Free Printable Business Economics

1.

1. Forward planning goes hand in hand with

a)

a. decision making

b)

b. capital

c)

c. stock

d)

d. sales

2.

2.The famous book on economics “An Enquiry into the Nature and Cause of Wealth of Nation” was written by

a)

a. Marshal

b)

b. Ricardo

c)

c. Robins

d)

d.Adam Smith

3.

3. Wealth definition of economics is given by

a)

a. J B Say

b)

b. Lionel Robbins

c)

c. Adam Smith

d)

d. Alfred Marshall

4.

4. If the income elasticity of demand is that one, the good is a

a)

a. Necessity

b)

b. Luxury

c)

c. Substitute

d)

d. Complement

5.

5.The income elasticity of demand is negative for a

a)

a. complement good

b)

b. normal good

c)

c. superior good

d)

d. inferior good

6.

6. What effect is working when the price of a good falls and consumers tend to buy it instead of other goods.

a)

a. Income effect

b)

b. Substitution effect

c)

c. Price effect

d)

d. complementary effect

7.

7.Two goods that are used jointly to provide satisfaction are called

a)

a. Inferior goods

b)

b. Normal goods

c)

c. Complementary goods

d)

d. Substitute goods

8.

8. Demand curve slopes downwards because of

a)

a. The law of diminishing marginal utility

b)

b. The income effect

c)

c. Substitution effect

d)

d. All of the above

9.

9. If the income and substitution effect of a price increase works in the same direction the good whose price has changed is a

a)

a. Giffen goods

b)

b. Inferior goods

c)

c. Normal goods

d)

d. Superior one of these

10.

10.Which one is not a property of isoquant

a)

a. Downward sloping

b)

b. Convex

c)

c. Negative slope

d)

d. Positive slope

11.

11. In which production function, the degree of homogeneity is always one

a)

a.Cobb Douglas production function

b)

b. Homogeneous production function

c)

c. Linear homogeneous production function

d)

d. Regression

12.

12.Which of the following is a short run law.

a)

a. Law of diminishing returns

b)

b. Law of constant returns to scale

c)

c. Law increasing returns to scale

d)

d. Law of constant return

13.

13. Which of the following is not a variable input.

a)

a. Raw material

b)

b. Power

c)

c. Equipment

d)

d. labour

14.

14. Which cost is more useful for decision making

a)

a. Opportunity cost

b)

b.Sunk cost

c)

c.Historical cost

d)

d. Variable cost

15.

15. Which cost are recorded in books of accounts

a)

a.Opportunity cost

b)

b.Implicit cost

c)

c. Social cost

d)

d.Explicit cost

16.

16.Which cost is more useful for decision making.

a)

a. Opportunity cost

b)

b. Sunk cost

c)

c. Historical cost

d)

d. variable cost

17.

17. Which cost are recorded in books of accounts

a)

a. Opportunity cost

b)

b. Implicit cost

c)

c. Social cost

d)

d. Explicit cost

18.

18.Fixed cost per unit increases when

a)

a. Volume of production decreases

b)

b. Volume of production increases

c)

c. Variable cost per unit decreases

d)

d. variable cost remains constant

19.

19. Variable cost per unit

a)

a. Remains fixed

b)

b. Varies with the volume of production

c)

c. Varies with sales

d)

d. varies with consumption

20.

20.……… refers to the quantity of a good or service that producers are willing and able to sell during a certain period under a given set of conditions

a)

a. Supply

b)

b. Demand

c)

c. Price

d)

d. Production change

21.

21.The degree of responsiveness of supply to changes in the price of a good

a)

a. Elasticity of demand

b)

b. Elasticity of supply

c)

c. Both (a) & (b)

d)

d. cross elasticity

22.

22. Opportunity cost means

a)

a. The accounting cost minus the marginal benefit.

b)

b. The highest-valued alternative forgone.

c)

c. The monetary costs of an activity.

d)

d. The accounting cost minus the marginal cost

23.

23. In economics, desire backed by purchasing power is known as

a)

a. Utility

b)

b. Demand

c)

c. Consumption

d)

d. Scarcity

24.

24.The demand has three essentials ‐ Desire, Purchasing power and ………..

a)

a. Quantity

b)

b. Cash

c)

c. Supply

d)

d. Willingness to purchase

25.

25. Law of demand shows the functional relationship between _______ and quantity demanded

a)

a. Supply

b)

b. Cost

c)

c. Price

d)

d. Requirements

26.

26. Basic assumptions of law of demand include

a)

a. Prices of other goods should change.

b)

b. There should be substitute for the commodity.

c)

c. The commodity should not confer any distinction

d)

d. The demand for the commodity should not be continuous

27.

27. Generally demand curve have …………

a)

a. Negative slope

b)

b. Positive slope

c)

c. Horizontal line

d)

d. Vertical line

28.

28.Perfect elasticity is known as

a)

a. Finite elastic

b)

b. Infinite elastic

c)

c. Unitary elastic

d)

d. Zero elastic

29.

29. In the case of perfect elasticity, the demand curve is

a)

a. Vertical

b)

b. Horizontal

c)

c. Flat

d)

d. Steep

30.

30.When the demand curve is a rectangular hyperbola, it represents:

a)

a. Perfectly elastic demand

b)

b. Unitary elastic demand

c)

c. Perfectly inelastic demand

d)

d. Relatively elastic demand

31.

31.When an individual’s income falls (while everything else remains the same), his demand for an inferior good:

a)

a. Increases

b)

b. Decrease

c)

c. Remains unchanged

d)

d. negative

32.

32. Cross elasticity of demand between tea and sugar is:

a)

a. Positive

b)

b. Zero

c)

c. Infinity

d)

d. Negative

33.

33.Unitary elasticity of demand is:

a)

a. Zero

b)

b. Equal to one

c)

c. Greater than 1

d)

d. Less than 1

34.

34. Economies of scale mean increasing production with _____ per unit.

a)

a. increase in total cost

b)

b. decrease in average cost

c)

c. increase in marginal cost

d)

d. no change in cost

35.

35.The law of diminishing returns only applies in cases where:

a)

a. there is increasing scarcity of factors of production.

b)

b. the price of extra units of a factor is increasing.

c)

c. there is at least one fixed factor of production.

d)

d. capital is a variable input.

36.

36.The three fundamental questions of economic organization are:

a)

a. When, for whom, and how

b)

b. How, what, and for whom

c)

c. Who, how, and when

d)

d. What, who, and why

37.

37.Economic profit refers to…..minus all relevant costs, both explicit and implicit.

a)

a.Profit

b)

b. Cost

c)

c. Expenses

d)

d. Revenues

38.

38. The marginal is closely related with

a)

a. variable cost

b)

b. fixed cost

c)

c.opportunity cost

d)

d. explicit cost

39.

39.The longrun cost curve is otherwise called as

a)

a. basket curve

b)

b. envelop curve

c)

c. u shape curve

d)

d.wallet curve

40.

40. Which of the following is not considered with production

a)

a.Tilling of soil by farmers

b)

b.singing song with friends

c)

c. construction of canal by laborers

d)

d.painting a picture for sale

41.

41. Which of the following is not a characteristic of labour?

a)

a. Its inseparable from labourer

b)

b. It is immobile and passive

c)

c. It is human efforts

d)

d. It is rewarded with wages

42.

42.The internal diseconomies is

a)

a. high salary of firm

b)

b. high tax for industry

c)

c. low tax for industry

d)

d. labour and management disputes in firm

43.

43. The external economies is

a)

a. low salary of firm

b)

b. tax exemption for industry

c)

c. high tax for industry

d)

d. labour and management disputes of firm

44.

44. The process of choosing one action from two or more alternatives available is known as

a)

a.decision making

b)

b.irrational thinking

c)

c.mis perceptions

d)

d. desire making

45.

45. The guiding principle of business economics is

a)

a.Profit maximization

b)

b.Loss maximization

c)

c.Profit minimization

d)

d. Loss minimization

46.

46.Normally the demand curve will have a _______________ shape.

a)

a. upward sloping

b)

b. downward sloping

c)

c. vertical

d)

d. horizontal

47.

47. Elasticity is the measure of ___ for demand of goods.

a)

a. responsiveness

b)

b. price

c)

c. need

d)

d. change

48.

48. If the elasticity of supply is greater than one, the supply curve would be _______.

a)

a. touching y-axis

b)

b. passing through the origin

c)

c. vertical

d)

d. horizontal

49.

49. A firm’s supply curve is on an upward slope because ______.

a)

a. The production costs of additional units of output will rise beyond a point

b)

b. Consumers see a positive relationship between price and quality

c)

c. Expansion of production leads to the use of inferior inputs

d)

d. A reduction in the price of the raw material for that product

50.

50. The law of diminishing returns applies in cases where

a)

a. there is increasing scarcity of factors of production

b)

b. the price of extra units of a factor increasing

c)

c. there is at least one fixed factor of production

d)

d. capital is a variable input

Business Economics

Total questions: 50

Worksheet time: 25mins

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