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ECO| NATURE AND SCOPE OF BUSINESS ECONOMICS

Total questions: 100

Worksheet time: 3hrs 30mins

Name
Class
Date
1.

Economics is a science because it __________

a)

uses biological methods to study human behaviour

b)

uses scientific methods to study human behaviour

c)

uses research approach to study human behaviour

d)

uses experimental pedagogy to study human behaviour

2.

Which of the following is not within the scope of economics

a)

Resource allocation

b)

Scarcity

c)

Building a successful business

d)

What production should take place

3.

What is the fundamental economic problem faced by all countries?

a)

Inflation

b)

Unemployment

c)

Scarcity

d)

Economic recession

4.

Which of the following is a normative statement?

a)

Planned economies allocate resources via government departments

b)

Most transitional economies have experienced problems of falling output and rising prices over the past decade.

c)

There is a greater degree of consumer sovereignty in market economies than planned economies.

d)

Reducing inequality should be a major priority for mixed economies

5.

A study of how increases in the corporate income tax rate will affect the national unemployment rate is an example of

a)

Macro-Economics.

b)

The provision of services

c)

Micro-economics

d)

Normative economics

6.

Which of the following is not a fundamental economic question?

a)

For whom production should take place?

b)

What production should take place?

c)

Why production should take place?

d)

How production should take place?

7.

Microeconomics is concerned with...

a)

The operation of the economy as a whole

b)

How prices are determined in individual markets

c)

Adjusting taxes and interest rates to manage the economy

d)

The distribution of income and wealth in an economy

8.

The gap between limited resources and unlimited wants is known as ______________.

a)

Demand

b)

Scarcity

c)

Supply

d)

Surplus

9.

All of the following are examples of macro-economic principles except:

a)

National Income

b)

Inflation

c)

Unemployment

d)

Price

10.

The study of the economy with a large scope. Looking at regional, national and global units.

a)

Macro-Economics

b)

Micro-Economics

c)

Economics

d)

Supply and Demand

11.

A _______________ is a market situation where there is only one producer who controls the supply of a good or service.

a)

Oligopoly

b)

Monopoly

c)

GDP

d)

Competition

12.

The term Economics is derived from a

a)

Latin Word

b)

Greek Word

c)

Russian Word

d)

Indian Word

13.

There are many definitions of Economics, but for modern economists, it is:

a)

an inquiry into the nature and causes of the wealth of nations

b)

a social science

c)

the study of how man allocates scarce resources, which have alternative uses, to achieve given goals

d)

a practical science of the production and distribution of wealth

14.

In a mixed economy

a)

all economic decisions are taken by the central authority.

b)

all economic decisions are taken by private entrepreneurs.

c)

economic decisions are partly taken by the state and partly by the private entrepreneurs.

d)

none of the above

15.

"Economics is an inquiry into the nature and causes of wealth of nations" was defined by______

a)

Alfred Marshal

b)

H.J. Davenport

c)

Adam Smith

d)

John Stuart Mill

16.

Economics is the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses. This was defined by_______

a)

Mr. Adekola

b)

John Stuart Mill

c)

Alfred Marshal

d)

None of the above

17.

True/False: Human wants will always exceed available resources.

a)

TRUE

b)

FALSE

18.

When "wants are greater than the resources available to satisfy them," it is called...

a)

Scarcity

b)

Needs

c)

Opportunity Cost

d)

None of these answers

19.

Because of scarcity, people are forced to make _________ about how to use resources.

a)

Choices

b)

Opportunities

c)

Houses

d)

Desires

20.

Capital intensive technique would get chosen in a

a)

labour surplus economy where the relative price of capital is lower.

b)

capital surplus economy where the relative price of capital is lower.

c)

developed economy where technology is better.

d)

developing economy where technology is poor

21.

Which of the following is not one of the four central questions that the study of economics is supposed to answer?

a)

Who produces what?

b)

When are goods produced?

c)

Who consumes what?

d)

How are goods produced?

22.

Freedom of choice is the advantage of

a)

Socialism

b)

Capitalism

c)

Communism

d)

None of the above

23.

Economics is derived from two Greek words "eco" & "nomos," meaning __________ & ___________ respectively

a)

society & transaction

b)

home & transaction

c)

home & accounts

d)

society & accounts

24.

Administered prices refer to:

a)

Prices determined by forces of demand and supply

b)

Prices determined by sellers in the market

c)

Prices determined by an external authority which is usually the government

d)

None of the above

25.

Which of the following is not within the scope of Business Economics?

a)

Capital Budgeting

b)

Risk Analysis

c)

Business Cycles

d)

Accounting Standards

26.

The occupation in which people work for others and get remunerated in return is known as

a)

Business

b)

Employement

c)

Profession

d)

None of them

27.

Which of the following is a non- economic activity?

a)

A Chef cooking food for Restaurant.

b)

A person selling cold water on the pavement.

c)

A factory owner producing school bags for sale in the market.

d)

An old man offering prayers in a temple

28.

The reward a businessman gets for bearing the risks is called

a)

Remuneration

b)

Commission

c)

Bonus

d)

Profit

29.

The economic activity in which specialized knowledge is required

a)

Business

b)

Profession

c)

Employement

d)

None of them

30.

Capital is not an essential element in :

a)

(a) Employment

b)

(b) Profession

c)

(c) Business

d)

(d) None of these

31.

Economic activity = ……….. + ………. :

a)

(a) Business + Profession

b)

(b) Profession + Employment

c)

(c) Business + Employment

d)

(d) Business + Profession + Employment

32.

Human activities directed towards acquisition of wealth are called economic activities.

a)

TRUE

b)

FALSE

c)

CANNOT SAY

33.

Doctors treats her mother is a economic activity.

a)

TRUE

b)

FALSE

c)

CANNOT SAY

34.

Teacher teaches in a school is _____________ Economic activity.

a)

BUSINESS

b)

PROFESSION

c)

EMPLOYMENT

d)

NONE OF THE ABOVE

35.

In a free market economy the allocation of resources is determined by

a)

voting done by consumers

b)

a central planning authority.

c)

consumer preferences.

d)

the level of profits of firms.

36.

Profit earning is basic feature of

a)

Business

b)

Profession

c)

Employment

d)

None

37.

What could happen if the air is dirty?

a)
b)
c)
d)

All of the above

38.

Which of the following does not characterise business activity?

a)

Production of goods

b)

Presence of risk

c)

Sale or exchange

d)

Salary or wages

39.

Scarcity definition of Economics is given by-

a)

Alfred Marshall

b)

Samuelson

c)

Robinson

d)

Adam Smith

40.

Dr Mohan Kumar is working against the post of a senior doctor in a government hospital. He does not discriminate between the rich and poor while treating his patients medically. When he returns home from the hospital, he attends to the poor patients at home free of cost between 6:00 p.m. to 8:00 p.m. Besides, he gives them the information about the employment opportunities.

1. What type of activities does Dr Mohan Kumar perform at home?

a)

Economic

b)

Non-Economic

c)

Profession

d)

Business

41.

The benefit of economic study is –

a)

It ensure that all problems will be appropriately tackled

b)

It helps in identifying problems

c)

It enable to examine a problem in its right perspective

d)

It gives exact solutions to every problem

42.

Name the occupation in which people work for others and get remunerated in return

a)

Business

b)

Profession

c)

Employment

d)

None of the above

43.

Which of the following statements is correct?

a)

Micro economics is important for study of a particular household and a particular firm

b)

Macro economics is important for study of economic conditions of a country

c)

Both a and b

d)

None of the above

44.

Central problem of an economy arise, because:

a)

Many goods are sold in market

b)

Government makes decisions

c)

Shortage of labour

d)

Multiplicity of wants and Scarcity of resources.

45.

The central problem of an economy is

a)

Assigning limited resources in a way that unlimited desires and needs of the society are satisfied.

b)

Ensuring a minimum income for each citizen.

c)

Assuring that production happens in the most effective way.

d)

Analyzing the demand with market economies.

46.

Mr. Manish hired a business consultant to guide him for growth of his business. The consultant visited his factory and suggested some changes with respect to staff appointment, loan availability and so on. Which approach is that consultant using?

a)

Micro economics

b)

Macro economics

c)

Both a and b

d)

None of the above

47.

The managerial economics –

a)

Is Applied Economics that fills the gap between economic theory and business practice

b)

Is just a theory concept

c)

Trains managers how to behave in recession

d)

Provides the tools which explain various concepts

48.

In Economics, the central economic problem means:

a)

Output is restricted to the limited availability of resources

b)

Consumer do not have as much money as they would wish

c)

There will always be certain level of unemployment

d)

Resources are not always allocated in an optimum way

49.

Economic problem arises due to:

a)

(a) limited wants

b)

(b) scarce means

c)

(c) alternative uses

d)

both (b) and (c)

50.

Which of the following is related to the problem ‘how to produce’?

a)

Factoral distribution of income

b)

the choice of technique

c)

The choice of product

d)

None of these

51.

Central problem of an economy arise, because:

a)

Many goods are sold in market

b)

Government makes decisions

c)

Shortage of labour

d)

Multiplicity of wants and Scarcity of resources.

52.
Why does scarcity exist?
a)
Each year workers tend to produce less than previously 
b)
Machines wear out in time
c)
There are not sufficient resources to meet everyone's wants
d)
There is a limit to people's wants 
53.
Why will scarcity continue to be a problem in the future?
a)
Prices will rise
b)
Resources will always be finite 
c)
Needs will decrease in the future 
d)
World population will fall 
54.
What factor of production's function is to make decisions and take risks?
a)
Capital
b)
Enterprise 
c)
Land 
d)
Labour 
55.
What is meant by 'labour' in economics?
a)
Hard physical work used to produce manufactured goods 
b)
Human mental and physical effort used for producing goods and services
c)
Natural resources used in the productive process
d)
Risk taking and organising the factors of production
56.
Why does scarcity exist?
a)
Each year workers tend to produce less than previously 
b)
Machines wear out in time
c)
There are not sufficient resources to meet everyone's wants
d)
There is a limit to people's wants 
57.
What type of factor of production is a road?
a)

Capital

b)

Enterprise

c)

Labour

d)

Land 

58.

Exploitation and inequality are minimal under:

a)

Socialism

b)

Capitalism

c)

Mixed economy

d)

None of the above

59.
Which factor of production is the least mobile?
a)
Capital 
b)
Enterprise
c)
Labour
d)
Land 
60.

Which of the following is a free good?

a)

A vaccination provided by the state without charge

b)

Prizes of food items given away by a supermarket

c)

Recycled paper

d)

Wind coming from the sea

61.

What causes economic problems?

a)

Unlimited Wants

b)

Alternative Uses

c)

Limited or Scare means

d)

All of the above

62.

Market Economy is on the basis of

a)

Social consideration

b)

Supply and Demand forces in the market

c)

both A and B

d)

Other

63.

Central Planned Economy is on the basis of

a)

Maximizing social welfare

b)

Supply and Demand forces in the market

c)

Both A and B

d)

Other

64.

Under the Inductive method, the logic proceeds from :

a)

Under the Inductive method, the logic proceeds from :

b)

Particular to general

c)

Both (a) and (b)

d)

None

65.

Who defines Economics in terms of Dynamic Growth and Development?

a)

Robbins

b)

Paul A Samuelson

c)

Adam Smith

d)

None

66.

Economic problems arises due to

a)

Limited wants

b)

Scare means

c)

Alternative uses

d)

Both B and C

67.

Which of the following is NOT a determinant of demand for diesel?

a)

The price of petrol

b)

The price of diesel

c)

The price of automobile

d)

Consumer’s income

68.

Normative aspect of Economics is given by :

a)

Marshall

b)

Robbins

c)

Adam Smith

d)

Samuelson

69.

Which one in the following is not correct :

a)

There are limited wants

b)

Means are scarce

c)

Resources have alternative uses

d)

Economics is science

70.

Which of these is a part of microeconomics?

a)

Factor pricing

b)

National Income

c)

Balance of payment

d)

None

71.

Which of the following statements is incorrect?

a)

Alfred Marshall propagated the wealth definition of Economics

b)

L. Robbins introduced the "Scarcity" definition of Economics

c)

Samuelson emphasized upon the "growth" aspect of Economics

d)

A.C Pigou believed in the "welfare" aspect of Economics

72.

_______ is also called as command economy

a)

Socialist

b)

Capitalist

c)

Mixed economy

d)

None of the above

73.

Normative Economics is based on:

a)

Ethical Considerations

b)

Facts and Generalisation

c)

What is?

d)

All of the above

74.

A Capitalist Economy follows the policy of:

a)

Laissez- faire

b)

Regulated markets

c)

Promoting public sector

d)

None of the above

75.

Deductive and Inductive methods are complementary to each other. It is:

a)

Absolutely correct

b)

Absolutely incorrect

c)

Partially incorrect

d)

None of the above

76.
Medicine is a _______________.
a)

Necessity

b)

Luxory

c)

Utility

d)

All of the above

77.

A system of economy in which all the means of production are owned and controlled by the private individuals for the purpose of profit is called:

a)

Socialist Economy

b)

Capitalist Economy

c)

Mixed Economy

d)

All of the above

78.

In which among the following systems the ‘right to property’ exists

a)

Mixed economy

b)

Capitalist economy

c)

Socialist economy

d)

Traditional economy

79.

Who has defined economics as “Science which deals with wealth”?

a)

Adam Smith

b)

Canon

c)

J.B. Say

d)

A.C. Pigou

80.

The most important function of an entrepreneur is to _____.

a)

innovate

b)

bear the sense of responsibility

c)

finance

d)

earn profit

81.

All wants of an individual are not of:

a)

Equal importance

b)

Immediate importance

c)

Fixed importance

d)

All of the above

82.

Find out the correct statement

a)

Higher the prices, lower the quality demanded of a product is a normative statement

b)

Micro and macro-economics are interdependent

c)

In a capitalist economy, the economic problems are solved by planning commission

d)

In deductive method logic proceeds from particular to the general

83.

Socialist Economy was propounded by:

a)

Karl Marx

b)

Samuelson

c)

A.C. Pigou

d)

Adam Smith

84.

Under inductive method logic proceeds from:

a)

General to particular

b)

Positive to narrative

c)

Normative to positive

d)

Particular to general

85.

Price Mechanism is the main feature of which economy?

a)

Capitalistic Economy

b)

Mixed Economy

c)

Socialist Economy

d)

All of the above

86.

Applied economics includes

a)

Regression analysis and mathematical linear programming

b)

Capital budgeting

c)

Both (a) and (b)

d)

None

87.

Due to recession, employment rate _____ and output rate _____.

a)

Rises ; rises

b)

Falls ; falls

c)

Rises ; falls

d)

Falls ; rises

88.

Economic goods are considered as scarce resources because_____

a)

Inadequate quantity to satisfy the needs of the society

b)

Not possible to increase the quantity

c)

Limited hands to make goods

d)

Primary importance in satisfying social requirements

89.

___________refers to the work area where surplus manpower is employed out of which some individuals have zero or almost zero marginal productivity, such that if they are removed the total level of output remains unchanged.

a)

Voluntary

b)

Disguised

c)

Structural

d)

Technological

90.

A study of have increase in the corporate tax rate will affect national unemployment rate is

a)

Marcoeconomics

b)

Descriptive economics

c)

Microeconomics

d)

Normative economics

91.

In a market economy all assets are held by:

a)

Investors

b)

Privately

c)

Government

d)

Jointly by government

92.

The branch of economic theory that deals with problem of allocating resources.

a)

Microeconomics

b)

Marcoeconomics

c)

Econometrics

d)

None

93.

Larger production of goods would lead to higher production in future.

a)

consumer goods

b)

capital goods

c)

agricultural goods

d)

public goods

94.

Which is the first book of Economics named as ______

a)

The Wealth of Nations

b)

Economics

c)

Nations of Wealth

d)

Political Economy

95.

The willingness and ability of a producer to make a product is referred to as

a)

quantity supplied

b)

quantity demanded

c)

supply

d)

demand

96.

Which type of scarcity is referred to in economics

a)

Relative scarcity

b)

Absolute scarcity

c)

Both (a) and (b)

d)

None

97.

Consumer sovereignty is which of the following characteristics?

a)

Capitalist economy

b)

Mixed economy

c)

Socialist economy

d)

Democracy

98.

‘Economics is the study of mankind in the ordinary business of life’ was given by:

a)

Adam Smith

b)

Lord Robbins

c)

Alfred Marshall

d)

Samuelson

99.

Capitalistic Economy uses _____ as principal means of allocating resources.

a)

demand

b)

supply

c)

price

d)

all of the above

100.

Which of the following falls under microeconomics?

a)

National income

b)

General price level

c)

Factor pricing

d)

National saving and investment

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