Praxis Social Studies Domain 5: Economics Welcome to your Praxis Social Studies Domain 5: Economics 1. Praxis Social Studies: Economics What does the Lorenz Curve graphically represent in economics? A. The distribution of income or wealth among individuals in a society B. The relationship between unemployment rate and inflation C. The elasticity of demand for various goods D. The growth rate of GDP over time None 2. Praxis Social Studies: Economics What is the primary focus of the study of microeconomics? A. The behavior of individual markets and consumers B. The overall economy and macroeconomic indicators C. International trade and global markets D. Government fiscal and monetary policy None 3. Praxis Social Studies: Economics What does the term "oligopoly" refer to in economics? A. A market structure with only one buyer and many sellers B. A market dominated by a small number of large firms C. A market where all firms produce identical products D. A market with perfect information and no barriers to entry None 4. Praxis Social Studies: Economics In economics, what does "moral hazard" refer to? A. The cost incurred by making unethical decisions B. A situation where a party is more likely to take risks because they do not bear the full consequences of their actions C. The risk of a product becoming obsolete D. A scenario where consumers are misinformed about a product's quality None 5. Praxis Social Studies: Economics The concept of "creative destruction" in economics was popularized by which economist? A. Adam Smith B. John Maynard Keynes C. Joseph Schumpeter D. Milton Friedman None 6. Praxis Social Studies: Economics What is the primary implication of the Coase Theorem in environmental economics? A. Pollution can be controlled through government intervention B. Externalities can be resolved through private bargaining, provided property rights are well-defined C. Environmental regulations hinder economic growth D. The market is incapable of resolving environmental issues None 7. Praxis Social Studies: Economics What does the Phillips Curve in economics illustrate? A. The relationship between inflation and unemployment B. The trade-off between equity and efficiency C. The impact of fiscal policy on economic growth D. The correlation between interest rates and investment None 8. Praxis Social Studies: Economics In economics, what is the primary characteristic of a "public good"? A. It is provided exclusively by the government B. It is non-excludable and non-rivalrous in consumption C. It is always free of charge D. Its supply is limited by the government None 9. Praxis Social Studies: Economics The concept of "diminishing marginal utility" in economics suggests that: A. Utility decreases as more units of a good are consumed B. Utility increases at a decreasing rate as consumption increases C. Total utility decreases as consumption increases D. Marginal utility is unrelated to the quantity consumed None 10. Praxis Social Studies: Economics What is the main focus of Keynesian economics? A. The role of government intervention in the economy B. The importance of supply-side factors in economic growth C. The efficiency of free markets in allocating resources D. The impact of individual consumer choices on market outcomes None 11. Praxis Social Studies: Economics "Pareto Efficiency" in the context of welfare economics refers to a situation where: A. Every individual in the society has equal income B. One individual cannot be made better off without making someone else worse off C. The total utility in the society is maximized D. The government redistributes income to achieve social welfare None 12. Praxis Social Studies: Economics In the context of international trade, what does the term "comparative advantage" refer to? A. The ability of a country to produce a good at a lower opportunity cost than another country B. The ability of a country to produce a good with less labor compared to another country C. The exclusive production of a good by a single country D. The ability of a country to produce a good at a lower monetary cost than another country None 13. Praxis Social Studies: Economics Which economic concept is illustrated by the Laffer Curve? A. The relationship between government revenue raised by taxation and the rate of taxation B. The impact of inflation on government spending C. The correlation between unemployment and fiscal policy D. The effect of interest rates on public debt None 14. Praxis Social Studies: Economics What is "menu cost" in economics? A. The cost of changing prices in a menu due to inflation B. The expense incurred by restaurants to update their menus C. The cost associated with changing prices on products and services D. The fixed cost of producing a menu for a service provider None 15. Praxis Social Studies: Economics The term "deadweight loss" is used to describe which phenomenon in economics? A. The loss of productivity due to unemployment B. The inefficiency caused by market distortions, typically due to taxes or subsidies C. The cost of goods unsold in the market D. The loss of potential gain from resources not being used for their best alternative use None 16. Praxis Social Studies: Economics What is the primary economic function of the stock market? A. To facilitate the redistribution of wealth B. To provide a means for government funding C. To allocate capital efficiently among various sectors of the economy D. To ensure price stability in the market None 17. Praxis Social Studies: Economics The concept of "time preference" in economics refers to: A. The preference for consuming goods and services in the present rather than in the future B. The duration a product remains in the market before becoming obsolete C. The time it takes for an investment to reach its break-even point D. The change in demand for goods over different periods None 18. Praxis Social Studies: Economics The "tragedy of the commons" is a concept that explains: A. The overuse of a public good leading to its depletion B. The failure of a market to provide a specific good due to its non-excludable nature C. The loss of individual incentives in collective actions D. The impact of public policies on private investments None 19. Praxis Social Studies: Economics What does the term "velocity of money" refer to in economics? A. The rate at which money changes hands in an economy B. The speed at which the central bank prints money C. The rate of inflation in an economy D. The turnover rate of investments in the stock market None 20. Praxis Social Studies: Economics In economics, "rent seeking" refers to: A. The process of finding tenants for rental properties B. The act of earning income through competitive market activity C. The attempt to obtain financial gains through manipulation or exploitation of the political environment D. The practice of setting rental prices for commercial properties None 21. Praxis Social Studies: Economics The "endowment effect" in behavioral economics is the tendency: A. For people to undervalue things they own compared to things they do not own B. To place a higher value on an object merely because they own it C. For individuals to invest more in assets they are familiar with D. For investors to hold onto stocks that have lost value None 22. Praxis Social Studies: Economics What is the primary purpose of imposing a Pigovian tax? A. To generate revenue for the government B. To discourage the consumption of luxury goods C. To correct market outcomes in the presence of externalities D. To subsidize the production of public goods None 23. Praxis Social Studies: Economics The term "stagflation" is used to describe a situation in an economy where: A. There is rapid economic growth and low inflation B. Inflation is high, economic growth rate slows, and unemployment remains steadily high C. There is deflation accompanied by high unemployment D. Economic growth and inflation both remain at a steady state None 24. Praxis Social Studies: Economics In the Solow Growth Model, what does the "steady state" refer to? A. The point at which a country's growth rate starts declining B. A condition where all economic variables grow at the same rate C. A situation in which capital per worker and output per worker grow at a constant rate D. The stage where capital accumulation is in balance with depreciation and labor growth None 25. Praxis Social Studies: Economics The concept of "asymmetric information" in market transactions primarily refers to: A. The situation where some market participants have different or better information than others B. The lack of transparency in financial markets C. The inequality in income distribution D. The difference in technology used by firms in a market None 26. Praxis Social Studies: Economics What does the "Herfindahl-Hirschman Index" measure in the context of market structures? A. The degree of monopolistic competition B. The level of market concentration and competition C. The efficiency of resource allocation D. The impact of government regulations on industries None 27. Praxis Social Studies: Economics In the context of international economics, "hot money" refers to: A. Money invested in high-risk ventures B. Funds that flow into a country to take advantage of favorable interest rates C. Illegally earned money transferred across borders D. Capital invested in developing countries for quick profits None 28. Praxis Social Studies: Economics The Kuznets Curve hypothesizes what relationship in an economy? A. Between economic growth and income inequality B. Between inflation and unemployment C. Between technological advancement and labor demand D. Between government spending and GDP growth None 29. Praxis Social Studies: Economics In economics, what is the primary characteristic of a "Giffen Good"? A. A luxury good for which demand increases as the price increases B. A good for which demand increases as income decreases C. A basic good for which demand increases when the price rises due to the income effect outweighing the substitution effect D. A product that has no close substitutes None 30. Praxis Social Studies: Economics The concept of "Ricardian Equivalence" in fiscal policy suggests that: A. Government borrowing has the same effect on the economy as taxation B. Tax cuts always lead to economic growth C. Government spending is always more efficient than private spending D. High taxes discourage investment and savings None 1 out of 30 Time is Up! Time's up
