
- B.
The increase/decrease in volume
- C.
The increase/decrease in price
- D.
The increase/decrease in production
Correct Answer
C. The increase/decrease in priceExplanation
The demand curve shifts when there is a change in price. An increase in price would cause the demand curve to shift leftward, indicating a decrease in demand. Conversely, a decrease in price would cause the demand curve to shift rightward, indicating an increase in demand. This is because as price increases, consumers are less willing to buy the product, resulting in a decrease in demand. On the other hand, as price decreases, consumers are more willing to buy the product, leading to an increase in demand.Rate this question:
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- 20.
What causes the increase in supply?
- A.
The increase/decrease in demand
- B.
The increase/decrease in production
- C.
The increase/decrease in volume
- D.
The increase/decrease in price
Correct Answer
A. The increase/decrease in demandExplanation
An increase in demand can cause an increase in supply because when there is an increase in demand for a particular product or service, producers are motivated to increase their production in order to meet the higher demand. This can be done by increasing the quantity of goods produced or by expanding production capacity. As a result, the supply of the product or service increases to match the increased demand. Conversely, a decrease in demand would likely lead to a decrease in supply as producers reduce their production levels to match the lower demand.Rate this question:
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- 21.
What is Shortage?
- A.
A situation in which the quantity demanded is greater than the quantity supplied at a given price
- B.
A situation in which the quantity demanded is less than the quantity supplied at a given price
- C.
A situation in which the quantity demanded is not offered by the manufacturer
- D.
A situation in which the quantity demanded can not meet the supply provided
Correct Answer
A. A situation in which the quantity demanded is greater than the quantity supplied at a given priceExplanation
Shortage refers to a situation where the quantity demanded exceeds the quantity supplied at a specific price. In other words, there is an insufficient supply to meet the demand at that particular price level. This can lead to various consequences such as higher prices, rationing, or even market imbalances.Rate this question:
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- 22.
What is Surplus?
- A.
A situation in which the quantity supplied is not met by the manufacturer
- B.
A situation in which the quantity demanded is greater than the quantity demanded at a given price
- C.
A situation in which the quantity supplied is less than the quantity demanded at a given price
- D.
A situation in which the quantity supplied is greater than the quantity demanded at a given price
Correct Answer
D. A situation in which the quantity supplied is greater than the quantity demanded at a given priceExplanation
Surplus refers to a situation in which the quantity supplied is greater than the quantity demanded at a given price. This means that there is an excess supply of a product or service in the market, leading to a surplus. In such a scenario, producers may have to lower prices or reduce production to match the lower demand. The surplus can result in a decrease in prices until equilibrium is reached, where quantity supplied equals quantity demanded.Rate this question:
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- 23.
What is a price ceiling?
- A.
A minimum legal price in order to maintain agreement
- B.
A maximum legal price in order to maintain agreement
- C.
A maximum legal price that can be charged for a product
- D.
A minimum legal price that can be charged for a product
Correct Answer
C. A maximum legal price that can be charged for a productExplanation
A price ceiling is a maximum legal price that can be charged for a product. This means that the price of the product cannot exceed the specified limit set by the government or regulatory authority. The purpose of a price ceiling is to protect consumers by preventing prices from rising too high and making the product unaffordable. It is often implemented in markets where there is a concern about price gouging or monopolistic practices.Rate this question:
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- 24.
What is a price floor?
- A.
Highest legal price that can be paid for a good or service
- B.
Lowest legal price that can be paid for a good or service
- C.
Highest legal price that can be charged in order to maintain agreement
- D.
Lowest legal price that can be charged in order to maintain agreement
Correct Answer
B. Lowest legal price that can be paid for a good or serviceExplanation
A price floor is the lowest legal price that can be paid for a good or service. It is a government-imposed regulation that sets a minimum price that sellers can charge for a product or service. This is done to ensure that sellers receive a fair price and to protect certain industries or workers from being exploited by low wages. By setting a price floor, the government aims to create a minimum standard of living for workers and prevent prices from falling too low, which could lead to market inefficiencies.Rate this question:
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- 25.
What is elastic?
- A.
When a given change in price causes a relatively larger change in quantity demanded
- B.
When a given change in quantity demanded causes a relatively larger change in price
- C.
When a given change in price causes a relatively smaller change in quantity demanded
- D.
When a given change in quantity demanded causes a relatively smaller change in price
Correct Answer
A. When a given change in price causes a relatively larger change in quantity demandedExplanation
Elasticity refers to the responsiveness of quantity demanded to changes in price. When a given change in price causes a relatively larger change in quantity demanded, it indicates that the demand is elastic. This means that consumers are highly responsive to price changes, and a small increase or decrease in price can lead to a significant increase or decrease in the quantity demanded. Elasticity is important for businesses to understand as it helps determine how sensitive consumers are to changes in price and can influence pricing strategies and revenue projections.Rate this question:
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- 26.
What is inelastic?
- A.
When a given change in quantity demanded causes a relatively smaller change in price
- B.
When a given change in price causes a relatively larger change in the quantity demanded
- C.
When a given change in price causes a relatively smaller change in the quantity demanded
- D.
When a given change in quantity demanded causes a relatively larger change in price
Correct Answer
C. When a given change in price causes a relatively smaller change in the quantity demandedExplanation
When a given change in price causes a relatively smaller change in the quantity demanded, it indicates that the demand for the product is inelastic. This means that consumers are not very sensitive to changes in price and are willing to pay a higher price for the product. Inelastic demand often occurs for essential goods or products with limited substitutes, where consumers have fewer options and are willing to pay more regardless of price changes.Rate this question:
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- 27.
What is microeconomics?
- A.
The area of economics that deals with the behavior and decision making by small units
- B.
The area of economics that deals with the behavior and decision of the whole world
- C.
The branch of economics that deals with the economy as a whole
- D.
The branch of economics that deals with the monetary value
Correct Answer
A. The area of economics that deals with the behavior and decision making by small unitsExplanation
Microeconomics is the branch of economics that focuses on the behavior and decision making of individual economic units such as households, firms, and industries. It examines how these units make choices regarding the allocation of scarce resources and the determination of prices in specific markets. Microeconomics analyzes factors such as supply and demand, production and consumption, market structures, and the effects of government policies on individual economic agents. By studying the behavior of small units, microeconomics provides insights into the functioning of the overall economy.Rate this question:
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- 28.
What is macroeconomics?
- A.
The branch of economics that deals with the monetary value
- B.
The area of economics that deals with behavior and decision making by small units
- C.
The branch of economics that deals with the economy as a whole
- D.
The are of economics that deals with the behavior and decision making of your personal life
Correct Answer
C. The branch of economics that deals with the economy as a wholeExplanation
Macroeconomics is the branch of economics that focuses on studying the economy as a whole. It examines aggregate variables such as national income, unemployment rates, inflation, and economic growth to understand and analyze the overall performance and behavior of an economy. Macroeconomics seeks to understand the factors that influence the overall level of economic activity, including government policies, international trade, and monetary and fiscal policies. By studying macroeconomics, economists can gain insights into how different sectors of the economy interact and how changes in one area can impact the overall economy.Rate this question:
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- 29.
What are the three functions of money?
- A.
Measure of value, store of value, and direction of value
- B.
Medium of exchange, measure of value, and store or value
- C.
Measure of value, medium of exchange, and compliance of value
- D.
Medium of exchange, store of value, direction of value
Correct Answer
B. Medium of exchange, measure of value, and store or valueExplanation
The three functions of money are medium of exchange, measure of value, and store of value. Money serves as a medium of exchange because it is widely accepted as a form of payment for goods and services. It also acts as a measure of value, allowing for the comparison of the worth of different goods and services. Lastly, money functions as a store of value, meaning it can be saved and used for future purchases or investments.Rate this question:
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- 30.
What are the characteristics of money?
- A.
Durability, divisibility, limited availability, countability
- B.
Divisibility, durability, portability, countability
- C.
Limited availability, portability, durability, countability
- D.
Portablility, durability, divisibility, limited availability
Correct Answer
D. Portablility, durability, divisibility, limited availabilityExplanation
Money needs to be portable so that it can be easily carried and exchanged. Durability is important because money needs to withstand frequent handling and remain in good condition. Divisibility allows money to be easily divided into smaller units for transactions. Limited availability ensures that money maintains its value and is not easily counterfeited.Rate this question:
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- 31.
What is commodity money?
- A.
Money that has a primary value in being a commodity
- B.
Money that has been borrowed from the bank as a loan
- C.
Money that has an alternative use as an economic good, or commodity
- D.
Money that has an alternative use as a external way of paying for goods or services
Correct Answer
C. Money that has an alternative use as an economic good, or commodityExplanation
Commodity money refers to a form of currency that has intrinsic value as a commodity or economic good. This means that the money itself has value beyond its use as a medium of exchange. For example, gold and silver have historically been used as commodity money because they have value in industries such as jewelry and electronics. In contrast, fiat money, which is not backed by a physical commodity, derives its value solely from government regulation or law. Therefore, the correct answer is "Money that has an alternative use as an economic good, or commodity."Rate this question:
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- 32.
What is the FOMC?
- A.
Federal Opinion Money Committee
- B.
Federal Open Minded Committee
- C.
Federal Open Market Committee
- D.
Federal Option Money Committee
Correct Answer
C. Federal Open Market CommitteeExplanation
The correct answer is the Federal Open Market Committee (FOMC). This committee is responsible for making monetary policy decisions in the United States. It consists of members from the Federal Reserve Board and regional Federal Reserve Bank presidents. The FOMC meets regularly to discuss economic conditions and determine the appropriate course of action to achieve the Federal Reserve's dual mandate of price stability and maximum employment. They have the power to influence interest rates and the money supply through various tools such as open market operations.Rate this question:
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- 33.
What is inflation?
- A.
A fall in the general level of prices occurs, workers need more money to pay for goods, clothing, and shelter
- B.
A rise in the general level of prices occurs, workers need less money to pay for goods, clothing and shelter
- C.
A fall in the general level of prices occurs, workers need less money to pay for goods, clothing and shelter
- D.
A rise in the general level of prices occurs, workers need more money to pay for goods, clothing, and shelter
Correct Answer
D. A rise in the general level of prices occurs, workers need more money to pay for goods, clothing, and shelterExplanation
Inflation refers to a rise in the general level of prices. When inflation occurs, the cost of goods, clothing, and shelter increases. As a result, workers need more money to afford these items. This is because the purchasing power of money decreases during inflation, and it takes more currency to purchase the same goods and services.Rate this question:
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- 34.
What are the 4 stages of a business cycle?
- A.
Peak, trough, expansion, recovery
- B.
Recession, peak, trough, expansion
- C.
Recession, peak, trough, recovery
- D.
Peak, recession, recovery, expansion
Correct Answer
B. Recession, peak, trough, expansionExplanation
The correct answer is "Recession, peak, trough, expansion." This is because the business cycle typically begins with a period of recession, characterized by a decline in economic activity. This is followed by a peak, which marks the highest point of economic growth. After the peak, there is a decline in economic activity known as a trough. Finally, the economy starts to recover and experiences a period of expansion. Therefore, the correct sequence of the stages of a business cycle is recession, peak, trough, and expansion.Rate this question:
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- 35.
Name the three types of taxes?
- A.
Proportional, proposed, regressive
- B.
Regressive, proportional, probable
- C.
Regressive, retaining, proposed
- D.
Progressive, proportional, regressive
Correct Answer
D. Progressive, proportional, regressiveExplanation
The three types of taxes are progressive, proportional, and regressive. Progressive taxes are based on the principle that individuals with higher incomes should pay a higher percentage of their income in taxes. Proportional taxes, also known as flat taxes, require all individuals to pay the same percentage of their income in taxes. Regressive taxes, on the other hand, impose a higher tax burden on individuals with lower incomes, as the percentage of their income paid in taxes decreases as their income increases.Rate this question:
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- 36.
What are the two principles of taxation?
- A.
Ability-to-pay, determination
- B.
Benefit, ability-to-pay
- C.
Profit, productivity
- D.
Projection, benefit
Correct Answer
B. Benefit, ability-to-payExplanation
The two principles of taxation are benefit and ability-to-pay. The benefit principle states that individuals should pay taxes based on the benefits they receive from government services. The ability-to-pay principle suggests that individuals should contribute to taxes based on their ability to pay, taking into consideration their income and wealth. These principles ensure that taxation is fair and equitable, as those who benefit more from government services or have a higher ability to pay contribute more towards taxes.Rate this question:
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- 37.
Who is Adam Smith?
- A.
A german economist
- B.
A sweedish economist
- C.
A scottish economist
- D.
A english economist
Correct Answer
C. A scottish economistExplanation
Adam Smith is known as a Scottish economist. He is considered one of the founding fathers of modern economics and is best known for his influential book, "The Wealth of Nations." In this book, Smith discussed the principles of free markets, division of labor, and the invisible hand theory. His ideas laid the foundation for classical economics and greatly influenced economic thought and policy.Rate this question:
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- 38.
What does the word "Laissez Faire" mean?
- A.
The philosophy that government should not interfere with business activity
- B.
The law stating that the government can at any time interfere with a businesses activity
- C.
The philosophy that individuals should not interfere with government activity
- D.
The law stating that the government cannot at any time interfere with a businesses activity
Correct Answer
A. The pHilosopHy that government should not interfere with business activityExplanation
The term "Laissez Faire" refers to the philosophy that government should not interfere with business activity. It advocates for minimal government intervention in economic affairs, allowing businesses to operate freely without excessive regulations or restrictions. This approach is based on the belief that the market can regulate itself and that individual economic actors should have the freedom to make their own decisions without government interference.Rate this question:
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- 39.
What is the law of variable proportions?
- A.
States that in the long run, input will change as one output varies while the others are held constant
- B.
States that in the short run, input will change as one output varies while the others are held constant
- C.
States that in the short run, output will change as one input varies while the others are held constant
- D.
States that in the long run, output will change as one input varies while the others are held constant
Correct Answer
C. States that in the short run, output will change as one input varies while the others are held constantExplanation
The law of variable proportions states that in the short run, output will change as one input varies while the others are held constant. This means that if one input, such as labor or capital, is increased or decreased while keeping the other inputs constant, the output will also change. This law highlights the relationship between inputs and outputs in the short run and helps in understanding the production process and optimizing resource allocation.Rate this question:
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- 40.
What is the civilian labor workforce?
- A.
Men and women 16 years old and over who are not working or cannot get a job
- B.
Men and women 18 years old and over who are either working or actively looking for a job
- C.
Men and women 18 years old and over who are not working or cannot get a job
- D.
Men and women 16 years old and over who are either working or actively looking for a job
Correct Answer
D. Men and women 16 years old and over who are either working or actively looking for a jobExplanation
The civilian labor workforce refers to men and women who are 16 years old and above and are either currently employed or actively seeking employment. This group includes individuals who are actively participating in the job market and are available for work. It does not include those who are not working or unable to find employment.Rate this question:
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- 41.
Define merger?
- A.
A combination of two or more buisnesses to form a single firm
- B.
A combination of three or more buisnesses to form a single firm
- C.
A combination of four of more buisnesses to form a single firm
Correct Answer
A. A combination of two or more buisnesses to form a single firmExplanation
A merger is the combination of two or more businesses to form a single firm. This allows the companies involved to pool their resources, expertise, and market share, leading to potential synergies and increased efficiency. By merging, the companies can benefit from economies of scale, expand their customer base, and gain a competitive advantage in the market. This strategic move often aims to increase market share, reduce costs, and enhance profitability for the newly formed entity.Rate this question:
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- 42.
What is a horizontal merger?
- A.
When two or more firms that produce the same kind of product join
- B.
When two or more firms that produce a different kind of product join
- C.
When three or more firms that produce the same kind of product join
- D.
When three of more firms that produce a different kind of product join
Correct Answer
A. When two or more firms that produce the same kind of product joinExplanation
A horizontal merger refers to the joining of two or more firms that produce the same kind of product. This type of merger allows the companies involved to combine their resources, increase their market share, and potentially reduce competition. By joining forces, these firms can achieve economies of scale, improve efficiency, and gain a stronger position in the market for their specific product.Rate this question:
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- 43.
What is a vertical merger?
- A.
When three or more firms involved in the same steps of manufacturing or marketing join
- B.
When two or more firms involved in the same steps of manufacturing or marketing join
- C.
When three or more firms involved in different steps of manufacturing or marketing join
- D.
When two or more firms involved in different steps of manufacturing or marketing join
Correct Answer
D. When two or more firms involved in different steps of manufacturing or marketing joinExplanation
A vertical merger refers to the joining of two or more firms that are involved in different steps of manufacturing or marketing. This means that the companies involved in the merger are in different parts of the supply chain, such as one firm being involved in manufacturing and another in marketing. This type of merger allows companies to integrate their operations and gain control over different stages of production or distribution, which can lead to increased efficiency and cost savings.Rate this question:
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- 44.
What does the word utility mean?
- A.
Ability of capacity of a good or service to be used in the manufacturing of a product
- B.
Lack of capability a good or service might have to be used in the manufacturing of a product
- C.
Ability or capacity of a good or service to be useful and give satisfaction to someone
- D.
Lack of capability a good or service might have to be useful and give satisfaction to someone
Correct Answer
C. Ability or capacity of a good or service to be useful and give satisfaction to someoneExplanation
The word "utility" refers to the ability or capacity of a good or service to be useful and give satisfaction to someone. It implies that the good or service can fulfill a need or desire and provide value to the person using it.Rate this question:
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- 45.
What is a fixed cost?
- A.
Cost of production that changes when output changes
- B.
Cost of purchasing that does not change when output changes
- C.
Cost of production that does not change when output changes
- D.
Cost of purchasing that changes when output changes
Correct Answer
C. Cost of production that does not change when output changesExplanation
A fixed cost is a cost of production that does not change when the output changes. This means that regardless of the level of production or the number of units produced, the fixed cost remains constant. Fixed costs are typically associated with expenses that do not vary with production levels, such as rent, salaries, and insurance. These costs are incurred regardless of the level of output and remain the same, providing stability to the overall cost structure of a business.Rate this question:
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- 46.
What is variable cost?
- A.
Cost that varies as output changes
- B.
Cost that does not vary as output changes
- C.
Cost that varies as production changes
- D.
Cost that does not vary as output changes
Correct Answer
A. Cost that varies as output changesExplanation
Variable cost refers to the cost that changes in direct proportion to the level of output or production. This means that as the output or production increases or decreases, the variable cost will also increase or decrease accordingly. Variable costs are typically associated with the cost of raw materials, direct labor, and other inputs that are directly linked to the production process. Unlike fixed costs, which remain constant regardless of the level of output, variable costs fluctuate with the changes in production.Rate this question:
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- 47.
What is total cost?
- A.
Variable plus fixed cost
- B.
All cost associated with production
- C.
All cost except for the cost of manufacturing
- D.
A and b
Correct Answer
D. A and bExplanation
The correct answer is "a and b" because total cost includes both variable and fixed costs, as well as all costs associated with production. This means that it encompasses all costs, including those related to manufacturing. Therefore, options "variable plus fixed cost" and "all cost associated with production" are both correct explanations for total cost.Rate this question:
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- 48.
What are marginal costs?
- A.
Extra cost of pruducing one additional unit of production
- B.
Additional cost associated with lack of demand
- C.
Cost above and beyond normal associated costs
- D.
Cost formed by excess production
Correct Answer
A. Extra cost of pruducing one additional unit of productionExplanation
Marginal costs refer to the additional cost incurred by producing one more unit of production. It represents the increase in total cost when output is increased by one unit. This concept helps businesses determine the optimal level of production by comparing the marginal cost with the marginal revenue. By understanding the marginal costs, companies can make informed decisions about pricing, production levels, and resource allocation to maximize their profitability.Rate this question:
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- 49.
What is the SEC?
- A.
Securities and Exchange Commission
- B.
Safety and Exemption Committee
- C.
Security of Environment Commission
- D.
Safety of Education Control
Correct Answer
A. Securities and Exchange CommissionExplanation
The SEC, or Securities and Exchange Commission, is a regulatory agency in the United States that is responsible for enforcing federal securities laws. It oversees the securities industry, including stock exchanges, brokerage firms, and investment advisors, to ensure fair and transparent markets. The SEC's main goal is to protect investors from fraudulent activities and promote capital formation. It requires companies to disclose relevant financial information to the public, thereby providing investors with the necessary information to make informed investment decisions. The SEC also has the authority to investigate and prosecute individuals or companies that violate securities laws.Rate this question:
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- 50.
What is the FDA?
- A.
Flooding Damage Association
- B.
Federal Drug Administration
- C.
Food and Drug Administration
- D.
Federal Department of Aviation
Correct Answer
C. Food and Drug AdministrationExplanation
The correct answer is Food and Drug Administration. The FDA is a regulatory agency in the United States that is responsible for protecting public health by ensuring the safety, efficacy, and security of human and veterinary drugs, biological products, medical devices, food supply, cosmetics, and products that emit radiation. They regulate and approve drugs and medical devices, conduct inspections of facilities, enforce regulations, and monitor the safety of products in the market.Rate this question:
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Current Version
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Mar 22, 2023Quiz Edited by
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Dec 17, 2014Quiz Created by
CJACOBSEN
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