Free Printable Business Economics

1.

Economics is the study of

a)

how society manages its unlimited resources.

b)

how to reduce our wants until we are satisfied.

c)

how to fully satisfy our unlimited wants.

d)

how to avoid having to make trade-offs.

2.

The condition of consumer equilibrium under cardinal approach in case of one commodity is

a)

price of commodity should be rising

b)

price of commodity should equal to be marginal utility

c)

price of commodity should be decreasing

d)

none of these

3.

At equilibrium under ordinal approach the MRS should be equal to

a)

MRTS

b)

Price Ratio

c)

Price

d)

Income

4.

The slope of indifference curve is equal to

a)

price ratio

b)

marginal opportunity cost

c)

marginal rate of substitution

d)

all of these

5.

---------------- shows various combinations of two products that give same amount of satisfaction:

a)

(a) ISO cost curve

b)

(b) Indifference curve

c)

(c) Marginal utility curve

d)

(d) ISO quant

6.

Total utility maximum when:

a)

(a) Marginal utility is maximum

b)

(b) Marginal utility is Zero

c)

(c) Average utility is maximum

d)

(d) Average utility is Zero

7.

An indifference curve is always:

a)

(a) Concave to the origin

b)

(b) Convex to the origin

c)

(c) L – shaped

d)

(d) A vertical straight line

8.

At equilibrium, the slope of the indifference curve is:

a)

(a) Equal to the slope of budget line

b)

(b) Greater than the slope of budget line

c)

(c) Smaller than the slope of budget line

d)

(d) None

9.

Marginal utility approach was given by:

a)

(a) J.R. Hicks

b)

(b) Alfred Marshall

c)

(c) Robbins

d)

(d) A.C. Pigou

10.

Indifference curves between income and leisure for an individual are generally:

a)

(a) Concave to the origin

b)

(b) Convex to the origin

c)

(c) Negatively sloped straight lines

d)

(d) Positively sloped straight lines

11.

Indifference curves never intersect each other due to:

a)

(a) Different levels of satisfaction

b)

(b) Same levels of satisfaction

c)

(c) Convex to origin

d)

(d) Concave to origin

12.

A budget constraints line is a result of:

a)

(a) Market price of commodity X

b)

(b) Market price of commodity Y

c)

(c) Income of the consumer

d)

(d) All of these

13.

The difference between what a consumer is ready to pay and what he actually pays is:

a)

(a) Consumer Surplus

b)

(b) Consumer deficit

c)

(c) Both

d)

(d) None

14.

Which economist said that money is the measuring rod of utility?

a)

(a) A.C Pigou

b)

(b) Marshall

c)

(c) Adam Smith

d)

(d) Robbins

15.

Marginal utility is a ------ Concept.

a)

(a) Cardinal

b)

(b) Ordinal

c)

(c) Both

d)

(d) None

16.

On which approach, indifference curve analysis is based?

a)

(a) Cardinal approach.

b)

(b) Ordinal approach.

c)

(c) Cardinal and ordinal both.

d)

(d) None of the above.

17.

Cardinal approach is related to:

a)

(a) Indifference curve

b)

(b) Equi-marginal utility

c)

(c) Law of diminishing returns

d)

(d) None of these

18.

When the TU is maximum then MU is?

a)

(a) Zero

b)

(b) Negative

c)

(c) Both

d)

(d) None.

19.

When marginal utility from the consumption of a commodity is zero, then the:

a)

(a) Total utility is zero

b)

(b) Total utility is highest

c)

(c) Total utility is rising

d)

(d) Total utility is falling.

20.

Total utility starts decreasing when --------------.

a)

(a) Marginal utility is positive

b)

(b) Marginal utility becomes negative

c)

(c) Marginal utility becomes zero

d)

(d) None of above.

21.

When two goods are perfect complementary, the indifference curve is:

a)

(a) A straight line

b)

(b) U shaped

c)

(c) L – shaped

d)

(d) Circular in shape.

Business Economics

Total questions: 21

Worksheet time: 16mins

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