Q: If a country’s GDP increases from $$1,000$$ billion to $$1,050$$ billion in one year, what is the GDP growth rate?

$$\frac{1,050 - 1,000}{1,000} \times 100 = 5\%$$

Question 1

Which of the following best describes the concept of 'division of labor' in microeconomics?

Accepted Answer

The way production is split into a number of tasks, with different workers performing specific tasks to increase efficiency.

Question 2

Suppose a factory can produce 100 units of a product per day when each worker specializes in a single task, but only 60 units per day when each worker performs all tasks. What economic principle does this scenario illustrate?

Accepted Answer

Division of labor increases productivity

Question 3

Which equation correctly represents the calculation of Gross Domestic Product (GDP)?

Accepted Answer

$$GDP = C + I + G + (X - M)$$

Question 4

A country produces $$500$$ units of goods domestically and exports $$200$$ units, while importing $$150$$ units. What is the value of net exports?

Accepted Answer

$$200 - 150 = 50$$

Question 5

Which of the following is an example of a microeconomic issue?

Accepted Answer

How a household decides to allocate its monthly budget between groceries and entertainment.

Question 6

In a traditional economy, how are goods and services typically allocated?

Accepted Answer

By customs, traditions, and occupations passed down in the family.

Question 7

If the opportunity cost of producing one more unit of a good increases as more is produced, which economic concept does this illustrate?

Accepted Answer

Law of increasing opportunity cost

Question 8

Which of the following best describes a market economy?

Accepted Answer

An economy where buyers and sellers interact in markets to determine prices and allocation of resources.

Question 9

A firm decides to focus on producing only one type of product and outsources other tasks to specialized companies. Which concept does this scenario best illustrate?

Accepted Answer

Division of labor and specialization

Question 10

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

Accepted Answer

Prices and production are determined by the interaction of buyers and sellers in markets.

Question 11

If a country’s GDP increases from $$1,000$$ billion to $$1,050$$ billion in one year, what is the GDP growth rate?

Accepted Answer

$$\frac{1,050 - 1,000}{1,000} 	imes 100 = 5\%$$

Question 12

Which of the following is a macroeconomic issue?

Accepted Answer

The effect of inflation on the purchasing power of consumers nationwide.

Question 13

Which formula represents the opportunity cost of producing one more unit of a good?

Accepted Answer

$$Opportunity\ Cost = \frac{Loss\ in\ other\ goods}{Gain\ in\ chosen\ good}$$

Question 14

Which of the following best describes the role of private enterprises in a market economy?

Accepted Answer

They are groups of private individuals who own and operate businesses for profit.

Question 15

If a country exports $$300$$ units of goods and imports $$400$$ units, what is the value of net exports?

Accepted Answer

$$300 - 400 = -100$$

Question 16

Which of the following is an example of a transaction in an underground economy?

Accepted Answer

A business selling products without reporting the sale to tax authorities.

Question 17

Which of the following statements about specialization is correct?

Accepted Answer

Specialization allows workers to focus on tasks where they have a comparative advantage.

Question 18

In a circular flow diagram, which two groups interact in markets for goods and services?

Accepted Answer

Households and firms

Question 19

Which of the following best describes the difference between exports and imports?

Accepted Answer

Exports are goods and services produced domestically and sold abroad, while imports are goods and services produced abroad and sold domestically.

Fundamental Concepts in Microeconomics: Division of Labor, Markets, and Economic Systems

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