Bachelor of Social Science Economics Flashcards
7 cards from real BSocSc Bachelor of Social Science practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Bachelor of Social Science Economics flashcards as text
Which market structure is characterized by many sellers offering differentiated products with some pricing power?
Answer: Monopolistic competition
Monopolistic competition features many firms selling similar but differentiated products, giving each some control over price.
When the government imposes a price ceiling below the equilibrium price, the likely result is:
Answer: A shortage of the good
A binding price ceiling keeps price artificially low, causing quantity demanded to exceed quantity supplied, creating a shortage.
The concept of 'crowding out' in macroeconomics refers to:
Answer: Higher government spending reducing private investment via rising interest rates
Crowding out occurs when government borrowing raises interest rates, making private borrowing more expensive and reducing private investment.
A Lorenz curve that bows further away from the 45-degree line of equality indicates:
Answer: Higher income inequality
Greater deviation of the Lorenz curve from the perfect equality diagonal reflects a higher Gini coefficient and more unequal income distribution.
In game theory, a Nash equilibrium is a situation where:
Answer: No player can improve their outcome by unilaterally changing strategy
A Nash equilibrium occurs when each player's strategy is the best response to the strategies chosen by all other players.
Which of the following best describes the Keynesian view of aggregate demand during a recession?
Answer: Government spending can stimulate demand and reduce unemployment
Keynesians argue that during recessions, sluggish prices prevent self-correction, so fiscal stimulus through government spending is needed to boost aggregate demand.
The 'invisible hand' metaphor introduced by Adam Smith describes how:
Answer: Self-interested individuals in free markets unintentionally promote social welfare
Adam Smith argued that individuals pursuing their own self-interest in competitive markets inadvertently promote economic efficiency and social benefit.