Economics Quiz

What is the study of economics based on objective analysis using facts and data called?

• Normative Economics

• Positive Economics

• Behavioral Economics

• Classical Economics

Which of the following is NOT one of the 10 Pillars of Economics mentioned in the study guide?

• Ceteris Paribus

• Rationality

• Incentives

• Monetary Policy

What is the additional cost of producing or consuming one more unit called?

• Marginal Benefit

• Marginal Cost

• Fixed Cost

• Variable Cost

Which type of economy is characterized by private ownership and minimal government intervention?

• Command Economy

• Traditional Economy

• Mixed Economy

• Capitalist Economy

Who wrote "Wealth of Nations"?

• John Maynard Keynes

• Karl Marx

• Adam Smith

• Milton Friedman

What does the Invisible Hand Theory suggest about markets?

• Markets require constant government intervention.

• Markets naturally return to equilibrium without government interference.

• Markets are always in a state of chaos.

• Markets are controlled by monopolies.

What is the Law of Diminishing Marginal Utility?

• The more a consumer has, the more satisfaction they get from each additional unit.

• The more a consumer has, the less satisfaction they get from each additional unit.

• The more a consumer has, the satisfaction remains constant from each additional unit.

• The more a consumer has, the satisfaction doubles from each additional unit.

If the Marginal Cost (MC) is $2 and the Marginal Utility (MU) is below $2 at 5 sodas, how many sodas should be consumed?

• 0 sodas

• 2 sodas

• 4 sodas

• 5 sodas

What does a budget line represent?

• The total income of an individual.

• The alternate combinations of two different goods that can be purchased with a given outcome and prices.

• The savings plan for future expenses.

• The amount of debt an individual can incur.

What is disposable income?

• The total income before taxes.

• The income left over after taxes.

• The income used for savings.

• The income used for debt repayment.