Business Economics MCQ Questions and Answers Part – 1
Business Economics MCQ Questions and Answers Part – 2
Business Economics MCQ Questions and Answers Part – 3
1. Sales Maximisation concept is given by —–
A. Samuelson
B. adam smith
C. Marshall
D. Baumol
ANSWER: D
2. Microeconomic theory is also known as ——
A. Business Theory
B. Cost Theory
C. Individual Theory
D. Price Theory
ANSWER: D
3. Which will cause a change in the demand for good X?
A. A change in taste
B. A change in Income
C. A change in the price of X
D. A change in the price of complementary product
ANSWER: C
4. A market demand Schedule for a product indicates that ——-
A. as the product price falls, consumers buy less of the good
B. there is a direct relationship between price and quantity demanded
C. as a product price rises, consumers buy less of other goods
D. there is an inverse relationship between price and quantity demanded
ANSWER: D
5. Profit = ————
A. TR+TC
B. TR/TC
C. TR X TC
D. TR-TC
ANSWER: D
6. Profit Maximisation goal is suitable for —- and —– markets
A. Monopolistic and oligopoly
B. monopolistic and Duopoly
C. Monopoly and Perfect competition
D. Monopsony and DuopsonyANSWER: C
7. Economics is derived from the Greek word OIKONOMIKUS which means
A. Business Management
B. Economics
C. Wealth Management
D. House Management
ANSWER: D
8. Who is assured as father of Economics?
A. Adam Smith
B. Robinson
C. Marshall
D. George Bernard
ANSWER: A
9. Paul.A.Samuelson has defined economics as
A. science of wealth
B. science of material well being
C. science of dynamic growth and development
D. none of these
ANSWER: C
10. Positive Science concern with economics analysis
A. Cause relationship
B. Effect Relationship
C. Cause and Effect relationship
D. None of the above
ANSWER: C
11. The existence of both public and private sector enterprises constitutes
A. capitalist economy
B. Mixed economy
C. Socialist economy
D. None of the above
ANSWER: B
12. Capitalism refers to
A. the use of markets
B. government ownership of capital goods
C. private ownership o capital goods
D. private ownership of homes and cars
ANSWER: C
13. People wants are
A. more
B. limited
C. few
D. unlimited
ANSWER: D
14. The subject matter of economics is
A. To ensure economic progress of the people
B. to run businessC. to satisfy unlimited wants with limited means
D. to mobilise resources and to use them
ANSWER: C
15. Under command economy, activities are guided by
A. the automatic price system
B. government planning
C. the freedom of consumers
D. competition
ANSWER: B
16. Profits is denoted as, which of the following symbol?
A. sigma
B. summation
C. pie
D. Alpha
ANSWER: C
17. In economics the central problem is
A. money
B. production
C. consumption
D. scarcity
ANSWER: D
18. Utility is measured by
A. wealth
B. price
C. value or worth
D. income
ANSWER: C
19. The extra utility from consuming one more unit of a commodity is called
A. Marginal utility
B. Additional utility
C. Surplus utility
D. Bonus utility
ANSWER: A
20. If marginal utility is zero
A. Total utility is zero
B. An additional unit of consumption will decrease total utility
C. consumption will increase total utility
D. Total utility is maximised
ANSWER: D
21. Economics is a science the basis of this statement does not include
A. relation between cause and effect
B. use of deductive method and inductive method for the formation of laws
C. experiments
D. theory
ANSWER: D
22. Which of the following is an economic activity?
A. teacher teaching in the school
B. to teach son at home
C. to serve her child by mother
D. to play football by a student
ANSWER: A
23. Sales Maximisation is suitable for —— market
A. oligopoly
B. duopoly
C. Monopoly
D. Monopsony
ANSWER: A
24. Demand is a function of ——-
A. Income
B. Advertisement
C. Consumers
D. Price
ANSWER: D
25. When we know the quality of a product that buyers wish to purchase at each possible price, we know
A. Demand
B. Supply
C. Excess demand
D. Excess supply
ANSWER: A
26. A Market demand can be derived by adding all the individual demand curves ——
A. vertically
B. horizontally
C. in parallel
D. by any of the above as long as it is consistent
ANSWER: C
27. Law of demand does not include
A. price of commodity is an independent variable
B. quantity demanded is a dependent variable
C. reciprocal relationship is found between price and quantity demanded
D. cost of product
ANSWER: D
28. For inferior commodities income effect is ——–
A. zero
B. negative
C. infinite
D. positive
ANSWER: B
29. In relatively elastic demand ED is ——
A. E=1
B. E=0
C. E>1
D. E<1
ANSWER: C30. A relative change in quantity demanded is less than the relative change in money income is —— income
elasticity
A. high
B. zero
C. negative
D. low
ANSWER: D
31. When prediction about the future is based on the assumption that the firm does not change the course of its action is ——– forecast
A. Passive
B. Active
C. Short run
D. Long run
ANSWER: A
32. Which is not a determinant of demand?
A. income
B. the cost of inputs in production
C. the prices of related goods
D. future price expectations
ANSWER: B
33. The price elasticity of demand is the ——
A. percentage change in the price of one will decrease the demand for the other
B. an increase in the price of one will increase the decrease for the other
C. a decrease in the price of one will increase the demand for the other
D. a decrease in the price of one will have no effect on the demand for the other
ANSWER: B
34. people demand more of product X when the price of product Y decreases. This means X and Y are
A. complements
B. both inexpensive
C. not related
D. substitutes
ANSWER: D
35. Derived demand is directly determined by ——
A. utility
B. the profitability of using inputs to produce output
C. the ability to satisfy consumer desires
D. personal consumption
ANSWER: B
36. An increase in consumer income will increase demand for a —— but decrease demand for a —–
A. substitute goods, inferior goods
B. normal goods, inferior goods
C. inferior goods, normal goods
D. normal goods, complementary goods
ANSWER: B
37. When demand is elastic——–
A. a fall in price more than offset by an increase in quantity demanded, so that total revenue rises
B. the goods is probably a necessity, so price has little effect on quantity demanded
C. a rise in price will increase total revenue even though less is sold
D. buyers are not much influenced by prices of competing precedes
ANSWER: C
38. The demand for a good is highly inelastic if——-
A. theprice elasticity of the goods is close to zero
B. the income elasticity of the goods is close to one
C. if it is a necessity
D. both a and c
ANSWER: D
39. A perfectly inelastic demand curve ——-
A. is a vertical line parallel to Y axis
B. is a vertical line parallel to X axis
C. indicates a good with no close substitutes
D. a and c
ANSWER: D
40. Demand curve is a ——-
A. falling curve
B. rising curve
C. upward sloping curve
D. downward sloping curve
ANSWER: D
41. A positive cross elasticity of demand coefficient indicates that—–
A. a product is an inferior good
B. a product is a normal goods
C. two products are substitutes
D. two products are complementary
ANSWER: C
42. Forecasts ————
A. become more accurate with longer time horizons
B. are rarely perfect
C. are more accurate for individual items than for groups of items
D. all of the above
ANSWER: A
43. One purpose of short-range forecasts is to determine ———-
A. production planning
B. inventory budgets
C. research and development plans
D. facility location
ANSWER: D
44. Forecasts are usually classified by time horizon into three categories they are ——-
A. short-range, medium-range and long-range
B. finance/accounting, marketing and operations
C. strategic, tactical and operational
D. exponential smoothing, regression and time series
ANSWER: A
45. A forecast with a time horizon of about 3 months to 3 years is typically called a ——-
A. long-range forecast
B. medium-range forecast
C. short-range forecast
D. weather forecast
ANSWER: B
46. Forecasts used for new product planning, capital expenditure, facility location or expansion and R&D
typically utilize a ——-
A. short-range time horizon
B. medium-range time horizon
C. long-range time horizon
D. naive method, because there is no data history
ANSWER: C
47. The three major types of forecasts used by business organisation are ——
A. strategic, tactical and operational
B. economic, technological and demand
C. exponential smoothing, Delphi and regression
D. Casual, time series and seasonal
ANSWER: D
48. Which of the following is not a step in the forecasting process
A. determine the use of the forecast
B. eliminate any assumptions
C. determine the time horizon
D. historical and associative
ANSWER: B
49. The two general approaches to forecasting are———
A. qualitative and quantitative
B. mathematical and statistical
C. judgmental and qualitative
D. historical and associative
ANSWER: B
50. Which of the following uses three types of participants: decision-makers, staff personnel and respondents
A. executive opinions
B. sales force composites
C. the Delphi method
D. consumer surveys
ANSWER: D
