Free Printable BusinessEcoComprehensiveQuiz

1.

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

2.

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

3.

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

4.

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

5.

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

6.

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

a)

a. Raw material

b)

b. Power

c)

c. Equipment

d)

d. labour

7.

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

8.

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

9.

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

10.

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

11.

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

12.

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

13.

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

a)

a. Utility

b)

b. Demand

c)

c. Consumption

d)

d. Scarcity

14.

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

a)

a. Supply

b)

b. Cost

c)

c. Price

d)

d. Requirements

15.

28.Perfect elasticity is known as

a)

a. Finite elastic

b)

b. Infinite elastic

c)

c. Unitary elastic

d)

d. Zero elastic

16.

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

a)

a. Positive

b)

b. Zero

c)

c. Infinity

d)

d. Negative

17.

33.Unitary elasticity of demand is:

a)

a. Zero

b)

b. Equal to one

c)

c. Greater than 1

d)

d. Less than 1

18.

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

19.

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

a)

a. responsiveness

b)

b. price

c)

c. need

d)

d. change

20.

If the Fed wants to reduce the amount of loans a bank can make, then it should adjust...

a)

Open Market Operations

b)

The Reserve Ratio

c)

The Discount Rate

21.

A contractionary policy means that the Fed is attempting to

a)

increase the size of the nation's money supply

b)

decrease the size of the nation's money supply

22.

Which policy would help fight inflation?

a)

Expansionary

b)

Contractionary

23.

Which policy would help fight unemployment?

a)

Expansionary

b)

Contractionary

24.

During a recession, the Fed should use...

a)

an expansionary policy

b)

a contractionary policy

25.

Which of the following scenarios would cause the nation’s money supply to increase?

a)

Decreasing government spending

b)

Lowering interest rates

c)

Raising interest rates

d)

Selling bonds to investors

26.

What are the actions taken to manage the availability and cost of money and credit to attain stable prices?

a)

Contractionary Policy

b)

Monetary Policy

c)

Fiscal Policy

d)

Expansionary Policy

27.

When the government spends more money than they take in each year is called a _________?

a)

Debt

b)

Deficit

c)

Surplus

d)

Expansionary

28.

what is the purpose of Monetary Policy?

a)

contribute to economic growth and stability

b)

keep rich people from getting too rich

c)

Functions like Fiscal Policy

d)

give Congress and the political parties more control of the economy

29.

The goals of monetary policy do NOT include the promotion of _____

a)

Moderate long-term interest rates

b)

Stable prices

c)

Maximum employment

d)

High government spending.

30.

The exchange of goods and services without using money is known as...

a)

near money.

b)

bartering.

c)

double coincidence of wants.

d)

fiat money.

31.

Money loses its value when it

a)

becomes too plentiful

b)

becomes too portabale

c)

is divisible

d)

is durable

32.

____________ is the price paid for the use of money.

a)

Gold

b)

Monetary policy

c)

Fiscal policy

d)

The interest rate

33.

In institution that accepts deposits and makes loans is defined as

a)

A bank

b)

Insurance

c)

Gambling

d)

A loan shark

34.

What do we call the funds that the banks keep with RBI as a portion of their Net Demand and Time Liabilities?

a)

Statutory Liquidity Ratio

b)

Cash Reserve Ratio

c)

Bank Rate Reverse

d)

Repo Rate

35.

_______controls the supply of money and bank credit:

a)

a) RBI

b)

b) Indian Banking Association

c)

c) SEBI

d)

d) None of These

36.

According to monetary policy experts

a)

if the money supply is expanding too much, higher rates of inflation will be likely.

b)

if the money supply is expanding too slowly, the unemployment rate will decline.

c)

if the money supply is expanding too slowly, prices will grow.

d)

if the money supply is shrinking, higher rates of inflation will be likely.

37.

The price elasticity of demand measures how much

a)

quantity demanded responds to a change in price.

b)

quantity demanded responds to a change in income.

c)

price responds to a change in demand.

d)

demand responds to a change in supply.

38.

An advance in farm technology that results in an increased market supply is

a)

good for farmers because it raises prices for their products but bad for consumers because it raises prices consumers pay for food.

b)

bad for farmers because total revenue will fall but good for consumers because prices for food will fall.

c)

good for farmers because it raises prices for their products and also good for consumers because more output is available for consumption.

d)

bad for farmers because total revenue will fall and bad for consumers because farmers will raise the price of food to increase their total revenue.

39.

How many firms are there in a perfect competition?

a)

1

b)

2-5

c)

Many

40.

Why does no one firm dominate in a perfect competition?

a)

No firm wants to

b)

Each firm sells to different people

c)

Each firm produces so little of the total supply that they cannot influence prices

d)

One firm will eventually dominate and make it a monopoly

41.

Factors that make it difficult for new firms to enter a market are called

a)

Barriers to entry

b)

Factors of production

c)

Limited supply

d)

Monopolistic Outlook

42.

How many firms are there in a monopoly?

a)

1

b)

2-5

c)

Many

43.

What prevents firms from entering a monopoly?

a)

Barriers to Entry

b)

Technology

c)

Price

d)

Barriers to Travel

44.

An industry that is dominated by a few large firms is

a)

monopolistic competition.

b)

a monopoly.

c)

perfect competition.

d)

an oligopoly.

45.

Businesses can "Collude" or work together to set prices

a)

Oligopoly

b)

Monopoly

c)

Perfect Competition

46.

A market structure characterized by firms producing similar product with easy entry into the market

a)

Perfect Competition

b)

Monopolistic Competition

c)

Monopoly

47.

Choose the example that goes best with an oligopoly.

a)

apples

b)

cell phone providers

c)

utilities

d)

clothing

48.

Which of the following industries is an example of a monopoly?

a)

utilities/water

b)

department stores

c)

auto industry

d)

commercial airlines

49.

Which is NOT a characteristic of a monopoly?

a)

Seller sets the market price

b)

Entry into the market is easy

c)

Firm sells a unique product

d)

One seller

50.

Why do cartels NOT last?

a)

illegal

b)

members have to keep agreement

c)

they lose money

d)

products are competitive

51.

A market that has a few sellers of basically the same goods.

a)

Perfect Competition

b)

Pure Monopoly

c)

Monopolistic Competition

d)

Oligopoly

52.

Public utilities are an example.

a)

Perfect Competition

b)

Natural Monopoly

c)

Monopolistic Competition

d)

Oligopoly

53.

List the four market structures in the order from least competitive to most competitive.

a)

Oligopoly, Monopoly, Perfect Competition, Monopolistic Competition

b)

Perfect Competition, Oligopoly, Monopoly, Monopolistic Competition

c)

Monopoly, Oligopoly, Monopolistic Competition, Perfect Competition

d)

Monopoly, Monopolistic Competition, Perfect Competition, Oligopoly

54.

Which of the following industries is an example of a monopoly?

a)

Water Utilities

b)

Departments Stores (Debenhams, John Lewis, M&S)

c)

Auto Industry (Ford, Vauxhall, BMW, Honda, Toyota)

d)

Airlines (BA, American Airlines, Cathay Pacific, Easy Jet)

55.

Select all the kinds of barriers of entry:

a)

High capital costs (fixed costs)

b)

High sunk costs

c)

Strong brand image

d)

Patent

56.

The market for razor blades is dominated by Procter and Gamble's Gillette and Edgewell Personal Care's razors. What level of barriers of entry are there in this market?

a)

Low

b)

None

c)

High

57.

A philosophy that government should not interfere with commerce or trade.

a)

Competitive-price theory

b)

Perfect competition theory

c)

Laissez-faire

d)

Monopoly theory

58.

The cost added by producing one additional product or service.

a)

Marginal cost

b)

Marginal revenue

c)

Relative cost

d)

Relative revenue

59.

The additional revenue that will be generated by increasing product sales by one unit.

a)

Profit

b)

Marginal Revenue

c)

Relative Revenue

d)

Profit Maximization

60.

The real or imagined differences between competing products in the same industry.

a)

Nonprice competition

b)

Product differentiation

c)

Marketing differential

d)

Oligopoly

61.

Large firms can work together called _________________. The desire to do so is to raise prices which is called ____________________.

a)

Collusion; price fixing

b)

Cartels; price setting

c)

Teamwork; price-fixer-upper

d)

Oligopolies; price determination

62.

Which of the following is most likely an example of a monopoly?

a)

A Starbucks across from Dunkin Donuts

b)

A gas station in the country by itself

c)

3 fast food restaurants all on the same street

d)

A Kroger 4 miles away from a Walmart

63.

The intended effects of advertising are to increase the market share for a firm and to make the demand for the product more elastic

a)

TRUE

b)

FALSE

64.

Natural monopolies typically have high fixed costs, so only one firm is able to serve the market at a profit

a)

TRUE

b)

FALSE

65.

Brand loyalty describes the willingness of consumers to buy a good at a higher price than the price of its close substitutes

a)

TRUE

b)

FALSE

66.

Since movie theaters and video arcades provide highly substitutable services, they may be considered part of the entertainment market

a)

TRUE

b)

FALSE

67.

Entry into monopolistic competition or oligopoly is not free, but it is possible

a)

TRUE

b)

FALSE

BusinessEcoComprehensiveQuiz

Total questions: 67

Worksheet time: 3hrs 10mins

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