Chapter 1 Quiz: Introduction to Business Economics

Get started with our Chapter 1 Quiz: Introduction to Business Economics! Test your knowledge on demand, supply, and decision-making. Let’s make learning fun – begin the quiz now!

1. Economists regard decision making as important because: (a) The resources required to satisfy our unlimited wants and needs are finite, or scarce. (b) It is crucial to understand how we can best allocate our scarce resources to satisfy society’s unlimited wants and needs. (c) Resources have alternative uses. (d) All the above.

2. Business Economics is (a) Abstract and applies the tools of Microeconomics. (b) Involves practical application of economic theory in business decision making. (c) Incorporates tools from multiple disciplines. (d) (b) and (c) above.

3. In Economics, we use the term scarcity to mean (a) Absolute scarcity and lack of resources in less developed countries. (b) Relative scarcity i.e. scarcity in relation to the wants of the society. (c) Scarcity during times of business failure and natural calamities. (d) Scarcity caused on account of excessive consumption by the rich.

4. What implication(s) does resource scarcity have for the satisfaction of wants? (a) Not all wants can be satisfied. (b) We will never be faced with the need to make choices. (c) We must develop ways to decrease our individual wants. (d) The discovery of new natural resources is necessary to increase our ability to satisfy wants.

5. Which of the following is a normative statement? (a) Planned economies allocate resources via government departments. (b) Most transitional economies have experienced problems of falling output and rising prices over the past decade. (c) There is a greater degree of consumer sovereignty in market economies than planned economies. (d) Reducing inequality should be a major priority for mixed economies.

6. In every economic system, scarcity imposes limitations on (a) households, business firms, governments, and the nation as a whole. (b) households and business firms, but not the governments. (c) local and state governments, but not the federal government. (d) households and governments, but not business firms.

7. Macroeconomics is also called——— economics. (a) applied (b) aggregate (c) experimental (d) none of the above

8. An example of ‘positive’ economic analysis would be: (a) an analysis of the relationship between the price of food and the quantity purchased. (b) determining how much income each person should be guaranteed. (c) determining the ‘fair’ price for food. (d) deciding how to distribute the output of the economy.

9. A study of how increases in the corporate income tax rate will affect the national unemployment rate is an example of (a) Macro-Economics. (b) Descriptive Economics. (c) Micro-economics. (d) Normative economics.

10. Which of the following does not suggest a macro approach for India? (a) Determining the GNP of India. (b) Finding the causes of failure of ABC Ltd. (c) Identifying the causes of inflation in India. (d) Analyse the causes of failure of industry in providing large scale employment