Economics Quiz

Which of the following is NOT a characteristic of a planned economy?

• Government allocates resources

• Private ownership of property

• Price controls

• Lack of competition

If the marginal cost of producing a good is rising, what does this indicate about the production process?

• Constant returns to scale

• Diminishing returns to a factor

• Economies of scale

• Maximum efficiency

A public good is characterized by:

• Being excludable and rival

• Being excludable but non-rival

• Being non-excludable and non-rival

• Being non-excludable but rival

Which of the following is an example of market failure?

• High inflation

• Monopolistic competition

• Over-consumption of demerit goods

• Economic growth

What happens when a government sets a price ceiling below the equilibrium price?

• Surplus of goods

• Shortage of goods

• Equilibrium quantity remains unchanged

• Excess supply

Which statement about Price Elasticity of Supply (PES) is correct?

• PES is always negative

• PES is more elastic in the short run

• PES measures the responsiveness of demand to changes in price

• PES is more elastic in the long run

A subsidy given to producers will:

• Shift the supply curve to the left

• Reduce consumer demand

• Lower the market price of the good

• Increase the cost of production

Which of the following is NOT included in the calculation of GDP?

• Consumer spending

• Business investments

• Value of exports

• Value of underground (illegal) transactions

Which type of unemployment occurs due to a mismatch between workers' skills and job requirements?

• Structural unemployment

• Seasonal unemployment

• Frictional unemployment

• Cyclical unemployment

What is the key feature of a regressive tax system?

• Higher-income earners pay a larger proportion of their income in tax

• Everyone pays the same percentage of income in tax

• Lower-income earners pay a larger proportion of their income in tax

• Taxes increase progressively with income