Course Introduction
Business Economics
Exam Practice Tests
Business Economics explores the application of economic principles and methodologies to business decision-making processes. The course examines fundamental concepts such as demand and supply analysis, production and cost functions, market structures, and pricing strategies. Students learn how firms respond to changes in economic variables and market conditions, enabling them to make informed managerial decisions. Through case studies and real-world examples, the course also addresses topics like profit maximization, strategic behavior, risk analysis, and the impact of government policies on business operations.
Recommended Textbook Fundamentals of Economics 6th Edition by William Boyes
Available Study Resources on Quizplus
18 Chapters
2262 Verified Questions
2262 Flashcards
Source URL: https://quizplus.com/study-set/1437
Page 2
Chapter 1: Economics and the World Around You
Available Study Resources on Quizplus for this Chatper
110 Verified Questions
110 Flashcards
Source URL: https://quizplus.com/quiz/28532
Sample Questions
Q1) To an economist, scarcity means that
A) it is very time-consuming to find a good.
B) at a zero price, the available quantity of a good is insufficient to meet people's wants.
C) a good is unavailable.
D) at the current market price, the amount available is less than the amount that people want and are willing to pay for.
E) resources are unlimited but people's desires are limited.
Answer: B
Q2) According to Table 1.1, which of the following is true?
A) Ohio should specialize in the production of cookies and trade with Iowa.
B) Iowa should specialize in the production of cookies and trade with Ohio.
C) Ohio should specialize in the production of chili and trade with Iowa.
D) Neither state can benefit from trade.
E) None of these
Answer: A
Q3) Diamonds are more expensive than water because diamonds are a necessity of life.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above.
Page 3
Chapter 2: Markets and the Market Process
Available Study Resources on Quizplus for this Chatper
174 Verified Questions
174 Flashcards
Source URL: https://quizplus.com/quiz/28533
Sample Questions
Q1) A table or list of the prices and the corresponding quantities demanded of a particular good is called a
A) demand curve.
B) demand schedule.
C) supply curve.
D) supply schedule.
E) production possibilities schedule.
Answer: B
Q2) More television sets are being sold today than one year ago, and the selling price has increased. This could have been caused by a(n)
A) decrease in supply.
B) increase in demand.
C) decrease in demand.
D) increase in supply.
E) exception to the law of demand.
Answer: B
Q3) Inefficient firms tend to flourish in a market system.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Applications of Demand and Supply
Available Study Resources on Quizplus for this Chatper
97 Verified Questions
97 Flashcards
Source URL: https://quizplus.com/quiz/28534
Sample Questions
Q1) One of the guiding principles of economics is that people try to make themselves as well off as possible.
A)True
B)False
Answer: True
Q2) In Table 3.3, if the price is $3, a ____ of ____ units will occur.
A) shortage; 15
B) shortage; 12 C) surplus; 12
D) surplus; 15
E) surplus; 45
Answer: D
Q3) A quota is a tax on an imported good.
A)True
B)False
Answer: False
Q4) A minimum wage is a price floor.
A)True
B)False
Answer: True
Page 5
To view all questions and flashcards with answers, click on the resource link above.
Chapter 4: The Firm and the Consumer
Available Study Resources on Quizplus for this Chatper
122 Verified Questions
122 Flashcards
Source URL: https://quizplus.com/quiz/28535
Sample Questions
Q1) If a product has an inelastic demand, then
A) there is probably a long time period under consideration.
B) as price increases, total revenue to producers decreases.
C) an increase in the price will decrease total consumer expenditures.
D) there are probably lots of substitutes.
E) there are probably few substitutes.
Q2) When the marginal-revenue curve is falling, the average-revenue curve is also falling.
A)True
B)False
Q3) If a change in price causes no response at all in the quantity of the product demanded, then demand for the product is
A) elastic.
B) infinitely elastic.
C) relatively inelastic.
D) perfectly inelastic.
E) unit elastic.
Q4) Firms practice price discrimination in order to increase revenue.
A)True
B)False
Page 6
To view all questions and flashcards with answers, click on the resource link above.
Chapter 5: Costs and Profit Maximization
Available Study Resources on Quizplus for this Chatper
119 Verified Questions
119 Flashcards
Source URL: https://quizplus.com/quiz/28536
Sample Questions
Q1) Which of the following is not a variable cost at the sandwich shop?
A) Cost of tomatoes
B) Cost of labor
C) Cost of rent
D) Cost of electricity
E) Cost of bread
Q2) In the long run,
A) some resources are variable and some resources are fixed.
B) firms can enter or exit the industry.
C) all resources are fixed.
D) at least one resource is fixed.
E) all costs are considered by the accountant.
Q3) When Ford Motor Company reports that it earned a loss of $100 million for the fourth quarter of 2007, the firm is
A) reporting economic profit.
B) reporting normal profit.
C) earning a negative economic profit of more than $100 million.
D) earning positive economic profit.
E) earning normal accounting profit.
To view all questions and flashcards with answers, click on the resource link above.
Page 7
Chapter 6: Competition
Available Study Resources on Quizplus for this Chatper
152 Verified Questions
152 Flashcards
Source URL: https://quizplus.com/quiz/28537
Sample Questions
Q1) In monopolistic competition, because of product differentiation the firm can make a profit in the long-run.
A)True
B)False
Q2) Monopolistically and perfectly competitive firms are similar in that, in both markets, firms have long-run economic profits equal to zero.
A)True
B)False
Q3) A product is turned into a commodity when
A) there is only one seller of a product
B) there is no more incentive for new businesses to enter
C) there is product differentiation
D) economic profits can be earned
E) consumers perceive the product to be differentiated
Q4) In the long run, all resources are fixed.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
8
Chapter 7: Business, Society, and the Government
Available Study Resources on Quizplus for this Chatper
157 Verified Questions
157 Flashcards
Source URL: https://quizplus.com/quiz/28538
Sample Questions
Q1) Government policy toward big business involves two areas: antitrust and regulation.
A)True
B)False
Q2) If firms are forced to internalize a negative externality, market price would increase and equilibrium quantity would decrease.
A)True
B)False
Q3) When 95% of the students in your economics receive a flu shot, the remaining 5% have less chance of getting sick with the flu. This is an example of a(n)
A) positive externality
B) negative externality
C) common good
D) adverse selection
E) moral hazard
Q4) Consumer surplus is the difference between total expenditures and what consumers have to pay per unit.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Government Intervention Versus Free Markets
Available Study Resources on Quizplus for this Chatper
103 Verified Questions
103 Flashcards
Source URL: https://quizplus.com/quiz/28539
Sample Questions
Q1) If the interest rate decreased, we would expect the supply of renewable resources to ____ and the supply of nonrenewable resources to ____.
A) decrease; decrease
B) decrease; increase
C) increase; decrease
D) increase; increase
E) decrease; remain unchanged
Q2) Which of the following statements about the senior citizen population in the United States is true?
A) The highest expenditures on health care per capita occur with the older segment of the population.
B) The elderly make up a smaller percentage of the total population than 20 years ago.
C) Senior citizens do not hold much clout with legislators.
D) Senior citizens, as a group, have shorter lifespans than in previous decades.
E) The elderly consume one-half as much health care per capita as the rest of the population.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 9: An Overview of the National and International Economies
Available Study Resources on Quizplus for this Chatper
137 Verified Questions
137 Flashcards
Source URL: https://quizplus.com/quiz/28540
Sample Questions
Q1) The stereotypical household of husband, wife, and two children accounts for ____ of all households in the United States.
A) less than 15%
B) 16-20%
C) 21-25%
D) 26-40%
E) more than 40%
Q2) The Federal Reserve
A) prepares and analyzes the federal budget.
B) investigates unfair international trade practices.
C) administers federal policy regulating industry.
D) administers the financial affairs of the federal government.
E) regulates the U.S. money supply.
Q3) Households supply their resources in the factor markets in exchange for money, which is subsequently spent in the product markets.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 11
Chapter 10: Macroeconomic Measures
Available Study Resources on Quizplus for this Chatper
111 Verified Questions
111 Flashcards
Source URL: https://quizplus.com/quiz/28541
Sample Questions
Q1) The balance of payments always balances, so the sum of the surplus accounts and sum of deficit accounts must always be equal.
A)True
B)False
Q2) A country that is a net creditor
A) shows a deficit in its current account.
B) receives more tax revenue from its citizens than it returns in transfer payments.
C) lends more funds to foreigners than it borrows.
D) shows a surplus in its financial account.
E) sells more bonds to the rest of the world than it buys from the rest of the world.
Q3) If the prices of all goods and services never changed, nominal and real GDP would always be the same.
A)True
B)False
Q4) When imports exceed exports, the balance of trade shows a surplus.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Unemployment, Inflation, and Business Cycles
Available Study Resources on Quizplus for this Chatper
134 Verified Questions
134 Flashcards
Source URL: https://quizplus.com/quiz/28542
Sample Questions
Q1) The inflation rate is greater than the nominal interest rate, so the real interest rate is less than zero.
A)True
B)False
Q2) In Table 11.3, what was the purchasing power of the dollar in 2005 relative to the base year 2002 (rounded to two decimal places)?
A) $.09
B) $.91
C) $.93
D) $1.09
E) None of these numbers is correct.
Q3) Frictional unemployment most likely arises due to
A) conflicts between union and labor.
B) a labor force where people elect to change jobs.
C) business cycles.
D) technological changes.
E) seasonal adjustments in demand.
Q4) Creditors are likely to benefit from unexpected inflation.
A)True B)False
Page 13
To view all questions and flashcards with answers, click on the resource link above.
Chapter 12: Macroeconomic Equilibrium: Aggregate
Demand and Supply
Available Study Resources on Quizplus for this Chatper
117 Verified Questions
117 Flashcards
Source URL: https://quizplus.com/quiz/28543
Sample Questions
Q1) The wealth effect refers to the fact that wealthier individuals tend to spend more on foreign goods.
A)True
B)False
Q2) The aggregate demand curve
A) shows total spending in which the economy will engage at alternative price levels.
B) implies an inverse relationship between inflation and unemployment.
C) is identical to the aggregate expenditures curve.
D) has the same slope as a demand curve.
E) relates relative prices to the quantity demanded of a particular good.
Q3) Refer to Table 12.3. Assume that labor is a major production cost. In year 2, employers would like to hire
A) more labor because profits are falling.
B) more labor because profits are rising.
C) less labor because profits are falling.
D) less labor because profits are rising.
E) the same amount of labor as in year 1.
To view all questions and flashcards with answers, click on the resource link above.
Page 14
Chapter 13: Fiscal Policy
Available Study Resources on Quizplus for this Chatper
141 Verified Questions
141 Flashcards
Source URL: https://quizplus.com/quiz/28544
Sample Questions
Q1) Compared to China, the United States spends a smaller percentage of its budget on social programs such as education, health, social security, and welfare.
A)True
B)False
Q2) Fiscal policy is an important tool used by the government to attain the path of economic growth.
A)True B)False
Q3) Once Congress receives the president's budget, the ____ studies it and committees modify it before funds are appropriated.
A) Congressional Budget Office
B) Congressional Committee on Presidential Affairs
C) Congressional Committee for Mutual Understanding
D) Office of Management and Budget
E) Accounting and Balancing Office
Q4) Foreign holdings of U.S. government securities act as a deterrent to U.S. economic growth.
A)True B)False
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Money and Banking
Available Study Resources on Quizplus for this Chatper
116 Verified Questions
116 Flashcards
Source URL: https://quizplus.com/quiz/28545
Sample Questions
Q1) A depository institution's profit is derived from the difference between the A) interest rate it receives on loans and the rate it receives on investments in government securities.
B) interest rate it pays on deposits and the rate it receives on loans.
C) difference between its total reserves and its required reserves.
D) difference between its assets and its liabilities.
E) interest rate it receives on domestic loans and the rate it receives on foreign loans.
Q2) Bank runs in the United States are unlikely because
A) the Federal Deposit Insurance Corporation insures commercial bank deposits.
B) depository institutions operate on a partial-reserve basis.
C) bank failures have been nonexistent since 1932.
D) today's financial institutions cannot lose money.
E) the banking deregulation act of 1980 has prohibited bank failures by law.
Q3) For a bank to grow, it should focus on a(n) ____ scale.
A) local
B) state-wide
C) national
D) international
E) unit
To view all questions and flashcards with answers, click on the resource link above.
Page 16
Chapter 15: Monetary Policy
Available Study Resources on Quizplus for this Chatper
125 Verified Questions
125 Flashcards
Source URL: https://quizplus.com/quiz/28546
Sample Questions
Q1) Other things being equal, the purchase of government bonds by the Federal Reserve will cause a(n)
A) increase in the reserve holdings of banks.
B) increase in interest rates.
C) decrease in the money supply.
D) decrease in commercial bank loans.
E) reduction in nominal GDP.
Q2) An excess demand for money leads to a rise in the equilibrium interest rate.
A)True
B)False
Q3) The Fed's ultimate goal is to grow GDP and have a low, steady rate of inflation, but it also aims to control intermediate targets like the growth of the money supply.
A)True B)False
Q4) Small banks hold a greater percentage of deposits in reserve than large banks do. A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Chapter 16: Macroeconomic Policy, Business Cycles, and Growth
Available Study Resources on Quizplus for this Chatper
135 Verified Questions
135 Flashcards
Source URL: https://quizplus.com/quiz/28547
Sample Questions
Q1) Suppose that the economy grows by 4 percent, total factor productivity grows by 3 percent, and the labor force increases by 6 percent. If labor and capital are the only inputs and labor contributes 40 percent to GDP, then the stock of capital must have
A) fallen by 5 percent.
B) fallen by 3 percent.
C) fallen by 2 1/3 percent.
D) risen by 3 percent.
E) risen by 7 percent.
Q2) If the government fiscal deficit equals $190 million, government borrowing equals $60 million, what is the change in the money supply equal to?
A) $250 million
B) $190 million
C) $130 million
D) $120 million
E) $60 million
Q3) An increase in the long-run aggregate supply curve reflects economic growth.
A)True B)False
To view all questions and flashcards with answers, click on the resource link above. Page 18
Chapter 17: Issues in International Trade and Finance
Available Study Resources on Quizplus for this Chatper
126 Verified Questions
126 Flashcards
Source URL: https://quizplus.com/quiz/28548
Sample Questions
Q1) A quantity quota is a limit on the
A) number of foreign workers allowed to work in the country.
B) number of ships, airplanes, or trains allowed to enter the country.
C) amount of low-priced, low-value foreign goods allowed into the country.
D) physical amount of a good that may be imported or exported.
E) monetary value of a good that may be imported or exported.
Q2) International trade on the basis of comparative advantage maximizes
A) domestic output and allows consumers access to better-quality products at lower prices than would be available in the domestic market alone.
B) foreign output and allows consumers access to better-quality products at lower prices than would be available in the domestic market alone.
C) world output and allows consumers access to better-quality products at lower prices than would be available in the domestic market alone.
D) world output, but gives consumers access to lower-quality products at higher prices than would be available in the domestic market alone.
E) foreign output and product quality in all markets.
To view all questions and flashcards with answers, click on the resource link above. Page 19
Chapter 18: Globalization
Available Study Resources on Quizplus for this Chatper
86 Verified Questions
86 Flashcards
Source URL: https://quizplus.com/quiz/28549
Sample Questions
Q1) Another name for the Asian tiger countries is NICs.
A)True
B)False
Q2) In the second half of the twentieth century, technological change greatly reduced ____ costs, which enhanced globalization.
A) financing
B) exchange rate
C) communication
D) derivation
E) portfolio
Q3) In addition to economic dimensions, globalization has ____ and ____ dimensions.
A) chemical; biological
B) accounting; intuitive
C) clerical; art history
D) friendly; unfriendly
E) political; social
Q4) Most intelligent people agree that there are no negative side effects associated with globalization.
A)True
B)False
Page 20
To view all questions and flashcards with answers, click on the resource link above.