Business Economics Quiz | Business Economics Multiple Choice Questions and Answers

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Questions
1 Which of the following factor is important for demand along other factors?
A Selling Power
B Ability to Buy
C Product Development
D New product Launch

Answer: Ability to Buy
2 PV in Unit number one stands for ………
A Postal Volume
B Past Value
C Programmable Value
D Present Value

Answer: Present Value
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3 Invisible Hand theory was described by …….
A Robert Anthony
B Adam Smith
C Amartya Sen
D C.K. Pralhad

Answer: Adam Smith
4 Principal Agent Problem is related to…….
A Managers and Owners
B Suppliers and Buyers
C Producers and Sellers
D LIC Agents

Answer: Managers and Owners
5 Entrepreneurs do all of the following EXCEPT
A Bear risk from business decisions.
B Own all the other resources.
C Come up with new ideas about what, how, when and where to produce.
D Organize labor, land, and capital.

Answer: Own all the other resources.
6 Microeconomics focuses on all of the following EXCEPT
A The effect of increasing the money supply on inflation.
B The purchasing decisions that an individual consumer makes.
C The effect of an increase in the tax on cigarettes on cigarette sales.
D The hiring decisions that a business makes.

Answer: The effect of increasing the money supply on inflation.
7 Scarcity requires that people must
A Trade.
B Compete
C Cooperate
D Make choices

Answer: Make choices
8 Economics is best defined as the study of how people, businesses, governments, and societies
A Make choices to cope with scarcity.
B Attain wealth.
C Choose abundance over scarcity.
D Use their infinite resources.

Answer: Make choices to cope with scarcity.
9 Opportunity cost means
A The accounting cost minus the marginal benefit.
B The highest-valued alternative forgone.
C The monetary costs of an activity.
D The accounting cost minus the marginal cost

Answer: The highest-valued alternative forgone.
10 Ceteris paribus is the Latin expression for
A A statement about the way the economic world ought to be.
B An expression that means "other things being equal."
C The (false) statement that what is true of the parts is true of the whole or what is true of the whole is true of the parts.
D The error of reasoning that a first event causes a second event because the first event occurred before the second event.

Answer: An expression that means "other things being equal."
11 An economic theory is
A A generalization that summarizes what we understand about economic choices.
B A positive statement that cannot use the ceteris paribus clause.
C Usually more complex than the real world.
D Always a mathematical, or nonverbal, model.

Answer: A generalization that summarizes what we understand about economic choices.
12 Economic models
A Are better if they include most of the detail of the real economy.
B Rely on simplification.
C Do not address questions about the economy.
D Make no assumptions that have not been prove

Answer: Rely on simplification.
13 The task of economic science is to discover that are consistent with .
A Positive statements; normative statements
B Positive statements; what we observe
C Normative statements; positive statements
D Ways to make money; the law

Answer: Positive statements; what we observe
14 A normative statement is
A One that does not use the ceteris paribus clause.
B About what ought to be.
C Always true.
D About what is.

Answer: About what ought to be.
15 Which of the following is a positive statement?
A Low rents will restrict the supply of housing.
B Housing costs too much.
C Low rents are good because they make apartments more affordable.
D Owners of apartment buildings ought to be free to charge whatever rent they want.

Answer: Low rents will restrict the supply of housing.
16 The statement "The unemployment rate for teens is higher than that for adults" is
A normative statement.
B A political statement.
C An ethical statement.
D A positive statement

Answer: A positive statement
17 A recession is:
A A period of declining unemployment.
B A period of declining prices
C A period during which aggregate output declines
D A period of very rapidly declining prices.

Answer: A period during which aggregate output declines
18 Inflation is:
A A decrease in the overall level of economic activity.
B An increase in the overall level of economic activity.
C An increase in the overall price level.
D A decrease in the overall price level.

Answer: An increase in the overall level of economic activity.
19 The concept of opportunity cost:
A Suggests a major increase in public health-care spending means an expansion in other areas will be harder to achieve.
B Suggests all our wants can be achieved.
C Would be irrelevant if we eliminated poverty.
D Is relevant only for a capitalist economy like the United States.

Answer: Suggests a major increase in public health-care spending means an expansion in other areas will be harder to achieve.
20 As the interest rate falls, people hold.......money instead of bonds because the opportunity cost of holding money has.......
A More; fallen
B More; risen
C Less; fallen
D Less; risen

Answer: More; fallen

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