Econ Basics Quiz

What does the law of demand state?

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

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

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

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

What is a market structure characterized by a single seller and no close substitutes for the product called?

• Monopoly

• Oligopoly

• Perfect competition

• Monopolistic competition

Which economic system relies on the customs, history, and time-honored beliefs of the society?

• Capitalism

• Socialism

• Traditional economy

• Mixed economy

What does opportunity cost refer to?

• The cost of choosing one option over another

• The total cost of production

• The cost of goods sold

• The cost of labor

In the circular flow model, households __________.

• produce goods and services

• consume goods and services

• regulate the economy

• distribute resources

What role does the government play in a free market economy?

• It does not interfere at all.

• It controls all economic activities.

• It provides public goods and services.

• It owns the means of production.

What does the law of supply state?

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

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

• As the price of a good decreases, the quantity supplied remains unchanged.

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

Which market structure is characterized by many sellers and differentiated products?

• Monopoly

• Oligopoly

• Perfect competition

• Monopolistic competition

In which economic system do government decisions play a key role in the economy alongside market forces?

• Capitalism

• Socialism

• Traditional economy

• Mixed economy

The opportunity cost of attending college is best described as __________.

• the tuition fees only

• the total of tuition fees and the cost of books

• the income one foregoes to attend college

• the sum of all college-related expenses