Managerial Economics Quiz 10 (20 MCQs)

Quiz Instructions

Select an option to see the correct answer instantly.

1. If the income and substitution effects of a price increase work in the same direction, the good whose price has changed is a:

Correct Answer: B) Normal good.

2. Porter's Five Forces includes analysis of interrelated forces which includes the following except:

Correct Answer: D) Market Competition.

3. Fixing prices for the factors of production is called theory of .....

Correct Answer: C) Distribution.

4. The foremost objective of business organization is?

Correct Answer: D) Profit maximization.

5. For luxuries, consumers will alter their behavior when the price rises, making the demand elastic.

Correct Answer: A) True.

6. Personal distribution refers to the distribution of ..... income among the individuals

Correct Answer: B) National.

7. Which of the following is the best definition of managerial economics? Managerial economics is .....

Correct Answer: B) A field that applies economic theory and the tools of decision science.

8. Gross Domestic Product is an increase in the average level of prices.

Correct Answer: B) False.

9. Functional relationship between demand and its determinants is called?

Correct Answer: C) Demand function.

10. Because of scarcity, an allocation decision must be made. The allocation decision of a society is comprised of three separate choices except:

Correct Answer: C) Why should these goods and services be produced?.

11. In a competitive market, there are many buyers and sellers, each has a negligible impact on market price.

Correct Answer: A) True.

12. Other things equal, Law of Demand tells us that when price of a good rises, the quantity demanded of the good falls.

Correct Answer: A) True.

13. Marginal cost refers to addition to the total cost when one more unit of output is .....

Correct Answer: B) Produced.

14. The total satisfaction a person receives from consuming a particular quantity of good.

Correct Answer: B) Total Utility.

15. It is social science that studies the implications of incentives and decisions.

Correct Answer: C) Microeconomics.

16. The short run Average Cost curve is ..... shaped

Correct Answer: B) U.

17. For necessities, consumers do not change quantity demanded much when the price changes, making demand inelastic.

Correct Answer: A) True.

18. A monopolist maximizes profit by producing the quantity at which

Correct Answer: B) Marginal revenue equals marginal cost.

19. Growth Maximization theory was given by .....

Correct Answer: A) Marris.

20. The amount that a consumer is willing to pay for an additional good decreases as more of a good is produced.

Correct Answer: B) Consumer Surplus.