Business Economics
Exam Questions
Course Introduction
Business Economics explores the application of economic principles and methodologies to decision-making processes within business organizations. The course examines how both microeconomic and macroeconomic factors influence business strategies, resource allocation, production, pricing, market structures, and competitive dynamics. Students will learn to analyze economic environments, interpret market trends, assess risks, and apply quantitative tools to real-world business scenarios, enabling informed managerial and strategic decisions in an ever-changing economic landscape.
Recommended Textbook
Microeconomics 10th Edition by William Boyes
Available Study Resources on Quizplus
22 Chapters
2295 Verified Questions
2295 Flashcards
Source URL: https://quizplus.com/study-set/3617 Page 2
Chapter 1: The Wealth of Nations: Ownership and Economic
Available Study Resources on Quizplus for this Chatper
87 Verified Questions
87 Flashcards
Source URL: https://quizplus.com/quiz/71803
Sample Questions
Q1) Scarcity:
A)ensures that people become satisfied with less than what they want.
B)exists only during a recession.
C)exists only in some countries.
D)affects only poor people.
E)requires people to make choices to satisfy their wants.
Answer: E
Q2) Which of the following statements is false?
A)Economists look at the factors that lead an individual to decide that a particular idea is in his or her best interest.
B)Economists do not ask whether a particular decision is in the individual's best interest.
C)Choices must be made because of scarcity.
D)A particular choice is made by an individual because that choice provides the greatest satisfaction.
E)None of these statements is false, they are all true.
Answer: E
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Scarcity and Opportunity Costs
Available Study Resources on Quizplus for this Chatper
87 Verified Questions
87 Flashcards
Source URL: https://quizplus.com/quiz/71804
Sample Questions
Q1) Refer to Figure 2.2. If there is an increase in the effectiveness of pesticides, which of the following graph(s) will represent(s) the resulting shift in the production possibilities curve [PPC]?
A)Graph A
B)Graph B
C)Graph C
D)Graph A and B
E)Graph B and C
Answer: B
Q2) Which of the following is an assumption made while constructing a production possibilities frontier [PPF]?
A)Dynamic technological know-how
B)Flexible resource quality
C)Fixed resource quantity
D)Full and efficient use of resources
E)Flexible money supply
Answer: D
To view all questions and flashcards with answers, click on the resource link above.
Page 4
Chapter 3: Markets and the Price System
Available Study Resources on Quizplus for this Chatper
96 Verified Questions
96 Flashcards
Source URL: https://quizplus.com/quiz/71805
Sample Questions
Q1) Which of the following determines the quantity demanded of a commodity?
A)The income levels of consumers
B)The price of the commodity
C)The prices of related commodities
D)The number of buyers
E)Consumers' expectations
Answer: B
Q2) A price floor does not benefit producers.
A)True
B)False
Answer: False
Q3) If an increase in the price of good X causes the demand curve for product Y to shift to the right, then X and Y are most likely to be which of the following?
A)Shoes and laces
B)Tennis balls and tennis rackets
C)Turkey and chicken
D)Knives and forks
E)DVD players and DVDs
Answer: C
To view all questions and flashcards with answers, click on the resource link above.
Page 5
Chapter 4: The Aggregate Economy
Available Study Resources on Quizplus for this Chatper
61 Verified Questions
61 Flashcards
Source URL: https://quizplus.com/quiz/71806
Sample Questions
Q1) According to the World Bank, developing countries greatly outnumber industrial countries.
A)True
B)False
Q2) Which of the following statements is a defining feature of a corporation?
A)The owners of a corporation face unlimited liability on debts.
B)A corporation owns and operates units only in foreign countries.
C)A corporation is created by a verbal agreement.
D)A corporation that is based on a verbal agreement is also recognized by State law.
E)A corporation has a legal identity that is separate from that of its owners.
Q3) In a market economy, _____ own(s) all the basic resources or factors of production.
A)households
B)the federal government
C)the Federal Reserve bank
D)the local government
E)business firms
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Using Economics to Understand the World
Around You
Available Study Resources on Quizplus for this Chatper
68 Verified Questions
68 Flashcards
Source URL: https://quizplus.com/quiz/71807
Sample Questions
Q1) When people make choices that (at the time and with the information they have at their disposal) give them the greatest amount of satisfaction, they are said to be:
A)behaving irrationally.
B)applying econometric models to their everyday behavior.
C)living under a communist dictator.
D)acting in their own self-interest.
E)showing no willingness to plan for the future.
Q2) Which of the following statements is true?
A)The intention of a minimum wage is to raise the wage rate for the skilled workers.
B)The lowest of the federal or state minimum wage levels prevails in each state.
C)The federal minimum wage, in the United States, is followed by all the states as their minimum wage.
D)The minimum wage has the greatest impact on the unskilled labor market.
E)The minimum wage has the greatest impact on the skilled labor market.
Q3) One of the assumptions of an economic analysis is that market functions are controlled by the government.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Elasticity: Demand and Supply
Available Study Resources on Quizplus for this Chatper
133 Verified Questions
133 Flashcards
Source URL: https://quizplus.com/quiz/71808
Sample Questions
Q1) Goods whose income elasticity of demand is greater than zero are _____.
A)inferior goods
B)normal goods
C)substitute goods
D)superior goods
E)public goods
Q2) If a product has an elastic demand, it means that:
A)consumers are relatively sensitive to a change in the price of the product.
B)consumers are relatively insensitive to a change in the quantity demanded of the product.
C)consumers are relatively insensitive to a change in the price of the product.
D)producers are relatively insensitive to a change in the price of the product.
E)producers are relatively sensitive to a change in the quantity demanded of the product.
Q3) If the demand for a good is perfectly inelastic, then:
A)the value of price elasticity of demand of the good is equal to 1.
B)the value of price elasticity of demand of the good is equal to -1.
C)the demand curve of the good is nonexistent.
D)consumers are very responsive to a change in the price of the good.
E)quantity demanded does not change when price of the good changes.
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Demand: Consumer Choice
Available Study Resources on Quizplus for this Chatper
142 Verified Questions
142 Flashcards
Source URL: https://quizplus.com/quiz/71809
Sample Questions
Q1) According to the concept of framing, when a customer calls a hotel regarding a reservation the hotel reservationists generally state room rates as the _____.
A)lowest they charge during peak demand periods
B)average they charge during peak demand periods
C)highest they charge during peak demand periods and then discount those rates
D)lowest they charge during off-peak demand periods
E)highest they charge during off-peak demand periods and then discount those rates
Q2) According to Table 7.2, the marginal utility of the third avocado is _____ utils.
A)12
B)8
C)48
D)18
E)4
Q3) According to neuroeconomists, our logical brain knows we should spend as much as possible when we have money.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Supply: the Costs of Doing Business
Available Study Resources on Quizplus for this Chatper
105 Verified Questions
105 Flashcards
Source URL: https://quizplus.com/quiz/71810
Sample Questions
Q1) Using Figure 8.1 determine the average total cost of producing the first unit of the output.
A)$10
B)$20
C)$30
D)$40
E)$50
Q2) When a firm is experiencing economies of scale, it will:
A)underuse a larger plant size than is indicated by short-run efficiency concerns.
B)underuse a smaller plant than is indicated by short-run efficiency concerns.
C)overuse a larger plant size than is indicated by short-run efficiency concerns.
D)overuse a smaller plant size than is indicated by short-run efficiency concerns.
E)produce at the minimum short-run and long-run average costs.
Q3) Overhead costs are identical to fixed costs.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Chapter 9: Profit Maximization
Available Study Resources on Quizplus for this Chatper
121 Verified Questions
121 Flashcards
Source URL: https://quizplus.com/quiz/71811
Sample Questions
Q1) A positive economic profit signals that the investors of a firm should divert their funds to alternative ventures.
A)True
B)False
Q2) According to the information in Scenario 9.2, how much economic profit did the firm make last year?
A)$112 million
B)$30 million
C)$20 million
D)-$20 million
E)$2 million
Q3) Refer to Figure 9.3. The firm suffers a negative profit by producing:
A)100 units.
B)50 units.
C)80 units.
D)150 units.
E)250 units.
Q4) The daily vegetable market is an example of an oligopoly market structure. A)True B)False
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Perfect Competition
Available Study Resources on Quizplus for this Chatper
135 Verified Questions
135 Flashcards
Source URL: https://quizplus.com/quiz/71812
Sample Questions
Q1) Perfect competition describes a firm's behavior in a market model where:
A)there are few firms producing identical products.
B)there are few firms producing highly differentiated products.
C)there are many firms producing identical products.
D)there are many firms producing highly differentiated products.
E)there are barriers to entry and exit for the new firms.
Q2) If the price of the output produced by a perfectly competitive firm increases, then:
A)the marginal-cost curve will shift up.
B)the demand curve faced by the firm will shift to the left.
C)marginal cost will fall as output declines.
D)the marginal-revenue curve for the firm will shift up.
E)the marginal-cost curve for the firm will shift down.
Q3) To maximize profits in the short run, a perfectly competitive firm will produce the output at which:
A)marginal revenue equals demand.
B)price equals marginal revenue.
C)price equals marginal cost.
D)marginal revenue equals average total cost.
E)total revenue equals total cost.
To view all questions and flashcards with answers, click on the resource link above.
Page 12
Chapter 11: Monopoly
Available Study Resources on Quizplus for this Chatper
118 Verified Questions
118 Flashcards
Source URL: https://quizplus.com/quiz/71813
Sample Questions
Q1) The only types of firms that cannot theoretically practice price discrimination are perfectly competitive firms.
A)True
B)False
Q2) When Glaxo-Wellcome introduced AZT, an AIDS drug, it was able to enjoy high profits because:
A)the drug was highly recommended by doctors.
B)of the quick response of rivals in introducing substitute drugs.
C)of barriers to entry provided by patents.
D)of its competitive price in the pharmaceutical industry.
E)it experienced constant returns to scale in the long run.
Q3) Why is there a supply point and not a supply curve for a monopolist?
A)A monopolist cannot affect the market price by changing its supply.
B)A monopolist produces a homogeneous product having similar substitutes.
C)A monopolist equates the price which it charges with its marginal cost.
D)There is only one quantity and price at which a monopolist operates.
E)A monopolist supplies to a large number of consumers.
Q4) A monopolist always produces on the elastic portion of the demand curve.
A)True B)False
Page 13
To view all questions and flashcards with answers, click on the resource link above.
Chapter 12: Monopolistic Competition and Oligopoly
Available Study Resources on Quizplus for this Chatper
114 Verified Questions
114 Flashcards
Source URL: https://quizplus.com/quiz/71814
Sample Questions
Q1) Firms in monopolistically competitive markets spend significant sums on product differentiation because:
A)it enables them to earn positive profits in the short run.
B)it increases the elasticity of demand for a firm's product.
C)it reduces the number of competitors.
D)it causes the firm's supply curve to become horizontal so the firm can expand output indefinitely.
E)it causes the firm's demand curve to become horizontal so that it can charge a fixed price for its product.
Q2) An oligopoly market consists of:
A)many firms which produce a standardized product.
B)at least five firms one of which dominates the market.
C)firms that make independent pricing and output decisions.
D)a group of firms that dominate the market.
E)firms which face perfectly elastic demand curves.
Q3) Firms develop brand names in order to make the demand for their product more elastic.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 14
Chapter 13: Markets and Government
Available Study Resources on Quizplus for this Chatper
113 Verified Questions
113 Flashcards
Source URL: https://quizplus.com/quiz/71815
Sample Questions
Q1) When a good commodity is driven out of the market by a bad commodity, the result is called:
A)moral hazard.
B)adverse selection.
C)positive externality.
D)negative externality.
E)the commons problem.
Q2) The free rider problem occurs because:
A)it is easy to exclude others from consuming a good.
B)consumption is rivalrous, so the consumption of a product by one individual diminishes the amount available for others.
C)exclusion is costly or impossible, so a consumer or producer can use a good without having to pay for it.
D)external costs are imposed on others not directly involved in the transaction.
E)individuals are not required to pay for those goods which do not yield any utility to them.
Q3) The social cost is negative in case of a negative externality.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Antitrust and Regulation
Available Study Resources on Quizplus for this Chatper
88 Verified Questions
88 Flashcards
Source URL: https://quizplus.com/quiz/71816
Sample Questions
Q1) Under the second phase of antitrust policy that began in 1914 in the U.S., the courts used _____ in order to judge the firms' actions.
A)a rule of reason
B)the rule of 72
C)a rule of thirds
D)a per se rule
E)the rule of law
Q2) When a monopoly is regulated it is required to sell lower output at a lower price.
A)True
B)False
Q3) Consider a market consisting of seven firms with market shares of 40, 20, 10, 10, 8, 7, and 5 percent, respectively. Which of the following statements is true?
A)The four-firm concentration ratio would be 0.03.
B)The Herfindahl index would be 1,000.
C)The Herfindahl index would be 2,228.
D)The Herfindahl index would be 1,500.
E)The Herfindahl index would be 2,338.
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: Resource Markets
Available Study Resources on Quizplus for this Chatper
110 Verified Questions
110 Flashcards
Source URL: https://quizplus.com/quiz/71817
Sample Questions
Q1) Suppose the output of a firm hiring workers in a competitive labor market increases by three units when an additional worker is hired. This firm will hire more laborers if the market price of its product is $4 and the wage rate is $9. [Hint: Marginal revenue product of a resource is equal to the product of marginal product of the resource and the marginal revenue of the firm.]
A)True
B)False
Q2) After hiring 151 units of the variable input (say labor) a firm determines the marginal fixed cost (MFC) to be $0.33 and the marginal revenue product (MRP) to be $0.30. The firm should:
A)increase its production.
B)increase the use of labor.
C)decrease the use of labor.
D)produce 151 units.
E)produce 33 units of the output.
Q3) The resource market comprises of households and firms where the firms sell their resources to the households.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 17
Chapter 16: The Labor Market
Available Study Resources on Quizplus for this Chatper
116 Verified Questions
116 Flashcards
Source URL: https://quizplus.com/quiz/71818
Sample Questions
Q1) Refer to Figure 16.3. If the wage rates in market A and market B were set at $20, then:
A)both the markets would be in equilibrium.
B)there would be a shortage of workers in market A and a surplus of workers in market B.
C)there would be a shortage of workers in market B and a surplus of workers in market A.
D)there would be a surplus of workers in both markets.
E)there would be a shortage of workers in both markets.
Q2) The idea of comparable worth implies that wages are to be determined by the job characteristics and not merely by the interaction of demand and supply.
A)True
B)False
Q3) All taxes distort market decisions, affecting the buying and selling of goods and services.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 18
Chapter 17: The Capital Market
Available Study Resources on Quizplus for this Chatper
110 Verified Questions
110 Flashcards
Source URL: https://quizplus.com/quiz/71819
Sample Questions
Q1) The product of the stock price and the total outstanding shares of that stock is referred to as:
A)market capitalization.
B)floating capital.
C)book value.
D)financial value.
E)face value.
Q2) Dividend yield is:
A)the annual dividend payment per share.
B)the annual dividend per share divided by the price of each share.
C)the current stock price divided by the dividend per share.
D)the year-on-year change in the annual dividend payment.
E)the dollar value change in the stock price from the previous day's closing price.
Q3) A decline in the interest rate will lead to an increase in the price of capital, supply of capital remaining constant.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 19
Chapter 18: The Land Market and Natural Resources
Available Study Resources on Quizplus for this Chatper
55 Verified Questions
55 Flashcards
Source URL: https://quizplus.com/quiz/71820
Sample Questions
Q1) Common ownership may fail to ensure that harvesting of renewable resources does not exceed the maximum sustainable yield.
A)True
B)False
Q2) Which of the following is a nonrenewable source of energy?
A)Corn
B)Ethanol
C)Petroleum
D)Bagasse
E)Biomass
Q3) The markets for renewable and nonrenewable resources operate to ensure that:
A)the producers using these resources earn above-normal profits even in the long run.
B)the current and future prices of such resources remain high.
C)the cost of extraction of such resources increases with an increase in price.
D)the current price of such resources should remain low but the future prices should increase to increase profitability of the producers.
E)the current and future wants for these resources are satisfied in the least costly manner.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 19: Current Issues: Income, Income Distribution,
Poverty, and Government Policy
Available Study Resources on Quizplus for this Chatper
85 Verified Questions
85 Flashcards
Source URL: https://quizplus.com/quiz/71821
Sample Questions
Q1) For an economy, the greater the value of the Gini co-efficient, _____.
A)the greater will be the GDP.
B)the greater will be the income inequality
C)the greater will be the revenue of the government from direct taxes
D)the greater will be the equality in the distribution of income and wealth
E)the lesser will be the expenditure on the part of the government
Q2) Which of the following is true of transfer programs?
A)They involve redistributing income from lower-income individuals to higher-income individuals.
B)They place a high implicit tax on work.
C)They increase the opportunity cost of leisure.
D)They indirectly help in decreasing the unemployment rate in an economy.
E)They result in an increased productivity of labor and a rise in the total output of an economy.
Q3) Individuals have a tradeoff between leisure and work. When income from working is taxed, the cost of leisure is reduced in relative terms.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 21
Chapter 20: World Trade Equilibrium
Available Study Resources on Quizplus for this Chatper
112 Verified Questions
112 Flashcards
Source URL: https://quizplus.com/quiz/71822
Sample Questions
Q1) What is known as the Dutch disease?
A)The problem that arises when a government cannot meet its foreign debts
B)The phenomenon of a boom in one industry causing declines in the rest of the economy
C)A sudden and unexpected devaluation of a currency as a consequence of policy controls
D)The problem that arises when high imports force an economy to borrow from external sources
E)A deficit in the balance of payments of the economy that arises due to a sudden appreciation of the domestic currency
Q2) A country benefits from trade if it is able to obtain a good from a foreign country by giving up more of other goods than it would have to give up to obtain the good at home.
A)True
B)False
Q3) If the international price of oranges is less than the domestic price of oranges in Spain, then Spain will export oranges to other countries.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
22
Chapter 21: International Trade Restrictions
Available Study Resources on Quizplus for this Chatper
109 Verified Questions
109 Flashcards
Source URL: https://quizplus.com/quiz/71823
Sample Questions
Q1) In Figure 21.2, if the world price per bushel of wheat is $25, how much wheat will be imported?
A)450 bushels
B)350 bushels
C)200 bushels
D)150 bushels
E)300 bushels
Q2) If international trade is restricted by the government of a country:
A)the domestic consumers are benefited.
B)the domestic producers are adversely affected.
C)the domestic consumers pay higher prices for imported goods.
D)the resources are equally distributed among domestic and foreign producers.
E)the resources are allocated to their highest paid uses.
Q3) Which of the following would result from a tariff?
A)An increase in government budget deficit
B)An increase in domestic production
C)A greater volume of international trade
D)Increased domestic consumption
E)Decrease in prices of the imported goods
To view all questions and flashcards with answers, click on the resource link above.
Page 23
Chapter 22: Exchange Rates and Financial Links Between Countries
Available Study Resources on Quizplus for this Chatper
130 Verified Questions
130 Flashcards
Source URL: https://quizplus.com/quiz/71824
Sample Questions
Q1) If the euro per dollar exchange rate changes from $1 = 0.8 euros to $1 = 0.7 euros, it implies that the euro has depreciated against the dollar.
A)True
B)False
Q2) Assume that a British investor buys a one-year U.S. Treasury bill that pays 6 percent annual interest. Given a yield of 4 percent on a comparable British Treasury bill, the U.S. dollar must depreciate 2 percent against the British pound during the year for interest rate parity to hold.
A)True
B)False
Q3) Purchasing power parity exists when domestic currency:
A)maintains a fixed exchange rate with foreign currency.
B)is not convertible into foreign currency.
C)buys more goods at home than abroad.
D)buys as many goods at home as it does abroad.
E)appreciates in value against foreign currency.
Q4) Fixed exchange rates serve as a constraint on inflationary government policies.
A)True
B)False
Page 24
To view all questions and flashcards with answers, click on the resource link above.