MANAGERIAL

ECONOMICS QUIZ
PRESENTED BY :ANKITA, DHARAMPAL ,ADITI, AYUSHI
Q1. IN SCOPE OF MANAGERIAL ECONOMICS WHICH
MICRO ECONOMICS APPLIED TO OPERATIONAL ISSUE?

a. ECONOMIC ENVIRONMENT
b. THEORY OF DEMAND
c. SOCIAL ENVIRONMENT
d. POLITICAL ENVIRONMENT
ANS.(B) THEROY OF DEMAND
Q2. WHICH IS THE CORRECT NATURE OF MANAGERIAL
ENVIRONMENT?

a. DYNAMIC NATURE OF PRINCIPLE

b. MULTI DISCIPLINARY
c. MANAGEMENT AS PROFESSION
d. PRAGMATIC
ANS.(D) PRAGMATIC
Q3. WHO IS GIVEN THIS STATEMENT OF MANAGERIAL
ECONOMICS – “ BUSINESS ECONOMICS CONSIST OF THE
USE OF ECONOMIC MODES OF THOUGHT TO ANALYSE
BUSINESS SITUATION?”
a. SIEGELMAN AND SPENCER
b. MACNAIR AND MAREIAM
c. VINER
d. GARRY BECKER
ANS.(B) MACNAIR AND MAREIAM
Q4. STEPS OF MANAGERIAL ECONOMICS ARE:
a. 1) DEFINE THE PROBLEM C. 1)DEFINE THE PROBLEM

2)DETERMINE THE OBJECTIVE

2)DETEREMINE THE OBJECTIVE
3)FORECAST THE CONSEQUENCES
4)DISCOVER THE ALTERNATIVES
3)DISCOVER THE ALTERNATIVES
4)FORECAST THE CONSEQUENCES
5)MAKE A CHOICE

5)MAKE A CHOICE
D. 1)MAKE A CHOICE

2)FORECAST THE CONSEQUENCES

B. 1)DETERMINE THE OBJECTIVE
3)DISCOVER THE ALTERNATIVES
2) DISCOVER THE ALTERNATIVES 4)DETERMINE THE OBJECTIVES

3)DEFINE THE PROBLEM 5)DEFINE THE PROBLEM

4)MAKE A CHOICE

5)FORECAST THE CONSEQUENCES

ANS.(C) 1)DEFINE THE PROBLEM
2)DETERMINE THE OBJECTIVE
3)DISCOVER THE ALTERNATIVES
4)FORECAST THE CONSEQUENCES
5)MAKE A CHOICE
Q5. IN MANAGERIAL ECONOMICS AND OTHER DISCIPLINES
WHICH IS NOT CORRECT?

a. MANAGERIAL ECONOMICS AND ZOOLOGY

b. MANAGERIAL ECONOMICS AND PSYCOLOGY
c. MANAGERIAL ECONOMICS AND STATISTICS
d. MANAGERIAL ECONOMICS AND OPERATIONAL RESEARCH
ANS.(A) MANAGERIAL ECONOMICS AND ZOOLOGY
Q6. MANAGERIAL ECONOMICS WORKS ON TWO PRINCIPLE
–

a. CAPITAL AND PRODUCTION

b. FORWARD LOOKING AND DECISION MAKING
c. PRICING AND DECISION MAKING
d. FORWARD LOOKING AND CAPITAL
ANS.(B) FORWARD LOOKING AND DECISION MAKING
Q7. WHICH IS THE RIGHT ECONOMIC CONCEPT?

a. MARGINAL ANALYSIS
b. NUMERICAL ANALYSIS
c. FORECASTING PROCEDURE
d. INTERNET STRATEGY
ANS.(A)MARGINAL ANALYSIS
Q8. ACCORDING TO MS BARBARA WOOTEN , ECONOMICS
IS -

a. “WHAT ECONOMIST DO”.

b. “ECONOMICS IS THE STUDY OF NATURE AND CAUSES OF WEALTH OF NATIONS”.
c. “WHENEVER SIX ECONOMIST GATHER, THEY HAVE SEVEN OPINIONS”.
d. “ECONOMICS IS THE SCIENCE WHICH STUDIES HUMAN BEHAVIOUR AS A RELATIONSHIP
BETWEEN ENDS AND SCARCE MEANS WHICH HAVE ALTERNATIVE USES”.
ANS.(C) “WHENEVER SIX ECONOMIST GATHER, THEY HAVE SEVEN
OPINIONS”.
Q9. WHICH IS NOT A CORRECT STATEMENT IN ‘A DECISION
IS PROFITABLE IF’

a. IT INCREASES REVENUE MORE THAN IT INCREASES COST

b. IT REDUCES SOME COST MORE THAN IT INCREASES OTHERS
c. IT INCREASES SOME RESOURCES MORE THAN IT DECREASES OTHERS
d. IT INCREASES COST MORE THAN IT INCREASES REVENUE
ANS.(D) IT INCREASES COST MORE THAN IT INCREASES REVENUE
Q10. TO MAXIMIZE COST, PRODUCE TILL -

a. AC > MC
b. AC = MC
c. AC < MC
d. AC ~ MC
ANS.(B) AC = MC
Q11. IN OPPORTUNITY COST, THE PRODUCTION POSSIBILITY
CURVE DEMONSTRATE THAT –

a. THERE IS A LIMIT TO WHAT ONE CAN ACHIEVE, GIVEN THE AVAILABLE INSTITUTIONS,
RESOURCES AND TECHNOLOGY
b. EVERY CHOICE ONE MAKES HAS AN OPPORTUNITY COST. ONE CAN GET MORE OF
SOMETHING ONLY BY GIVING UP SOMETHING ELSE
c. ALL OF THE ABOVE
ANS.(C) ALL OF THE ABOVE
Q12. MANAGERIAL ECONOMICS IS A PRAGMATIC AS IT
TRIES TO SOLVE THE BUSINESS PROBLEM IN THEIR _______
FUNCTIONING
a. YEARLY
b. WEEKLY
c. MONTHLY
d. DAY-TO-DAY
ANS.(D) DAY-TO-DAY
Q13. WHICH IS THE RIGHT FORMULA OF PV (PRESENT
VALUE)?

a. PV = 100 * 1+I
b. PV = 100 * 1/1+I
c. PV = 1+I * 1/100
d. PV = 100 / (1+I)N
ANS.(B) PV = 100 * 1/1+I
Q14. IN ECONOMICS THE CENTRAL PROBLEM IS -

a. ALLOCATION
b. PRODUCTION
c. SCARCITY
d. MONEY
ANS.(C) SCARCITY
Q15. INDICATE BELOW WHAT IS NOT A FACTOR OF PRODUCTION

a. LAND
b. A BANK LOAN
c. LABOUR
d. CAPITAL
ANS.(B) A BANK LOAN
Q16. MACRO ECONOMICS DEALS WITH:

a. THE BEHAVIOUR OF FIRMS

b. ECONOMICS AGGREGATES
c. THE ACTIVITIES OF INDIVIDUAL UNITS
d. THE BEHAVIOUR OF THE ELECTRONICS INDUSTRY
ANS.(B) ECONOMIC AGGREGATES
Q17. MICRO ECONOMICS IS NOT CONCERNED WITH THE
BEHAVIOUR OF:

a. AGGREGATE DEMAND
b. CONSUMERS
c. INDUSTRIES
d. FIRMS
ANS.(A) AGGREGATE DEMAND
Q18. THE STUDY OF INFLATION IS A PART OF :

a. NORMATIVE ECONOMICS
b. MACRO ECONOMICS
c. MICRO ECONOMICS
d. DESCRIPTIVE ECONOMICS
ANS.(B) MACRO ECONOMICS
Q19. AGGREGATE SUPPLIES IS THE TOTAL AMOUNT:A

a. PRODUCTION BY THE GOVERNMENT

b. OF PRODUCTS PRODUCED BY A GIVEN COMPANY
c. OF LABOUR SUPPLIED BY ALL HOUSEHOLDS
d. OF GOODS AND SERVICES PRODUCED IN AN ECONOMY
ANS.(D) OF GOODS AND SERVICES PRODUCED IN AN ECONOMY
Q20. THE TOTAL DEMAND FOR GOODS AND SERVICES IN AN
ECONOMY IS KNOWN AS:

a. NATIONAL DEMAND
b. ECONOMY-WIDE DEMAND
c. GROSS NATIONAL PRODUCT
d. AGGREGATE DEMAND
ANS.(D) AGGREGATE DEMAND
Q21. IF MARGINAL BENEFIT IS GREATER THAN MARGINAL
COST, A RATIONAL CHOICE INVOLVES:

a. MORE OF THE ACTIVITY

b. LESS OF THE ACTIVITY
c. NO MORE OF THE ACTIVITY
d. MORE OR LESS, DEPENDING ON THE BENEFITS OF OTHER ACTIVITIES
ANS.(A) MORE OF THE ACTIVITY
Q22. THE CIRCULAR FLOW OF GOODS AND INCOMES SHOWS THE
RELATIONSHIP BETWEEN:

a. INCOME AND MONEY

b. WAGES AND SALARIES
c. GOODS AND SERVICES
d. FIRMS AND HOUSEHOLDS
ANS.(D) FIRMS AND HOUSEHOLDS
Q23. IN A FREE MARKET SYSTEM THE AMOUNT OF GOODS
AND SERVICES THAT ANY ONE HOUSEHOLD GETS DEPEND
UPON ITS:
a. INCOME
b. WAGE AND INTEREST INCOME
c. WEALTH
d. INCOME AND WEALTH
ANS.(D) INCOME AND WEALTH
Q24. IN A PLANNED AND COMMAND ECONOMY, ALL THE
ECONOMIC DECISIONS ARE TAKEN BY THE

a. CONSUMERS
b. WORKERS
c. GOVERNMENT
d. VOTERS
ANS.(C) GOVERNMENT
Q25. WHICH OF THE FOLLOWING STATEMENT IS TRUE
ABOUT SCARCITY:

a. SCARCITY REFERS TO THE SITUATION IN WHICH LIMITED WANTS NEEDED LIMITED RESOURCES
b. SCARCITY IS NOT A PROBLEM FOR WEALTHY
c. SCARCITY IS ONLY A PROBLEM WHEN A COUNTRY HAS TOO LARGE POPULATION
d. SCARCITY ARISE WHEN THERE IS A WIDE DESPARITY IN INCOE DISTRIBUTION
ANS.(A) SCARCITY REFERS TO THE SITUATION IN WHICH LIMITED WANTS NEEDED
LIMITED RESOURCES
 Q26.WHEN AN ECONOMY PRODUCES MORE
HOUSES AND FEWER TYPEWRITERS, IT IS
ANSWERING THE ________ QUESTION.

A)"WHERE"
B)"FOR WHOM"
C) "HOW"
D)"WHAT"
ANS.(D) “WHAT”
Q27. IN ECONOMICS, NORMATIVE STATEMENTS ARE ABOUT

• A)THE WAY THINGS OUGHT TO BE.

• B)THE WAY THINGS ARE.
• C) MARGINAL COSTS, NOT MARGINAL BENEFITS.
• D)MARGINAL BENEFITS, NOT MARGINAL COSTS.
ANS. (A) THE WAY THINGS OUGHT TO BE.
Q28. 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.
ANS. (B) THE HIGHEST-VALUED ALTERNATIVE FORGONE.
Q29. BECAUSE WE FACE SCARCITY, EVERY CHOICE
INVOLVES.

• A)THE QUESTION "WHAT."

• B)MONEY
• C) GIVING UP SOMETHING FOR NOTHING.
• D)AN OPPORTUNITY COST
ANS. (D) AN OPPORTUNITY COST
Q30.WHICH OF THE FOLLOWING IS NOT AN EXAMPLE OF
AN OPPORTUNITY COST?

• A)BECAUSE DAVID USED ALL OF HIS VACATION TIME TO PAINT HIS HOUSE, HE WAS UNABLE TO
VISIT THE CARIBBEAN LAST YEAR.
• B)BY CHOOSING TO ATTEND COLLEGE, JEAN WAS NOT ABLE TO CONTINUE WORKING AS AN
ELECTRICIAN; AS A RESULT, SHE GAVE UP MORE THAN $85,000 IN EARNINGS WHILE SHE WAS
IN COLLEGE.
• C) BECAUSE MARY IS NOW BEING PAID A HIGHER WAGE, SHE CAN AFFORD TO BUY A NEW
CAR EVEN THOUGH SHE IS MOVING INTO A BIGGER APARTMENT.
• D)BY SPENDING THURSDAY NIGHT STUDYING FOR AN ECONOMICS EXAM, A STUDENT WAS
UNABLE TO COMPLETE A HOMEWORK ASSIGNMENT FOR CALCULUS CLASS.
ANS. (C) BECAUSE MARY IS NOW BEING PAID A HIGHER
WAGE, SHE CAN AFFORD TO BUY A NEW CAR EVEN
THOUGH SHE IS MOVING INTO A BIGGER APARTMENT
Q31. 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
ANS. (B) POSITIVE STATEMENTS; WHAT WE OBSERVE
Q32. TO ANSWER THE "FOR WHOM" QUESTION, WE
STUDY.

• A)BUSINESS CYCLES.
• B)TECHNOLOGICAL CHANGE.
• C) THE GLOBAL ECONOMY.
• D)INCOME DIFFERENCES.
ANS. (D) INCOME DIFFERENCES.
Q33. THREE STEPS THAT ECONOMISTS TAKE TO DISCOVER
HOW THE ECONOMIC WORLD WORKS ARE.

• A)MODEL BUILDING; SPECULATION; AND, REVISION.

• B)OBSERVATION AND MEASUREMENT; MODEL BUILDING; AND, TESTING MODELS.
• C) DATA MINING; DATA TESTING; AND, DRAWING CONCLUSIONS.
• D)SPECULATION; OBSERVATION AND MEASUREMENT; AND, DRAWING CONCLUSIONS.
ANS. (B) OBSERVATION AND MEASUREMENT; MODEL
BUILDING; AND, TESTING MODELS.
Q34.MANAGERIAL ECONOMICS GENERALLY REFERS TO THE
INTEGERATION OF ECONOMICS THEORY WITH
BUSINESS____
• A)ETHICS
• B)MANAGEMENT
• C)PRACTICE
• D)ALL OF THE ABOVE
ANS.(C)PRACTICE
Q35. HUMAN CAPITAL IS

• A)MACHINERY THAT MEETS OR EXCEEDS FEDERAL SAFETY STANDARDS FOR USE BY HUMANS.
• B)ALL CAPITAL OWNED BY INDIVIDUALS OR CORPORATIONS, BUT NOT BY GOVERNMENTS.
• C) THE SKILL AND KNOWLEDGE OF WORKERS.
• D)ALL CAPITAL OWNED BY INDIVIDUALS, BUT NOT BY CORPORATIONS OR GOVERNMENTS.
ANS. (C)THE SKILL AND KNOWLEDGE OF WORKERS.
Q36. ECONOMISTS POINT OUT THAT SCARCITY
CONFRONTS

• A)THE RICH BUT NOT THE POOR.

• B)THE POOR BUT NOT THE RICH.
• C) BOTH THE POOR AND THE RICH.
• D)NEITHER THE POOR NOR THE RICH.
ANS.(C) BOTH THE POOR AND THE RICH.
Q37. SCARCITY IS A SITUATION IN WHICH ________.

• A)SOMETHING IS BEING WASTED

• B)LONG LINES FORM AT GAS STATIONS
• C) SOME PEOPLE ARE POOR AND OTHERS ARE RICH
• D)WE ARE UNABLE TO SATISFY ALL OUR WANTS
ANS. (D) WE ARE UNABLE TO SATISFY ALL OUR
WANTS
Q38.IN A FREE MARKET SYSTEM THE AMOUNT OF GOODS
AND SERVICES THAT ANY ONE HOUSEHOLD GETS DEPENDS
UPON ITS.
• A)INCOME
• B)WAGE AND INTEREST INCOME
• C)WEALTH
• D)INCOME AND WEALTH
ANS.(D)INCOME AND WEALTH
Q39.DISTINCTION BETWEEN PRIVATE SECTOR AND PUBLIC
SECTOR IS DETERMINED ON THE BASIS OF

• A)ECONOMIC SYSTEM
• B)MOTIVE
• C)PRINCIPLE OF PRICING
• D)ALL OF THE ABOVE
ANS. D)ALL OF THE ABOVE
Q40. MACROECONOMICS IS THE BRANCH OF ECONOMICS
THAT STUDIES

• A)PRICES OF INDIVIDUAL GOODS.

• B)IMPORTANT, AS OPPOSED TO TRIVIAL, ISSUES.
• C) THE WAY INDIVIDUAL MARKETS WORK.
• D)THE ECONOMY AS A WHOLE.
ANS. (D) THE ECONOMY AS A WHOLE.
Q41. MARGINAL COST IS THE COST

• A)OF AN ACTIVITY THAT EXCEEDS ITS BENEFIT.

• B)THAT ARISES FROM AN INCREASE IN AN ACTIVITY.
• C) THAT YOUR ACTIVITY IMPOSES ON SOMEONE ELSE.
• D)THAT ARISES FROM THE SECONDARY EFFECTS OF AN ACTIVITY.
ANS. (B) THAT ARISES FROM AN INCREASE IN AN
ACTIVITY.
Q42. 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.
ANS. (A) THE EFFECT OF INCREASING THE MONEY
SUPPLY ON INFLATION.
Q43. WHEN THE GOVERNMENT CHOOSES TO USE
RESOURCES TO BUILD A DAM, THESE SOURCES ARE NO
LONGER AVAILABLE TO BUILD A HIGHWAY. THIS CHOICE
ILLUSTRATES THE CONCEPT OF
• A)A MARKET MECHANISM.
• B)A FALLACY OF COMPOSITION.
• C) OPPORTUNITY COST.
• D)MACROECONOMICS.
ANS. (C) OPPORTUNITY COST.
Q44.WHEN A FIRMS AVERAGE REVENUE IS EQUAL TO ITS
AVERAGE COST, IT GETS____.

• A)SUPER PROFIT
• B)NORMAL PROFIT
• C)SUB NORMAL PROFIT
• D)NONE OF THE ABOVE
ANS. (B) NORMAL PROFIT
Q45. AS AN ECONOMIC CONCEPT, SCARCITY APPLIES TO.

• A)NEITHER TIME NOR MONEY.

• B) BOTH MONEY AND TIME.
• C) TIME BUT NOT MONEY.
• D)MONEY BUT NOT TIME.
ANS. (B) BOTH MONEY AND TIME.
Q46.THE RATE AT WHICH A CONSUMER IS WILLING TO
SUBSTITUTE ONE GOOD FOR ANOTHER , WHILE STILL
MAINTAINING A GIVEN LEVEL OF SATISFACTION IS CALLED.
• A) MARKET RATE OF SUBSTITUTION
• B) AVERAGE RATE OF SUBSTITUTION
• C) MARGINAL RATE OF SUBSTITUTION
• D)BUDGET CONSTRAINT
ANS. (C) MARGINAL RATE OF SUBSTITUTION
Q47.THE COST OF PRODUCTION INCLUDE

• A)THE COSTS THAT APPEAR ON THE INCOME STATEMENTS

• B)THE OPPORTUNITY COSTS FOREGONE BY PRODUCING A GIVEN PRODUCT
• C)ACCOUNTING COSTS
• D)ACCOUNTING COSTS AND OPPORTUNITY COSTS
ANS.(D)ACCOUNTING COSTS AND OPPORTUNITY
COSTS
Q48. “OUR MARGINAL REVENUE IS GREATER THAN OUR
MARGINAL COST AT THE CURRENT PRODUCTION LEVEL” THIS
STATEMENT INDICATES THAT THE FIRM :
• A)IS MAXIMIZING PROFIT
• B)SHOULD INCREASE THE QUANTITY PRODUCED TO INCREASE PROFITS
• C) SHOULD DECREASE THE QUANTITY PRODUCED TO INCREASE PROFITS
• D)NONE OF THE STATEMENTS ASSOCIATED WITH THIS QUESTION ARE CORRECT
ANS.(B)SHOULD INCREASE THE QUANTITY PRODUCED
TO INCREASE PROFITS
Q49.IF MARGINAL BENEFITS EXCEED MARGINAL COSTS IT IS
PROFITABLE TO:

• A)INCREASE Q
• B)DECREASE Q
• C)STAY AT THAT LEVEL OF Q
• D)ALL ARE CORRECT
ANS.(A)INCREASE Q
Q50.DEMAND IS DETERMINED BY:

• A)PRICE OF THE PRODUCT

• B)RELATIVE PRICES OF OTHER GOODS
• C)TASTES AND HABITS
• D) ALL OF THE ABOVE
ANS.(D) ALL OF THE ABOVE