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business economics sem 1

Total questions: 71

Worksheet time: 39mins

Name
Class
Date
1.

Opportunity cost can be defined as...

a)

Having fewer resources than needed to fill human wants and needs

b)

A time or set of circumstances that makes it possible to do something

c)

Anxiety that an exciting or interesting event may currently be happening elsewhere, often aroused by posts seen on social media

d)

The loss of other alternatives when one alternative is chosen

2.

Demand Function explain relationship between demand for Commodity and its___________.

a)

Determinants

b)

Elasticity

c)

Only Price

d)

Elements

3.

Market situation where there is single seller. There is no close substitute and no free entry and exist. is refer as

a)

Perfect Competition

b)

Monopoly

c)

Oligopoly

d)

Monopolistic Competition

4.

When the quantity demanded remains the same whatever be the change then Price elasticity is

a)

Perfectly Elastic

b)

Perfectly Inelastic

c)

Relatively Elastic

d)

Relatively Inelastic

5.

If two goods are complementary to each other, cross elasticity demand is said to be "-------------"

a)

Positive

b)

Neutral

c)

Negative

d)

Unitary

6.

Demand Forecasting is also known as ________Forecasting

a)

Sales

b)

Production

c)

Quantity

7.

Expert Opinion method is also known as

a)

Delphi Method

b)

Marshall Method

c)

Tausing Method

8.
The slope  of indifference curve is equal to
a)
price ratio
b)
marginal opportunity cost
c)
marginal rate of substitution 
d)
all of these
9.
In this type of economy, the people decide the supply, demand, and price.  
a)
Market 
b)
Traditional
c)
Command 
d)
Mixed
10.

Which 3 is the basic Economic questions

a)

How should we produce it?

b)

Why should we produce?

c)

What should we produce?

d)

For whom should we produce it?

11.

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.

12.

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

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.

The term "derived demand" means...

a)

demand for secondary products only

b)

demand that is dependent on government supplying the product

c)

demand that arises because the supply of the good is reduced

d)

demand that arises because there is demand for another good.

15.

A market dominated by a few large firms is called:

a)

Oligopoly

b)

Labour Market

c)

Monopoly

d)

Government intervention

16.

Want satisfying power of a commodity is ________________.

a)

Value

b)

Utility

c)

Human wants

d)

Goods

17.
in increasing returns to factor total production 
a)
increases
b)
increases with diminishing rate
c)
decreases
d)
increases with increasing rate
18.
if demand is perfectly elastic than demand curve would be
a)
horizontal 
b)
vertical
c)
rectangular hyperbola
d)
none of these
19.

The relation that the law of demand defines is.

a)

Income and price of a commodity

b)

Price and quantity of a commodity

c)

Income and quantity demanded

d)

Quantity demanded and quantity supplied

20.
Market demand curves are obtained by
a)
determining the price each consumer is willing to pay for the good & summing those prices across all consumers
b)
observing the prices and quantities sold in a market over time and plotting those price-quantity combinations in a graph
c)
summing the quantities every consumer is willing to buy at each different price
d)
observing the behavior of an individual consumer in a market
21.

the different amounts of a product that a seller would make available for sale at different prices

a)

Demand Schedule

b)

Demand

c)

Supply Schedule

d)

Supply

22.

a list of the amounts of a product that a buyer would purchase at different prices

a)

Demand Schedule

b)

Demand

c)

Supply Schedule

d)

Supply

23.

a line on a graph that illustrates a downward slope because of the inverse relationship between price and quantity

a)

Demand Schedule

b)

Demand Curve

c)

Supply Schedule

d)

Supply Curve

24.

the different amounts of a product that a buyer would purchase at different prices

a)

Demand Schedule

b)

Demand

c)

Supply Schedule

d)

Supply

25.

What is the definition of forecasting?

a)

A planning tool that helps management in its attempts to cope with the uncertainty of the future, relying mainly on data from the past and present and analysis of trends.

b)

The organization and coordination of the activities of a business in order to achieve defined objectives.

c)

The process of obtaining and managing of products or services needed to operate a business or other type of organization.

d)

A claim for a sum of money as due, necessary, or required.

26.

If the demand for a good increases when people's incomes increase,

a)

the good is an inferior good

b)

the law of demand is violated

c)

the good's demand curve shifts to the left

d)

the good is a normal good

27.

According to the law of diminishing returns:

a)

the total product of an input will eventually be negative.

b)

the marginal product of an input will eventually be negative.

c)

the marginal product of an input will eventually decline.

d)

the total product of an input will eventually decline.

e)

none of the above

28.

Which of the following is NOT a factor of production?

a)

Technology

b)

Information technology

c)

land

d)

Interest

29.

The law of variable proportions is said to exist when

a)

there are only two variable factors

b)

there is a fixed factor and a variable factor

c)

all factors are variable

30.

When MP is zero

a)

TP is maixmum

b)

TP starts falling

c)

AP becomes negative

d)

TP is zero

31.

Law of variable proportion is the new name of the famous

a)

Production Function

b)

Law of Diminishing Returns

c)

Law of Demand

d)

Returns to Scale

32.

_____________ is a function of inputs.

a)

Raw Materials

b)

Output

c)

Production Function

d)

Labour

33.

________ an addition to the total production by the employment of an extra unit of a factor.

a)

Average Product

b)

Total Product

c)

Marginal Product

d)

Output

34.

what is the behaviour of TP, when MP becomes negative?

a)

TP increases at an increasing rate

b)

TP increases at diminishing rate

c)

TP is at its maximum point

d)

TP decreases

35.

At the point of inflexion the marginal product is at its

a)

maximum

b)

Zero

c)

Negative

d)

is equal to total product

36.

Which of the following is not a phase in the law of variable proportions

a)

Increasing returns

b)

Constant returns

c)

Diminishing returns

d)

Negative returns

37.

a production function:

a)

Gives the minimum level of output that can be produced from a combination of inputs

b)

Gives the different levels of output that can be produced from a combination of inputs

c)

Gives the maximum level of output that can be produced from a combination of inputs

d)

All of the above

38.

A time period when at least one factor of production is held constant is called

a)

Market period

b)

Very short period

c)

Short run

d)

Long run

39.

A production function assumes a given:

a)

technology.

b)

set of input prices.

c)

ratio of input prices.

d)

amount of capital and labor.

e)

amount of output.

40.

Tools, machines, etc. are included in-

a)

fixed capital

b)

circulating factor

c)

sunk factor

d)

human capital

41.

The term production in economics means-

a)

creation of economic utilities

b)

rendering of a service only

c)

creation of a physical product only

d)

none of the above

42.

A short run production function is one in which-

a)

at least one factor is fixed

b)

at least one factor is variable

c)

all factors are fixed

d)

all factors are variable

43.

When the amount of a factor increases the total output

a)

Decreases

b)

is maximum

c)

Increases

d)

becomes zero

44.

Which stage represents the range of rational production decision?

a)

Stage III

b)

Stage I

c)

Stage II

45.
Total Costs / Quantity = _____
a)
Marginal Cost
b)
Average Total Cost
c)
Implicit Cost
d)
Explicit Cost
46.
Variable Cost/Quantity = _______
a)
Marginal Variable Cost
b)
Average Fixed Cost
c)
Average Variable Cost
d)
Marginal Total Cost
47.
Change in Total Revenue/Change in Quantity
ΔTR/ΔQ = _____
a)
Marginal cost
b)
Marginal Revenue
c)
Profit
d)
Marginal Profit
48.
 Total Revenue - Total Cost = _____
a)
Profit
b)
Revenue
c)
Marginal Revenue
d)
Variable Revenue
49.
Costs that do not change when the quanity of output produced changes?
a)
Fixed Costs
b)
Variable Costs
c)
Explicit Costs
d)
Implicit Costs
50.
The market value of all the inputs a firm uses in production.
a)
Implicit Costs
b)
Explicit Costs
c)
Total Costs
d)
Marginal Costs
51.
Additional cost associated by producing one additional unit of product.
a)
Fixed Costs
b)
Average Costs
c)
Marginal Costs
d)
Emplicit Costs
52.
The amount a firm receives for the sale of its output.
P x Q = _____
a)
Profit
b)
Total Revenue
c)
Marginal Revenue
d)
Average Profit
53.
Input costs that may not have a direct outlay of money.  Value of the opportunity cost.
a)
Fixed Cost
b)
Variable Cost
c)
Implicit Cost
d)
Explicit Cost
54.
Revenue generated by producing one additional unit of product.
a)
Marginal Revenue
b)
Marginal Profit
c)
Total Revenue
d)
Average Revenue
55.
The property whereby long-run average total cost falls as the quantity of output increases.
a)
Economies of Scale
b)
Efficient Scale
c)
Constant Returns to Scale
d)
Diseconomies of Scale
56.
Fixed Cost divided by the quantity of output.
a)
Average Fixed Cost
b)
Average Variable Cost
c)
Marginal Cost
d)
Marginal Fixed Cost
57.
The relationship between the quantity of inputs used to make a good and the quantity of output produced.
a)
Diminishing Marginal Utility
b)
Production Function
c)
Conjunction Junction
d)
Economies of Scale
58.

It shows all combinations of inputs, which cost the same total amount.

a)

isocost line

b)

utility

c)

total utility

d)

budget line

59.

It represents what can be produced; also known as product indifference curve.

a)

isoquant

b)

isocost curve

c)

isoquant-isocost model

d)

marginal product

60.
What does break even point show?
a)
where a business is neither making a profit or loss
b)
how many items to make
c)
how much profit they're making
d)
where a business has more fixed costs than variable
61.

Frederick is revising his formulae for a test on break-even. He has mixed up his revision notes. What is the formulas for Profit

a)

Total revenue - total cost

b)

Fixed cost + variable cost

c)

Actual output - break-even point

d)

Total revenue = total cost

62.

In the long-run all costs are:

a)

Variable Costs

b)

Fixed Costs

c)

Total Cost

d)

Marginal Cost

63.

When production increases fixed costs does what?

a)

Increases

b)

Decreases

c)

Remains the same

d)

Diminishes

64.

Fixed costs + variable costs =

a)

Average costs

b)

Fixed Costs

c)

Total Cost

d)

Marginal Cost

65.

Select all the options that comprises short-run costs:

a)

Variable Costs

b)

Fixed Costs

c)

Expense Costs

d)

Sunk costs

66.

Fixed costs are also referred to as

a)

Average fixed costs

b)

Total Costs

c)

Sales Costs

d)

Total Fixed Costs

67.

Identity curve number 3

a)

Fixed cost

b)

Variable cost

c)

Total cost

d)

Marginal cost

68.

In the long run...

a)

All inputs are fixed

b)

All input are variable

c)

at least one input is variable and one input is fixes

d)

at most one input is variable and one input is fixed

69.

A firm experiences decreasing marginal return only when

a)

Stage 1

b)

Stage 2

c)

Stage 3

d)

Stage 4

70.

A cost that is included in economic profit

a)

Implicit Cost

b)

Marginal Cost

c)

Average Cost

d)

Economic Cost

71.

If a firm does not produce any output, its total cost in the short run is equal to

a)

Zero

b)

Its fixed costs

c)

Its variable costs

d)

Its marginal cost

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