Managerial Economics 1 Set 2

Bachelor of Business Administration (BBA)

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This set of Managerial Economics 1 Multiple Choice Questions & Answers (MCQs) focuses on Managerial Economics 1 Set 2

Q1 | Product differentiation is an important feature of
  • perfect competition
  • monopolistic competition
  • monopoly
  • none of these
Answer: monopolistic competition
Q2 | ……… refers to the quantity of a good or service that producers are willing and able tosell during a certain period under a given set of conditions
  • supply
  • demand
  • price
  • production
Answer: supply
Q3 | ………. for a product is a statement of the relation between the quantity supplied and allfactors affecting that quantity
  • market demand function
  • production function
  • market supply function
  • all of the above
Answer: market supply function
Q4 | Which is/are determinants of Supply…….
  • price of the commodity
  • state of technology
  • cost of production
  • all the above
Answer: cost of production
Q5 | …………a statement in the form of a table that shows the different quantities of a commoditythat a firm or a producer offers for sale in the market at different prices.
  • supply schedule
  • production schedule
  • demand schedule
  • price schedule
Answer: supply schedule
Q6 | ……….. a schedule that depicts the supply by an individual firm or producer of a commodityin relation to its price
  • market price schedule
  • market supply schedule
  • individual supply schedule
  • none of them
Answer: individual supply schedule
Q7 | …………… is the degree of responsiveness of supply to changes in the price of a good
  • elasticity of demand
  • elasticity of supply
  • both (a) & (b)
  • none of them
Answer: elasticity of supply
Q8 | Business Economics is also known as………….
  • managerial economics
  • economics for executives
  • economic analysis for business decisions
  • all the above
Answer: all the above
Q9 | An input should be so allocated that the value added by the last unit is the same in allcases.
  • opportunity cost principle
  • equi-marginal principle
  • incremental principle
  • discounting principle
Answer: equi-marginal principle
Q10 | The principle reasons behind economic problems
  • unlimited wants
  • limited or scarce of means
  • alternatives uses of means
  • all of the above
Answer: all of the above
Q11 | The value of an entrepreneur’s resources that she uses in production are known as:
  • explicit costs.
  • sunk costs.
  • operating expenses.
  • implicit costs.
Answer: implicit costs.
Q12 | Inflation is:
  • a decrease in the overall level of economic activity.
  • an increase in the overall level of economic activity.
  • an increase in the overall price level.
  • a decrease in the overall price level.
Answer: an increase in the overall price level.
Q13 | A recession is:
  • a period of declining unemployment.
  • a period of declining prices
  • a period during which aggregate output declines
  • a period of very rapidly declining prices.
Answer: a period during which aggregate output declines
Q14 | Opportunity cost means
  • the accounting cost minus the marginal benefit.
  • the highest-valued alternative forgone.
  • the monetary costs of an activity.
  • the accounting cost minus the marginal cost
Answer: the highest-valued alternative forgone.
Q15 | ______ is economic theory used in business whereas ______ is economics theory usedin business and non-business organization
  • micro economics, macro economics
  • business economics, managerial economics
  • positive economics and normative economics
  • none of these
Answer: business economics, managerial economics
Q16 | Managerial economics is also called
  • micro economics
  • theory of the firm
  • economics of the firm
  • all of the above.
Answer: all of the above.
Q17 | Want satisfying power of commodity is called
  • demand
  • utility
  • satisfaction
  • consumption
Answer: utility
Q18 | In economics, desire backed by purchasing power is known as
  • utility
  • demand
  • consumption
  • scarcity
Answer: demand
Q19 | The demand has three essentials ‐ Desire, Purchasing power and ………..
  • quantity
  • cash
  • supply
  • willingness to purchase
Answer: willingness to purchase
Q20 | .………… means an attempt to determine the factors affecting the demand of acommodity or service and to measure such factors and their influences
  • demand planning
  • demand forecasting
  • demand analysis
  • demand estimation
Answer: demand analysis
Q21 | .………… is known as the ‘first law in market”
  • law of supply
  • law of consumption
  • law of demand
  • law of production
Answer: law of demand
Q22 | Demand = Desires + …………… + Willingness to pay
  • supply
  • utility
  • want
  • purchasing power
Answer: purchasing power
Q23 | Law of demand shows the functional relationship between _______ and quantitydemanded
  • supply
  • cost
  • price
  • requirements
Answer: price
Q24 | Basic assumptions of law of demand include
  • prices of other goods should change.
  • there should be substitute for the commodity.
  • the commodity should not confer any distinction.
  • the demand for the commodity should not be continuous
Answer: the commodity should not confer any distinction.
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