Grade 9 – Economics
Diagnostic Examination
Name:_____________________________________Date:___________________
_____
Grade&Section:________________________Teacher:_____________________
Instructions: Choose the correct answer for each question. Each question is
worth 1 point.
1. What is the primary focus of economics as a social science?
a) The study of past events
b) The management of natural resources
c) The study of how societies allocate scarce resources
d) The development of new technologies
2. Which term describes the value of the next best alternative that is foregone
when a decision is made?
a) Opportunity cost
b) Marginal cost
c) Total cost
d) Fixed cost
3. Which of the following best defines "Supply" in economic terms?
a) The quantity of a good that consumers are willing to buy at a given price
b) The quantity of a good that producers are willing to sell at a given price
c) The total amount of money available in an economy
d) The total demand for goods and services in an economy
4. The law of demand states that, all else being equal, an increase in the price
of a good will result in:
a) An increase in demand
b) A decrease in demand
c) No change in demand
d) An increase in supply
5. Which economic system is characterized by private ownership of resources
and minimal government intervention?
a) Command economy
b) Market economy
c) Mixed economy
d) Traditional economy
6. Gross Domestic Product (GDP) measures:
a) The total wealth of a country
b) The total value of goods and services produced within a country in a given
period
c) The amount of foreign aid received by a country
d) The income of the average citizen
7. Which of the following is NOT considered a factor of production?
a) Land
b) Labor
c) Capital
d) Money
8. What is inflation?
a) A decrease in the general price level of goods and services
b) An increase in the general price level of goods and services
c) A rise in unemployment rates
d) A decrease in the value of a currency
9. What is a "Market Equilibrium"?
a) A situation where supply exceeds demand
b) A situation where demand exceeds supply
c) A situation where the quantity supplied equals the quantity demanded
d) A situation where there is no trade in the market
10. Which of the following is an example of a public good?
a) A smartphone
b) A television
c) National defense
d) A luxury car
11. Which term refers to the additional benefit gained from consuming one
more unit of a good or service?
a) Marginal utility
b) Total utility
c) Average cost
d) Fixed cost
12. What is the primary role of banks in an economy?
a) To create new laws
b) To manage government budgets
c) To facilitate transactions and provide loans
d) To control inflation rates
13. Which term describes a market situation where only a few firms dominate
the industry?
a) Perfect competition
b) Monopolistic competition
c) Oligopoly
d) Monopoly
14. What is "Monetary Policy"?
a) Government policies related to taxation
b) Policies aimed at controlling the money supply and interest rates
c) Regulations on trade and tariffs
d) Strategies for public health management
15. Which of the following is a common measure used to assess economic
development?
a) Gross National Income (GNI)
b) Population density
c) Inflation rate
d) Interest rates
16. Which economic principle suggests that as more of a good or service is
consumed, the additional satisfaction gained from each extra unit decreases?
a) Law of Demand
b) Law of Diminishing Marginal Utility
c) Law of Supply
d) Principle of Comparative Advantage
17. What does "GDP per capital" measure?
a) The total GDP of a country
b) The GDP of a country divided by its population
c) The total wealth held by the richest individuals in a country
d) The average income of the top 10% of earners
18. Which term refers to the economic situation where a country exports more
than it imports?
a) Trade deficit
b) Trade surplus
c) Balance of payments
d) Budget deficit
19. What is "Fiscal Policy"?
a) Policies related to the supply of money in an economy
b) Government decisions about taxation and spending
c) Strategies for international trade
d) Regulations concerning labor markets
20. Which type of unemployment is caused by a downturn in the business
cycle?
a) Frictional unemployment
b) Structural unemployment
c) Cyclical unemployment
d) Seasonal unemployment
21. What is the main purpose of taxation in an economy?
a) To control inflation
b) To fund government services and infrastructure
c) To regulate international trade
d) To manage interest rates
22. Which of the following best describes "Demand-Pull Inflation"?
a) Inflation caused by a decrease in production costs
b) Inflation caused by an increase in consumer demand
c) Inflation caused by an increase in the supply of money
d) Inflation caused by higher taxes
23. Which of the following is an example of a market failure?
a) Efficient resource allocation
b) Perfect competition
c) Externalities such as pollution
d) Balanced government budgets
24. The concept of "Comparative Advantage" explains why:
a) Countries should produce only goods they can produce most efficiently
b) Nations engage in international trade despite having the same resource
endowments
c) Countries should avoid international trade
d) Economies should focus solely on self-sufficiency
25. What does the term "Liquidity" refer to in financial terms?
a) The ability to convert assets into cash quickly without significant loss in value
b) The amount of physical cash held by a financial institution
c) The total value of investments held by an individual
d) The stability of a country's currency
26. Which economic indicator is used to measure the average price level of a
basket of goods and services consumed by households?
a) Producer Price Index (PPI)
b) Consumer Price Index (CPI)
c) Gross Domestic Product (GDP)
d) Balance of Trade
27. Which term describes the process of allocating resources to their most
valued uses in an economy?
a) Economic efficiency
b) Market equilibrium
c) Fiscal policy
d) Monetary policy
28. What is "Structural Unemployment"?
a) Unemployment due to economic downturns
b) Unemployment resulting from changes in the economy that alter the structure
of job opportunities
c) Unemployment caused by temporary changes in demand for labor
d) Unemployment due to seasonal fluctuations in demand
29. Which type of economic system combines elements of both market and
command economies?
a) Pure market economy
b) Pure command economy
c) Mixed economy
d) Traditional economy
30. The concept of "elasticity" in economics refers to:
a) The measure of how quantity demanded or supplied changes in response to
price changes
b) The ability of an economy to recover from a recession
c) The total value of goods produced in an economy
d) The extent to which government policies impact economic growth
