About Business economics

Following are some of the multiple choice questions on the Business economics with answers that will help the students in developing their knowledge.

Business economics MCQ

1. Speculation means

  • betting on horses
  • gambling
  • forecasting future prices
  • planning for future purchases

2. What is Opportunity Cost?

  • This is the study of how human beings behave as they satisfy their unlimited wants and needs.
  • The value of the next best alternative forgone.

3. Economics is the study of

  • how society manages its unlimited resources.
  • how to reduce our wants until we are satisfied.
  • how to fully satisfy our unlimited wants.
  • how to avoid having to make trade-offs.

4. What is Business Studies?

  • This is the study of how businesses are formed, how they grow & how the operate/managed.
  • This is the study of how human beings behave as they satisfy their unlimited wants and needs.
  • This is the value of the next best alternative forgone.
  • none of the above

5. What are Wants?

  • These are goods and services which human beings cannot live without.
  • These are goods and services which human beings desire but can live without.
  • All the above.
  • None of these

6. Determinants of Elasticity of Demand

  • Nature of Commodity
  • Substitute Goods
  • Price of Commodity
  • All of above

7. Who invented communism?

  • Plato
  • Karl Marx
  • Paul Samuelson
  • Adam Smith

8. Expert Opinion method is also known as

  • Delphi Method
  • Marshall Method
  • Tausing Method
  • none of the above

9. When marginal utility from the consumption of a commodity is zero, then the:

  • Total utility is zero
  • Total utility is highest
  • Total utility is rising
  • Total utility is falling.

10. Australia's biggest trading partner is ...

  • USA
  • Japan
  • Mongolia
  • China

11. Indifference curves between income and leisure for an individual are generally:

  • Concave to the origin
  • Convex to the origin
  • Negatively sloped straight lines
  • Positively sloped straight lines

12. When two goods are perfect complementary, the indifference curve is:

  • A straight line
  • U shaped
  • L – shaped
  • Circular in shape.

13. Total utility maximum when:

  • (a) Marginal utility is maximum
  • (b) Marginal utility is Zero
  • (c) Average utility is maximum
  • (d) Average utility is Zero

14. In this type of economy, the people decide the supply, demand, and price.

  • Market 
  • Traditional
  • Command 
  • Mixed

15. Total utility starts decreasing when --------------.

  • Marginal utility becomes zero
  • Marginal utility is positive
  • Marginal utility becomes negative
  • None of these

16. Firms supply

  • goods and services
  • good and the quantity supplied
  • Both A & B
  • none of the above

17. The father of Economics is

  • Adam Smith
  • Marshall
  • Lionel Robbins
  • Hicks

18. At equilibrium under ordinal approach the MRS should be equal to

  • MRTS
  • Price Ratio
  • Price
  • Income

19. Demand Function explain relationship between demand for Commodity and its___________.

  • Determinants
  • Elasticity
  • Only Price
  • Elements

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

  • Perfect Competition
  • Monopoly
  • Oligopoly
  • Monopolistic Competition

21. "------------------ of demand is the proportional change of amount purchased in response to small change in price."

  • Elasticity
  • bend backward
  • Both A & B
  • None of these

22. The driving force behind people going into business is

  • profit margin
  • profit motive
  • opportunity cost
  • taxes

23. The economic problem is that

  • resources are limited and wants are limited.
  • resources are unlimited and wants are limited.
  • resources are limited and wants are unlimited.
  • resources are unlimited and wants are unlimited.

24. When the TU is maximum then MU is?

  • Zero
  • Negative
  • Both
  • None.

25. Capitalism is in what type of economy?

  • Traditional
  • Command
  • Market
  • Authortarian

26. What are Needs?

  • Both A & B
  • These are goods and services which human beings desire but can live without.
  • These are goods and services which human beings cannot live without.
  • none of the above

27. The business sector can be described as...

  • producers that provide goods and services to satisfy the needs and wants of households
  • consumers that are working in the business sector to earn money
  • consumers that purchase goods and services for the business sector
  • producers that provide goods and services to consumers in order to make a profit

28. A service is...

  • are the products offered by businesses
  • are companies that offer business to consumers
  • are physical, tangible items that can be seen and touched
  • the actions that are done by businesses for consumers

29. Goods are...

  • goods are sold at supermarkets for consumption
  • goods are intangible items that cannot be seen or touched
  • goods are actions done by businesses for consumers
  • goods are physical, tangible products that can be seen and touched

30. Capital is...

  • the money or cash on hand that a business has at their disposal
  • all the equipment used by human labour in the process of production
  • all the equipment used when to create goods and services for the consumers
  • the resources required to produce goods and services for consumers

31. Exports are...

  • goods and services that are purchased from overseas businesses
  • goods and services that are exported to overseas governments
  • goods and services that are sold domestically to the household sector
  • goods and services sold by local businesses to overseas consumers

32. Land refers to...

  • all the raw materials that mined and used in difference resources to create goods and services for the consumer
  • all the raw materials and other natural resources that go into the production of goods and services
  • all the raw materials that are offered to producers as goods and services for the consumer
  • all the raw materials that are mined in minecraft

33. Supply represents...

  • how much of a product or service the market has to offer
  • how much of a product that the customer wants to buy
  • how many goods are available for purchase
  • how much of a product or service that buyers want to sell

34. The economy is the total of all activities for the purpose of...

  • producing, marketing and selling goods and services in a country
  • creating, designing and exploring goods and services in a country
  • producing, distributing and consuming goods and services in a country
  • producing, distributing and selling foods and services in a country

35. Demand Forecasting is also known as ________Forecasting

  • Sales
  • Production
  • Quantity
  • none of the above

36. Demand Forecasting is base for estimating sales, production, overhead budgets.

  • True
  • False

37. The economic problems of relative scarcity refers to...

  • consumers purchasing goods and services from businesses
  • consumers not being able to afford different goods and services
  • consumers making purchasing decisions in relation to their needs and wants
  • consumers making purchasing decisions in relations to goods and services

38. The financial sector can be described as...

  • banks that use the deposits collected in order to help businesses grow
  • financial intermediaries that collect deposits and invest in the growth of businesses
  • financial intermediaries that allow consumers to open savings accounts
  • banks that charge interest on loans that are offered to consumers

39. Household demand is...

  • the amount of goods or services that consumers are willing and able to purchase at a point in time
  • the amount of products created throughout the production process that are available to the household sector
  • the amount of goods and services that businesses produce for the household sector at a point in time
  • the amount of goods required in the production process

40. Labour is...

  • the human process of manufacturing goods and services
  • the human skills and effort required in the production process
  • the human skills required to acquire raw materials
  • the human skills and effort required to manufacture goods and services

41. Gross Domestic Product (GDP) refers to

  • the total monetary value of a country based on goods and services produced
  • the total value of all goods and services that are required for the production process
  • the total value of all goods and services produced in a business in a given period of time
  • the total value of all goods and services produced in a country in a given period of time

42. A budget constraints line is a result of:

  • Market price of commodity X
  • Market price of commodity Y
  • Income of the consumer
  • All of these

43. A supply chain is...

  • The transport of goods by sea or some other means
  • The sequence of processes involved in the production and distribution of a product or service
  • The commercial activity of transporting goods to customers
  • The amount of a commodity, product, or service available and the desire of buyers for it

44. Efficiency is producing the maximum possible output from available resources

  • True
  • False

45. Opportunity cost can be defined as...

  • Having fewer resources than needed to fill human wants and needs
  • A time or set of circumstances that makes it possible to do something
  • Anxiety that an exciting or interesting event may currently be happening elsewhere, often aroused by posts seen on social media
  • The loss of other alternatives when one alternative is chosen

46. The GFC was caused by.....

  • Consumer confidence was low due to the war in Iraq
  • Banks and other lenders were willing to make increasingly large volumes of risky loans
  • The American government was in debt to the IMF and interest rates were increased significantly
  • Baked beans

47. The four sectors in the economy are...

  • The household sector, financial sector, business sector & government sector
  • The household sector,tax sector,business sector, & government sector
  • The business sector, tax sector, household sector & financial sector
  • The financial sector, government sector, corporate sector, & household sector

48. Buyers choose what items are produced based on their spending habits

  • Consumer Sovereignty
  • Factors of Production
  • Efficiency
  • Cost / Benefit Analysis

49. Marginal utility is a ------ Concept.

  • Cardinal
  • Ordinal
  • Both
  • None

50. On which approach, indifference curve analysis is based?

  • Cardinal approach.
  • Ordinal approach.
  • Cardinal and ordinal both.
  • None of the above.

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