Hardest Trivia Quiz On Economics
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Which is not a "factor of production"?
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Land
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Labor
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Capital
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Opportunity Cost
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About This Quiz
Are you about to sit for your first-semester examination for your Economics final? The quiz below is made upon fifty questions and is considered one of the hardest trivia quizzes there is on economics. Give it a try and know that if you manage to get more than half the marks, then you are all set to go. All the See morebest!
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- 2.
What is opportunity cost?
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Best alternative given up as a result from decision
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Cost of starting a business
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A situation in which people do not have enough resources
Correct Answer
A. Best alternative given up as a result from decisionExplanation
Opportunity cost refers to the best alternative that is foregone when making a decision. It represents the value of the next best alternative that is sacrificed in order to choose a particular option. In other words, it is the cost of choosing one option over another. By selecting a specific alternative, one must give up the benefits or opportunities that could have been gained from choosing the alternative that was not selected. This concept is important in economics and decision-making as it helps individuals and businesses assess the potential benefits and drawbacks of different choices.Rate this question:
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- 3.
How do banks create money?
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Saving money
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Selling goods
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Making loans
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Taking money
Correct Answer
A. Making loansExplanation
Banks create money by making loans. When a bank approves a loan, they create a deposit in the borrower's account, which increases the money supply. This is because the loaned amount is considered as new money in circulation, even though it is created electronically. As borrowers spend this newly created money, it enters the economy and stimulates economic activity. Thus, making loans is a key way for banks to create money and support economic growth.Rate this question:
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- 4.
Why are tariffs created?
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Make less money
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Celebrate a national day
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Protect infant industries
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Provide more time to produce a product
Correct Answer
A. Protect infant industriesExplanation
Tariffs are created to protect infant industries. When a country wants to develop and nurture its domestic industries, it may impose tariffs on imported goods. This is done to make foreign products more expensive and less competitive, thereby giving a chance for domestic industries to grow and establish themselves. By protecting infant industries, countries can safeguard their economy, create jobs, and promote self-sufficiency in certain sectors.Rate this question:
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- 5.
A rise in the general price level of goods and services?
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Promotion
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Inflation
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Rise
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Deflation
Correct Answer
A. InflationExplanation
Inflation refers to a general increase in the price level of goods and services over a period of time. It is characterized by a decrease in the purchasing power of a currency. Therefore, a rise in the general price level of goods and services aligns with the concept of inflation.Rate this question:
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- 6.
What is the law of supply?
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Price increases// quantity supplied increases
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Price increases// quantity supplied decreases
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Price increases// quantity demand increases
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Price increases// quantity demand decreases
Correct Answer
A. Price increases// quantity supplied increasesExplanation
The law of supply states that as the price of a good or service increases, the quantity supplied by producers also increases. This is because higher prices incentivize producers to supply more of the good or service in order to maximize their profits. As a result, the supply curve slopes upward, indicating a positive relationship between price and quantity supplied.Rate this question:
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- 7.
What is the law of demand?
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Price increases// quantity supplied increases
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Price increases// quantity supplied decreases
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Price increases// quantity demand increases
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Price increases// quantity demand decreases
Correct Answer
A. Price increases// quantity demand decreasesExplanation
The law of demand states that as the price of a good or service increases, the quantity demanded by consumers decreases. This means that when the price of a product goes up, consumers are less willing or able to purchase it, resulting in a decrease in demand. This inverse relationship between price and quantity demanded is a fundamental concept in economics.Rate this question:
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- 8.
All resources are
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Unlimited.
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Limited.
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Everlasting.
Correct Answer
A. Limited.Explanation
The correct answer is "limited." This means that resources are not infinite or unlimited in supply. They have a finite quantity and can be depleted or exhausted over time. This implies that there are constraints and limitations on the availability of resources, which necessitates careful management and conservation to ensure their sustainable use.Rate this question:
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- 9.
The inability to satisfy all wants at the same time is
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Resources.
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Goods.
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Taxes.
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Scarcity.
Correct Answer
A. Scarcity.Explanation
Scarcity refers to the limited availability of resources in comparison to unlimited wants and needs. It implies that resources are insufficient to fulfill all desires and demands simultaneously. This concept highlights the fundamental economic problem and the necessity of making choices and trade-offs. The other options, such as resources, goods, and taxes, do not directly relate to the idea of insufficiency or limited availability.Rate this question:
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- 10.
What does FDIC stand for?
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Federal Deposit Insurance Corporation
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Financial Directory Incorporated Company
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Federal Deposit Information Company
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None of the above
Correct Answer
A. Federal Deposit Insurance CorporationExplanation
The correct answer is Federal Deposit Insurance Corporation. The FDIC is a government agency that provides deposit insurance to banks and savings associations in the United States. It was created in 1933 in response to the widespread bank failures during the Great Depression. The FDIC's main purpose is to maintain stability and public confidence in the nation's financial system by insuring deposits, examining and supervising financial institutions, and managing receiverships of failed banks.Rate this question:
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- 11.
Which is an example of a stock exchange in the US?
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DJIA
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NYSE
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S&P 500
Correct Answer
A. NYSEExplanation
The New York Stock Exchange (NYSE) is an example of a stock exchange in the US. It is the largest stock exchange in the world by market capitalization and is located on Wall Street in New York City. The NYSE facilitates the buying and selling of stocks and other securities, providing a platform for investors and companies to trade and raise capital. It is a key player in the global financial market and is known for its iconic trading floor and opening bell ceremony.Rate this question:
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- 12.
What is the act of giving up one benefit in order to gain another greater benefit?
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Trade-off
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Opportunity cost
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Marginal cost
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Marginal benefit
Correct Answer
A. Trade-offExplanation
A trade-off refers to the act of sacrificing or giving up one benefit or advantage in order to obtain another benefit that is considered to be greater. It involves making a decision where one must weigh the pros and cons of different options and choose the option that offers the most favorable outcome, even if it means giving up something else in return. This concept is commonly used in economics and decision-making processes to assess the opportunity cost of choosing one alternative over another.Rate this question:
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- 13.
What is the desire to own something and the ability to pay for it?
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Demand curve
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Law of demand
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Demand
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Income effect
Correct Answer
A. DemandExplanation
Demand refers to the desire or want for a particular product or service, combined with the ability and willingness to pay for it. It represents the quantity of a good or service that consumers are willing and able to purchase at a given price. In this context, the desire to own something and the ability to pay for it perfectly aligns with the concept of demand.Rate this question:
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- 14.
What Federal Reserve district is Evansville a part of?
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Minneapolis
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Chicago
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Cleveland
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St. Louis
Correct Answer
A. St. LouisExplanation
Evansville is a city located in the state of Indiana, which falls under the jurisdiction of the Federal Reserve Bank of St. Louis. The Federal Reserve System is divided into twelve districts, each with its own Federal Reserve Bank. These banks are responsible for implementing monetary policy, supervising and regulating banks, and providing financial services to depository institutions. Since Evansville is located in Indiana, it is part of the St. Louis Federal Reserve district.Rate this question:
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- 15.
If the Reserve requirement is 20% and a $1,000 deposit is made in a bank. How many dollars of the deposit must the bank hold in required reserves?
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$200
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$20
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$100
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$400
Correct Answer
A. $200Explanation
The correct answer is $200. The reserve requirement is the percentage of deposits that banks are required to hold as reserves. In this case, the reserve requirement is 20%. Therefore, the bank must hold 20% of the $1,000 deposit, which is $200, in required reserves.Rate this question:
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- 16.
Under what president was the Federal Reserve System created?
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Richard Nixon
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Thomas Jefferson
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Woodrow Wilson
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George Bush
Correct Answer
A. Woodrow WilsonExplanation
The correct answer is Woodrow Wilson. The Federal Reserve System was created during his presidency in 1913. Wilson signed the Federal Reserve Act into law, establishing the central banking system in the United States. This system was created in response to financial panics and aimed to provide stability and regulation to the country's banking and monetary system.Rate this question:
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- 17.
What is the type of unemployment that occurs when people take time to find a job?
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Cyclical
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Seasonal
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Structural
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Frictional
Correct Answer
A. FrictionalExplanation
Frictional unemployment occurs when people are in the process of transitioning between jobs or are searching for employment. It is a temporary type of unemployment that happens due to factors such as job changes, relocation, or individuals entering the job market for the first time. During this period, individuals are actively seeking employment but have not yet found a suitable job. Therefore, the correct answer is frictional.Rate this question:
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- 18.
What is the type of unemployment that occurs when workers’ skills do not match those needed for the jobs that are now available?
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Cyclical
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Seasonal
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Structural
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Frictional
Correct Answer
A. StructuralExplanation
Structural unemployment occurs when workers' skills do not align with the skills required for the available jobs. This type of unemployment is caused by changes in the structure of the economy, such as technological advancements or shifts in consumer demand. When workers lack the necessary skills or qualifications for the available jobs, they become structurally unemployed. This type of unemployment is not related to the business cycle or seasonal factors, but rather to long-term changes in the economy.Rate this question:
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- 19.
What is the name of the trade agreement between U.S., Canada, and Mexico?
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NAFTA
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FACTA
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NAP
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None of the above
Correct Answer
A. NAFTAExplanation
NAFTA stands for the North American Free Trade Agreement. It is a trade agreement between the United States, Canada, and Mexico. This agreement aims to eliminate trade barriers and promote economic integration among the three countries. NAFTA has been in effect since 1994 and has had a significant impact on trade and investment in North America. It has facilitated the movement of goods, services, and investments between the member countries, leading to increased economic growth and job creation.Rate this question:
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- 20.
What is the solution to the national debt?
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Decrease spending
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Raise taxes
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All of the above
Correct Answer
A. All of the aboveExplanation
The solution to the national debt requires both decreasing spending and raising taxes. Decreasing spending helps to reduce the amount of money the government is borrowing, while raising taxes increases the revenue that the government receives. By implementing both measures, the government can work towards reducing the national debt and achieving a more sustainable financial situation.Rate this question:
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- 21.
What is a tax on something you own?
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Income tax
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Property tax
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Sales tax
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All of the above
Correct Answer
A. Property taxExplanation
A property tax is a tax imposed on the ownership of real estate or other property. It is typically based on the value of the property and is used to fund local government services such as schools, roads, and public safety. Unlike income tax, which is based on a person's earnings, or sales tax, which is based on the purchase of goods and services, property tax specifically targets the ownership of property. Therefore, property tax is the correct answer for a tax on something you own.Rate this question:
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- 22.
In what way do banks pay customers?
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A nice visit to your home
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Interest
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An I.O.U
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Money that you lost
Correct Answer
A. InterestExplanation
Banks pay customers through interest, which is the amount of money earned on an account balance or investment. When customers deposit money in a bank, the bank uses that money to provide loans and other financial services. In return, the bank pays interest to the customers as a form of compensation for using their funds. The interest rate is typically a percentage of the deposited amount and is paid periodically, such as monthly or annually. This allows customers to earn additional income on their savings or investments.Rate this question:
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- 23.
What is a cost that does not change?
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Variable cost
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Total cost
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Fixed cost
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Marginal cost
Correct Answer
A. Fixed costExplanation
Fixed cost is a cost that remains constant regardless of the level of production or sales. It does not change in the short term, regardless of the changes in output or sales volume. Fixed costs are incurred regardless of the level of activity, such as rent, insurance, salaries, or lease payments. These costs are considered fixed because they do not vary with changes in production or sales levels.Rate this question:
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- 24.
What is a cost that changes do to the change in quantity produced?
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Marginal cost
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Fixed cost
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Variable cost
Correct Answer
A. Variable costExplanation
Variable cost is a cost that changes due to the change in quantity produced. This means that as the quantity of goods or services produced increases or decreases, the variable cost will also increase or decrease accordingly. Variable costs are directly related to the level of production and include expenses such as raw materials, direct labor, and utilities. Unlike fixed costs, which remain constant regardless of the level of production, variable costs fluctuate and can be controlled by adjusting the quantity of production.Rate this question:
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- 25.
What does GDP stand for?
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Gross Domestic Product
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Gross Domestic Production
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Great Developing Products
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Great Depression Period
Correct Answer
A. Gross Domestic ProductExplanation
GDP stands for Gross Domestic Product, which is a measure of the total value of all goods and services produced within a country's borders in a specific time period. It is used to gauge the economic health and growth of a nation. The other options, Gross Domestic Production, Great Developing Products, and Great Depression Period, are incorrect and do not accurately represent the meaning of GDP.Rate this question:
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- 26.
This economic system is a market based system in which the government is involved to some extent?
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Traditional
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Centrally planned
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Mixed
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Free market
Correct Answer
A. MixedExplanation
A mixed economic system is a market-based system in which the government is involved to some extent. This means that while individuals and businesses have the freedom to make their own economic decisions and engage in voluntary transactions, the government also plays a role in regulating and controlling certain aspects of the economy. This involvement can include implementing policies to protect consumers, providing public goods and services, and regulating industries to prevent monopolies or unfair practices. In a mixed economy, there is a combination of private enterprise and government intervention, allowing for both market forces and government influence to shape the economy.Rate this question:
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- 27.
In this economic system the government makes all decisions on the three key economic questions?
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Traditional
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Centrally planned
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Mixed
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Free market
Correct Answer
A. Centrally plannedExplanation
In a centrally planned economic system, the government has complete control and authority over making decisions on the three key economic questions: what to produce, how to produce, and for whom to produce. The government determines what goods and services are produced, how they are produced, and who gets access to them based on their own centralized planning and allocation of resources. This system is characterized by government ownership of industries and resources, as well as a lack of individual economic freedom and private property rights.Rate this question:
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- 28.
This economic system relies on habit custom or ritual to answer the three key economic questions?
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Traditional
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Centrally planned
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Mixed
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Free market
Correct Answer
A. TraditionalExplanation
Traditional economic systems rely on habit, custom, or ritual to answer the three key economic questions. In these systems, economic decisions are based on long-standing traditions and cultural practices that have been passed down through generations. This means that individuals and communities produce and consume goods and services in a manner that aligns with their customs and traditions. Traditional economies often prioritize stability and continuity over individual choice and innovation.Rate this question:
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- 29.
Farmers market is an example of which market structure?
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Perfect competition
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Monopoly
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Monopolistic competition
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Oligopoly
Correct Answer
A. Perfect competitionExplanation
A farmers market is an example of perfect competition because it consists of a large number of small-scale farmers selling similar agricultural products. In perfect competition, there are many buyers and sellers, homogeneous products, easy entry and exit into the market, and no single seller or buyer can influence the market price. In a farmers market, each farmer has little control over the market price and must accept the prevailing price set by the forces of supply and demand.Rate this question:
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- 30.
Vectren is an example of which market structure?
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Perfect competition
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Monopoly
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Monopolistic competition
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Oligopoly
Correct Answer
A. MonopolyExplanation
Vectren is an example of a monopoly because it is the only provider of natural gas and electricity in its service area. A monopoly occurs when there is a single seller or producer in the market, giving them complete control over the supply and pricing of the product or service. In this case, Vectren has no direct competition, allowing them to set prices and make decisions without any significant market pressure.Rate this question:
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- 31.
A gas station is an example of which market structure?
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Perfect competition
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Monopoly
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Monopolistic competition
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Oligopoly
Correct Answer
A. Monopolistic competitionExplanation
A gas station is an example of monopolistic competition because there are multiple gas stations in the market offering similar but differentiated products. Each gas station has some control over the price they charge and can differentiate themselves through branding, location, and services offered. However, there is still some competition among gas stations as consumers have the option to choose between different stations based on factors such as price, convenience, and loyalty programs.Rate this question:
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- 32.
The auto industry is an example of which market structure?
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Perfect competition
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Monopoly
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Monopolistic competition
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Oligopoly
Correct Answer
A. OligopolyExplanation
The auto industry is an example of an oligopoly market structure. In an oligopoly, there are a few large firms that dominate the market and have significant control over prices and production. The auto industry is characterized by a small number of major companies, such as Ford, General Motors, and Toyota, which have a significant market share and compete with each other. These companies have the ability to influence prices and engage in non-price competition, such as product differentiation and advertising, making oligopoly an appropriate market structure for the auto industry.Rate this question:
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- 33.
What is the type of unemployment that occurs when industries slow or shut down for a period of time?
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Frictional
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Structural
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Seasonal
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Cyclical
Correct Answer
A. SeasonalExplanation
Seasonal unemployment refers to the type of unemployment that occurs when industries slow down or shut down temporarily due to seasonal factors. This can happen in industries such as tourism, agriculture, or retail, where demand for certain products or services fluctuates throughout the year. For example, ski resorts may experience a decrease in demand and lay off workers during the summer months. Similarly, agricultural workers may be unemployed during the off-season. This type of unemployment is temporary and predictable, as it is directly related to the seasonal nature of certain industries.Rate this question:
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- 34.
What is the type of unemployment that rises during economic downturns and falls when the economy improves?
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Frictional
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Structural
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Seasonal
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Cyclical
Correct Answer
A. CyclicalExplanation
Cyclical unemployment is the type of unemployment that rises during economic downturns and falls when the economy improves. This type of unemployment is directly related to the business cycle and occurs when there is a decrease in overall economic activity. During economic downturns, businesses may have to lay off workers due to decreased demand for goods and services. As the economy improves and businesses start to expand again, cyclical unemployment decreases as more job opportunities become available.Rate this question:
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- 35.
Which is the most complex form of business?
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Franchise
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Corporation
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Partnership
Correct Answer
A. CorporationExplanation
A corporation is the most complex form of business because it is a legal entity that is separate from its owners, known as shareholders. It has its own rights, responsibilities, and liabilities. Corporations require more legal formalities, such as registration, issuing shares, and following specific governance rules. They also have a more complex organizational structure with shareholders, directors, and officers. Additionally, corporations have more regulatory requirements and are subject to more extensive taxation and reporting obligations compared to other forms of business.Rate this question:
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- 36.
What is a complimentary good?
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Toothpaste and dental floss
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What bread is to butter
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Coffee and tea
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Smartphones and headphones
Correct Answer
A. What bread is to butterExplanation
Toothpaste and dental floss (These are not complementary; they serve different purposes in oral hygiene.)
Coffee and tea (While they are similar beverages, they are not necessarily complementary; people may choose one or the other.)
Smartphones and headphones (While they are often used together, they are not strictly complementary; people use headphones for various audio sources, not just smartphones.)Rate this question:
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- 37.
What is the period of economic decline marked by falling real GDP?
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Expansion
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Peak
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Contraction
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Trough
Correct Answer
A. ContractionExplanation
The period of economic decline marked by falling real GDP is referred to as a contraction. During this phase, the economy experiences a decrease in economic activity, resulting in a decline in the overall production of goods and services. This contraction is often accompanied by a decrease in consumer spending, business investment, and employment levels. As a result, the economy contracts, leading to a decline in real GDP.Rate this question:
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- 38.
What is the period of economic growth as measured by rise in real GDP?
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Expansion
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Contraction
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Trough
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Peak
Correct Answer
A. ExpansionExplanation
The period of economic growth as measured by the rise in real GDP is referred to as expansion. During this phase, the economy experiences an increase in production, income, and employment. Expansion is characterized by positive economic indicators such as rising consumer spending, business investments, and overall economic activity. This period is often associated with low unemployment rates and increasing prosperity in the economy.Rate this question:
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- 39.
What is the height of an economic expansion when real GDP stops rising?
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Contraction
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Expansion
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Trough
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Peak
Correct Answer
A. PeakExplanation
The height of an economic expansion refers to the point at which real GDP stops rising. This is known as the peak of the business cycle. After reaching the peak, the economy enters a period of contraction, where real GDP starts to decline. Therefore, the correct answer is "Peak."Rate this question:
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- 40.
What is the lowest point of an economic contraction when real GDP stops falling?
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Expansion
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Contraction
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Trough
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Peak
Correct Answer
A. TroughExplanation
The lowest point of an economic contraction, when real GDP stops falling, is referred to as the trough. This is the stage in the business cycle where economic activity reaches its lowest point before starting to recover and move towards an expansion phase. During the trough, key economic indicators such as employment, production, and investment are at their lowest levels. It marks the end of the contraction phase and is followed by a period of economic recovery and growth.Rate this question:
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- 41.
What is stock?
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A chart that shows the size of a company
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Government revenue
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International currency
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Ownership in a corporation
Correct Answer
A. Ownership in a corporationExplanation
Stock refers to ownership in a corporation. When individuals or entities purchase stock in a company, they become shareholders and have a claim on the company's assets and earnings. Owning stock grants certain rights, such as voting on corporate decisions and receiving dividends. The value of a stock can fluctuate based on the company's performance and market conditions. Therefore, stock ownership represents a form of investment in a corporation and allows individuals to participate in its growth and success.Rate this question:
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- 42.
The demand curve will "shift to the right" for fuel efficient cars if the price of gas increases.
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True
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False
Correct Answer
A. TrueExplanation
When the price of gas increases, it becomes more expensive to fuel cars that are not fuel efficient. This leads to a decrease in demand for those cars and an increase in demand for fuel efficient cars. As a result, the demand curve for fuel efficient cars shifts to the right, indicating an increase in the quantity demanded at each price level. Therefore, the statement is true.Rate this question:
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- 43.
If Apple increases the price of the i-phone next month, the demand curve for i-phones next month will shift to the right.
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True
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False
Correct Answer
A. FalseExplanation
If Apple increases the price of the iPhone next month, the demand curve for iPhones next month will not shift to the right. This is because an increase in price usually leads to a decrease in demand, as consumers are less willing to purchase a product at a higher price. Therefore, the demand curve would shift to the left, indicating a decrease in demand.Rate this question:
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- 44.
If the U.S. government passes a law decreasing corporate taxes from 15% to 10%, the supply curve will shift to the right.
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True
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False
Correct Answer
A. TrueExplanation
When the U.S. government decreases corporate taxes, it reduces the cost of production for businesses. This leads to an increase in profitability and incentivizes businesses to produce more goods and services. As a result, the supply curve, which represents the relationship between the price of a product and the quantity supplied, will shift to the right. This indicates that businesses are willing to supply a larger quantity of goods and services at each price level.Rate this question:
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- 45.
If Industry X has to pay their employees next month $15/hr instead of $10/hr, the supply curve will shift to the right.
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True
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False
Correct Answer
A. FalseExplanation
When Industry X has to pay their employees more (increasing from $10/hr to $15/hr), this raises their production costs. Generally, higher production costs for a firm mean that it will supply less at each price point, leading to a shift of the supply curve to the left, not to the right. Therefore, the correct statement should be that the supply curve will shift to the left.Rate this question:
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- 46.
In order to be a smart investor, one needs to diversify thier investments.
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True
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False
Correct Answer
A. TrueExplanation
Diversifying investments is a strategy that involves spreading investments across different assets or sectors to reduce risk. By diversifying, an investor can minimize the impact of any single investment's performance on their overall portfolio. This approach allows for potential gains from multiple sources and helps protect against potential losses. Therefore, being a smart investor involves diversifying investments to achieve a balanced and resilient portfolio.Rate this question:
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- 47.
A__________ market is a prolonged period in which investments drop.
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Bear
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Bull
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None of the above
Correct Answer
A. BearExplanation
A bear market is a prolonged period in which investments drop. This means that the overall value of investments, such as stocks, bonds, and other assets, experiences a downward trend. During a bear market, investors tend to be pessimistic and may sell off their investments, causing prices to decline further. This is in contrast to a bull market, which is characterized by a sustained increase in investment prices. The term "bear" is often used to describe negative market conditions, reflecting the idea that bears attack by swiping downward with their paws.Rate this question:
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- 48.
A_______ market is prolonged period in which investments rise.
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Bear
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Bull
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None of the above
Correct Answer
A. BullExplanation
A bull market is a prolonged period in which investments rise. This means that the overall trend in the market is upward, with prices of stocks, bonds, or other investments consistently increasing over time. In a bull market, investors are optimistic and confident about the future prospects of the market, leading to increased buying activity. This positive sentiment often results in higher prices and potential profits for investors.Rate this question:
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- 49.
What is a tax on a good or service?
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Sales
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Excise
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Capital gains
Correct Answer
A. SalesExplanation
A tax on a good or service refers to a sales tax. This type of tax is imposed on the sale of goods and services and is usually a percentage of the purchase price. It is commonly levied by governments to generate revenue and is typically collected by the seller at the point of sale. Sales taxes can vary in rate and may be applied at different levels, such as national, state, or local levels.Rate this question:
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May 13, 2024Quiz Edited by
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Dec 07, 2009Quiz Created by
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