This quiz works best with JavaScript enabled. Home > Finance > Economics > Managerial Economics > Managerial Economics – Quiz 3 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Managerial Economics Quiz 3 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. He does not like government intervention in our economy. A) Adam Smith. B) Earl Uy. C) Abraham Marshmallow. D) Adam Sandler. Show Answer Correct Answer: A) Adam Smith. 2. Heightens competition and reduces the margins of existing firms in a wide variety of industry settings. A) Entry Cost. B) Enter. C) Sunk Cost. D) Entry. Show Answer Correct Answer: D) Entry. 3. Managerial economics deals with A) Micro economics. B) Macro economics. Show Answer Correct Answer: A) Micro economics. 4. Suppose a $ 3 price ceiling is imposed on the market. Find Qs A) 6. B) 8. C) 7. D) 0. Show Answer Correct Answer: B) 8. 5. Tea and coffee are? A) Complementary goods. B) Normal goods. C) Substitute goods. D) Giffen goods. Show Answer Correct Answer: C) Substitute goods. 6. What do you call the level of satisfaction that is measured in units? A) Equilibrium. B) UTILS. C) Consumer satisfaction. D) Negative Utility. Show Answer Correct Answer: B) UTILS. 7. Oligopoly is a type of ..... market. A ..... exists in the industry A) Imperfect, few firms. B) Perfect, few firms. C) Imperfect, many firms. D) Perfect, many firms. Show Answer Correct Answer: A) Imperfect, few firms. 8. Identify the truthfulness of the following statements.I. When marginal cost is rising, average total cost is rising. II. When marginal cost is below average total cost, average total cost is falling. A) Both I and II are true. B) Both I and II are false. C) I is true; II is false. D) I is false; II is true. Show Answer Correct Answer: D) I is false; II is true. 9. In a certain textile firm, labor is the only short term variable input. The manager notices that the marginal product of labor is the same for each unit of labor, which implies that A) The average product of labor is always greater than the marginal product of labor. B) The average product of labor is always less than the marginal product of labor. C) The average product of labor is always equal to the marginal product of labor. D) As more labor is used, the average product of labor falls. Show Answer Correct Answer: C) The average product of labor is always equal to the marginal product of labor. 10. Which of the following expenses is not an explicit expense? A) Salary. B) Interest. C) Raw material. D) None of these. Show Answer Correct Answer: D) None of these. 11. ..... is known as father of economics A) Marshal. B) A C Pigou. C) Adam smith. D) Robins. Show Answer Correct Answer: C) Adam smith. 12. If we continuously consume a particular commodity the satisfaction that we derive from consuming will keep on declining. This concept is related to? A) DMU. B) Demand decline. C) Demand shortening. D) None of these. Show Answer Correct Answer: A) DMU. 13. An excess of supply over the demand for a good. A) Price Floor. B) Equilibrium. C) Price Ceiling. D) Surplus. Show Answer Correct Answer: D) Surplus. 14. Iso quants touch the axes A) True. B) False. Show Answer Correct Answer: B) False. 15. Marginal cost curve always cut the average cost curve A) From below on the rising portion of the AC curve. B) From below on the falling portion of the AC curve. C) From below at the minimum point of the AC curve. D) From below at any point of the AC curve. Show Answer Correct Answer: C) From below at the minimum point of the AC curve. 16. Average fixed costs: A) Remain same at all levels of output. B) Increase as output increases. C) Decreases as output increases. D) Initially increases and then decreases. Show Answer Correct Answer: C) Decreases as output increases. 17. MC can be directly derived from: A) TVC. B) AFC. C) TFC. D) AC. Show Answer Correct Answer: A) TVC. 18. 'What ought to be done' is related with which among the following? A) Normative. B) Positive. C) Both normative & positive. D) None of these. Show Answer Correct Answer: A) Normative. 19. Which of these deals with marginal utilities of two products being at equilibrium A) Law of diminishing marginal utility. B) Consumer equilibrium. C) Law of equi-marginal utility. D) Indifference curve. Show Answer Correct Answer: C) Law of equi-marginal utility. 20. Generally when calculating profits as total revenue minus total costs, accounting profits are larger than economic profits because economists take into account A) Only explicit costs. B) Only implicit costs. C) Both explicit and implicit costs. D) Both types of profits are always equal because they account for the same costs. Show Answer Correct Answer: C) Both explicit and implicit costs. 21. Scarcity definition by A) Robbins. B) Smith. C) Marshall. D) Fin. Show Answer Correct Answer: A) Robbins. 22. Economies and diseconomies of scale explain A) Why the average fixed cos curve is falling. B) Why the average variable cost cost curve is U-shaped. C) Why there are three stages of production. D) Why the long-run average cost curve is U-shaped. Show Answer Correct Answer: D) Why the long-run average cost curve is U-shaped. 23. Basic economic tools of managerial economics does not include A) Principle of time perspective. B) Equi-marginal principle. C) Incremental principle. D) None of these. Show Answer Correct Answer: D) None of these. 24. Economics helps to understand taxation and government policies. A) True. B) False. Show Answer Correct Answer: A) True. 25. Which of the following is an implicit cost? A) Wages paid to its employee. B) Rent paid for hired types of equipment. C) Taxes on company property. D) Depreciation charged on company-owned equipment. Show Answer Correct Answer: D) Depreciation charged on company-owned equipment. 26. Consumers become much more concerned about price changes when the good feels expensive, making the demand elastic. A) True. B) False. Show Answer Correct Answer: A) True. 27. Statement 1:Appropriate planning and measuring profit which is the most important and challenging area on managerial economics.Statement 2:Success of a firm depends on its primary measure and that is profit. A) Only statement 1 is correct. B) Only statement 2 is correct. C) Both statements are correct. D) Both statements are incorrect. Show Answer Correct Answer: C) Both statements are correct. 28. Economies of scale exist when the long-run average cost ..... as output expands. Labor specialization and technical factors often give rise to economies of scale. A) Increased. B) Decreased. C) Equal to Marginal Cost. D) None of the above. Show Answer Correct Answer: B) Decreased. 29. Which of the statements below best illustrates the use of the market process in determining the allocation of scarce resources? A) "Everyone is opening video stores, why don't we?". B) "We can't stop making this product. This product gave our company its start.". C) "Let's make this product because this is what we know how to do best.". D) "We should consider shifting to products where we can earn even more money.". Show Answer Correct Answer: D) "We should consider shifting to products where we can earn even more money.". 30. It is the willingness to take certain risks in the pursuit of goals. A) Management. B) Microeconomics. C) Entrepreneurship. D) Stages of Model of Change. Show Answer Correct Answer: C) Entrepreneurship. ← PreviousNext →Related QuizzesEconomics QuizzesFinance QuizzesManagerial Economics Quiz 1Managerial Economics Quiz 2Managerial Economics Quiz 4Managerial Economics Quiz 5Managerial Economics Quiz 6Managerial Economics Quiz 7Managerial Economics Quiz 8Managerial Economics Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books