Economics and Finance Quiz

Which of the following statements best describes economies of scale?

• Economies of scale occur when the average cost per unit decreases as production volume increases.

• Economies of scale occur when the average cost per unit remains constant regardless of production volume.

• Economies of scale occur when the average cost per unit increases as production volume increases.

• Economies of scale occur only in monopolistic market structures.

What is the primary purpose of a SWOT analysis?

• To identify strengths and weaknesses of competitors in the market.

• To analyze the internal and external factors affecting a business.

• To develop marketing strategies based on consumer preferences.

• To forecast future financial performance of a company.

Which financial ratio measures a company's ability to meet its short-term obligations with its most liquid assets?

• Current ratio

• Debt-to-equity ratio

• Return on investment (ROI)

• Price-to-earnings (P/E) ratio

What does the term "opportunity cost" refer to in economics?

• The actual cost incurred in pursuing an opportunity.

• The cost of an opportunity forgone in favor of the chosen alternative.

• The profit gained from seizing an opportunity.

• The monetary value of an opportunity.

In strategic management, what does the VRIO framework assess?

• External market conditions affecting the business.

• Internal resources and capabilities of a firm.

• The level of competition within the industry.

• Market share and growth potential of a company.

Calculate the current ratio for a company with current assets of $50,000 and current liabilities of $30,000.

Determine the net profit margin for a company with a net income of $25,000 and total revenue of $150,000.

Calculate the inventory turnover ratio for a business that has an average inventory of $40,000 and cost of goods sold (COGS) of $200,000.

Find the return on equity (ROE) for a company with a net income of $50,000, total equity of $400,000, and preferred dividends of $10,000.

Calculate the depreciation expense using the straight-line method for an asset with a cost of $20,000, a salvage value of $2,000, and a useful life of 5 years.