Business Economics
Practice Exam
Course Introduction
Business Economics provides students with an understanding of how economic principles and tools are applied to business decision-making. The course covers fundamental microeconomic and macroeconomic concepts, including supply and demand analysis, market structures, pricing strategies, production and cost functions, and the impact of government policies on business. Students will learn to analyze real-world business scenarios, evaluate market trends, and make informed decisions in conditions of uncertainty. The course emphasizes the practical application of economics in areas such as resource allocation, profit maximization, and competitive strategy within both local and global business environments.
Recommended Textbook
ECON Micro 2 2nd Edition by William
A. McEachern
Available Study Resources on Quizplus
21 Chapters
3947 Verified Questions
3947 Flashcards
Source URL: https://quizplus.com/study-set/3704
Page 2
Chapter 1: The Art and Science of Economic Analysis
Available Study Resources on Quizplus for this Chatper
148 Verified Questions
148 Flashcards
Source URL: https://quizplus.com/quiz/73746
Sample Questions
Q1) Which of the following is true about entrepreneurs?
A) They have the talent required to dream up a new product or find a better way to produce an existing one.
B) They are rewarded by profits.
C) They sometimes suffer losses.
D) They benefit from what's left over after paying other resource suppliers.
E) All of the answers are correct.
Answer: E
Q2) Because people's wants are unlimited but resources are scarce,
A) only the rich get everything they want
B) choices must be made
C) there will be more services produced than goods
D) people search for spiritual fulfillment rather than material fulfillment
E) poor people never get anything they want
Answer: B
Q3) Profit is the payment made for land resources.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above.
Page 3
Chapter 2: Economic Tools and Economics Systems
Available Study Resources on Quizplus for this Chatper
185 Verified Questions
185 Flashcards
Source URL: https://quizplus.com/quiz/73747
Sample Questions
Q1) According to Exhibit 2-1,Hans and Maria would be better off if
A) Hans specialized in typing and Maria in doing laundry
B) Hans specialized in doing laundry and Maria in typing
C) each did their own laundry and typing
D) Maria did all of the typing and all of the laundry
E) Hans did all of the typing and all of the laundry
Answer: A
Q2) If Daniel produces one pair of shoes in 4 hours and Sarah produces one pair of shoes in 3 hours,then
A) Sarah has a comparative advantage in shoemaking
B) Daniel has a comparative advantage in shoemaking
C) Sarah has an absolute and a comparative advantage in shoemaking
D) Daniel has an absolute and a comparative advantage in shoemaking
E) Sarah has an absolute advantage in shoemaking
Answer: E
Q3) A point inside the production possibilities curve illustrates a situation in which resources are not fully employed
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Economic Decision Makers
Available Study Resources on Quizplus for this Chatper
196 Verified Questions
196 Flashcards
Source URL: https://quizplus.com/quiz/73748
Sample Questions
Q1) The term "utility" means
A) satisfaction
B) a low-valued good
C) productivity
D) adaptability
E) efficiency
Answer: A
Q2) Which of the following accounts for the largest percentage of spending by households in the United States?
A) durable goods
B) nondurable goods
C) services
D) insurance payments
E) underground activities (e.g. ,illegal activities)
Answer: C
Q3) A major advantage of the corporate form of business organization is the limited personal liability of the owners.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Demand, supply, and Markets
Available Study Resources on Quizplus for this Chatper
222 Verified Questions
222 Flashcards
Source URL: https://quizplus.com/quiz/73749
Sample Questions
Q1) If the price of potato chips increases,other things constant,demand for potato-chip dip will
A) not change;only quantity demanded will change
B) increase because the goods are substitutes
C) decrease because the goods are substitutes
D) decrease because the goods are complements
E) increase because the goods are complements
Q2) The law of demand says that as the price of a good rises,
A) buyers recognize that price may be even higher in the future,and so they buy now
B) buyers purchase less in hopes that the price will fall in the future
C) buyers purchase less,in part because their real income has fallen
D) buyers purchase more,in part because the price of a substitute has risen
E) buyers purchase more,in part because it has higher status at a higher price
Q3) Which of the following statements about markets is not true?
A) A market is an impersonal mechanism.
B) Markets coordinate the independent decisions of buyers and sellers.
C) Markets reduce the transaction costs of exchange.
D) More specialized markets are generally found in urban areas.
E) All markets provide the same amounts of information.
To view all questions and flashcards with answers, click on the resource link above.
Page 6
Chapter 5: Elasticity of Demand and Supply
Available Study Resources on Quizplus for this Chatper
238 Verified Questions
238 Flashcards
Source URL: https://quizplus.com/quiz/73750
Sample Questions
Q1) One group of people uses New York City subways only during rush hour to travel to and from work.Another group uses them only in midday for leisure activity.If New York City wants to increase transit fares with the smallest possible reduction in revenue,for which group should it increase the fare?
A) The rush-hour group because its demand for subway service is more elastic than that of the midday group.
B) The rush-hour group because its demand for subway service is less elastic than that of the midday group.
C) The midday group because its demand for subway service is more elastic than that of the rush-hour group.
D) The midday group because its demand for subway service is less elastic than that of the rush-hour group.
E) It doesn't matter because both groups have the same elasticity of demand.
Q2) If income rises and the demand for toothbrushes stays the same,income elasticity of toothbrushes is said to be unit elastic.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Consumer Choice and Demand
Available Study Resources on Quizplus for this Chatper
164 Verified Questions
164 Flashcards
Source URL: https://quizplus.com/quiz/73751
Sample Questions
Q1) The market demand curve is
A) any individual's demand curve multiplied by the number of consumers in the market
B) the relationship between income and quantity demanded
C) the horizontal sum of the individual demand curves for all consumers in the market
D) the vertical summation of all individual demand curves
E) the sum of prices paid at each quantity demanded
Q2) The law of demand states that
A) quantity demanded is inversely related to price
B) quantity demanded is directly related to income
C) marginal utility is inversely related to quantity consumed
D) total revenue is directly related to price
E) demand curves are linear
Q3) When the price is P in Exhibit 6-11,the shaded area represents
A) a shortage
B) producer surplus
C) a price floor
D) consumer surplus
E) a price ceiling
To view all questions and flashcards with answers, click on the resource link above.
8
Chapter 7: Production and Cost in the Firm
Available Study Resources on Quizplus for this Chatper
202 Verified Questions
202 Flashcards
Source URL: https://quizplus.com/quiz/73752
Sample Questions
Q1) Which of the following reflects diseconomies of scale?
A) Marginal product decreases as output increases.
B) Short-run marginal cost increases as output increases.
C) Long-run marginal cost increases as output increases.
D) Short-run average cost increases as output increases.
E) As output doubles,long-run total cost more than doubles.
Q2) In Exhibit 7-5,what is fixed cost at 15 units of output?
A) $0
B) $10
C) $30
D) it is impossible to calculate fixed cost unless we know the daily wage
E) it is impossible to calculate fixed cost unless we know variable cost at Q = 0
Q3) If total cost at Q = 0 is $100 and total cost at Q = 10 is $500,then average variable cost at Q = 10 is
A) $500
B) $400
C) $50
D) $40
E) $10
To view all questions and flashcards with answers, click on the resource link above.
Page 9
Chapter 8: Perfect Competition
Available Study Resources on Quizplus for this Chatper
250 Verified Questions
250 Flashcards
Source URL: https://quizplus.com/quiz/73753
Sample Questions
Q1) In Exhibit 8-10,price equals
A) $60
B) $24
C) $40
D) $20
E) $32
Q2) In the long run,a perfectly competitive market will exhibit
A) zero producer surplus
B) zero consumer surplus
C) positive economic profit
D) allocative and productive efficiency
E) allocative but not productive efficiency
Q3) Which of the following is not a characteristic of perfect competition?
A) A commodity product
B) A large number of independently acting sellers
C) Freedom of entry
D) The existence of externalities
E) Each firm is a price taker
To view all questions and flashcards with answers, click on the resource link above.
Chapter 9: Amonopoly
Available Study Resources on Quizplus for this Chatper
257 Verified Questions
257 Flashcards
Source URL: https://quizplus.com/quiz/73754
Sample Questions
Q1) A major fruit juice manufacturer failed in its attempt to engage in price discrimination between students and all other consumers.What is a possible explanation for this failure?
A) There was nothing to prevent the students from reselling the fruit juice to other consumers.
B) The fruit juice manufacturer produced in a perfectly competitive market.
C) The two groups of consumers probably have the same demand elasticity for fruit juice.
D) The cost of producing the product is relatively high.
E) Demand for fruit juice is probably inelastic.
Q2) Which of the following would not be considered price discrimination?
A) charging higher rates on long distance calls during normal business hours
B) giving lower air fares to those who buy tickets a month before departure
C) charging lower prices for senior citizens at museums
D) getting separate prices for residential and commercial users of natural gas
E) charging more for BMWs than for Chevrolets
Q3) A monopolist's marginal revenue curve is flatter than its demand curve.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 11
Chapter 10: Monopolistic Competition and Oligopoly
Available Study Resources on Quizplus for this Chatper
219 Verified Questions
219 Flashcards
Source URL: https://quizplus.com/quiz/73755
Sample Questions
Q1) Although both perfectly competitive and monopolistically competitive firms earn normal profits in the long run,monopolistically competitive firms will not
A) operate where price equals marginal cost
B) charge a higher price than firms in perfect competition
C) produce a smaller quantity than firms in perfect competition
D) produce where price equals average total cost
E) exit when demand falls below long-run average costs
Q2) A monopolistically competitive firm is currently producing 20 units of output and charging $30 per unit.The marginal revenue of the 20<sup>th</sup> unit produced is $20 and the marginal cost of producing the 20<sup>th</sup> unit is $18.To maximize profit or minimize loss,the firm should:
A) Charge more and sell more output
B) Charge less and sell more output
C) Charge more and sell less output
D) Charge less and sell less output
E) Charge $30 per unit and sell more output
Q3) In oligopoly,minimum efficient scale is large relative to the market.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 12
Chapter 11: Resource Markets
Available Study Resources on Quizplus for this Chatper
210 Verified Questions
210 Flashcards
Source URL: https://quizplus.com/quiz/73756
Sample Questions
Q1) Gooey Flakes is the only ready-to-eat cereal that has chocolate syrup injected into each flake.The machine that injects the syrup into the flakes can do nothing else.Which of the following is true?
A) All of the machine's earnings are economic rent.
B) All of the machine's earnings are opportunity cost.
C) The supply curve for this machine is horizontal.
D) The demand curve for this machine is horizontal.
E) The demand curve for this machine is vertical.
Q2) The payment made to an owner of a resource in excess of the opportunity cost of the resource is
A) economic rent
B) economic profit
C) wages
D) interest
E) opportunity cost
Q3) The marginal revenue product curve slopes downward only if the firm is a price searcher in the product market.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 13
Chapter 12: Labor Markets and Labor Unions
Available Study Resources on Quizplus for this Chatper
211 Verified Questions
211 Flashcards
Source URL: https://quizplus.com/quiz/73757
Sample Questions
Q1) If the substitution effect dominates the income effect,then an increase in the wage rate will increase the quantity of labor supplied by an individual.
A)True
B)False
Q2) An impartial observer who attempts to settle disagreements by listening to both sides separately and making suggestions is called a(n)
A) collective bargaining agent
B) arbitrageur
C) mediator
D) binding negotiator
E) judge
Q3) The union participation rate in the United States is
A) highest among government employees
B) highest among private sector workers
C) highest in the smokestack industries
D) highest in the service sector
E) higher than in Sweden
To view all questions and flashcards with answers, click on the resource link above.
Page 14
Chapter 13: Capital, interest, and Corporate Finance
Available Study Resources on Quizplus for this Chatper
183 Verified Questions
183 Flashcards
Source URL: https://quizplus.com/quiz/73758
Sample Questions
Q1) Financial intermediaries bring suppliers and demanders together in the market for A) checks
B) loanable funds
C) saving
D) physical capital
E) income
Q2) If a person saves $1,000,how much will she have at the end of three years if the market interest rate is 6 percent?
A) $1,060
B) $1,135
C) $1,156
D) $1,191
E) $1,600
Q3) All types of capital
A) are forms of resources that can be used in future production
B) require a physical existence
C) earn an economic rent
D) yield profits for their owners
E) require obtaining more education and job skills
To view all questions and flashcards with answers, click on the resource link above.
Page 15
Chapter 14: Transaction Costs, imperfect Information, and Market Behavior
Available Study Resources on Quizplus for this Chatper
178 Verified Questions
178 Flashcards
Source URL: https://quizplus.com/quiz/73759
Sample Questions
Q1) One effect of the lemons problem in the used car market is that
A) the market is efficient
B) without reliable information,lemons become increasingly common
C) no good cars are offered on the market
D) no lemons are offered on the market
E) good cars sell at more than their market value
Q2) The winner's curse is more likely
A) when there is only one bidder
B) when demand for the good being auctioned is increasing
C) when the value of the good being auctioned is common knowledge
D) when the value of the good being auctioned is uncertain
E) when the marginal cost of information is low
Q3) The marginal benefit of acquiring additional information tends to
A) be zero if the marginal cost of information is zero
B) increase and then decrease as additional information is obtained
C) be smaller,the smaller the quantity of information the individual already has obtained
D) increase as additional information is obtained
E) decrease as additional information is obtained
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: Economic Regulation and Antitrust Policy
Available Study Resources on Quizplus for this Chatper
170 Verified Questions
170 Flashcards
Source URL: https://quizplus.com/quiz/73760
Sample Questions
Q1) If an industry consists of only four firms with equal market shares,then the Herfindahl index
A) is 25
B) is 10,000
C) is 100
D) is 2,500
E) cannot be calculated without additional information
Q2) The purchase of the assets of one steelmaker by another steelmaker might be a violation of the
A) Clayton Act
B) Federal Trade Commission Act
C) Wheeler-Lea Act
D) Celler-Kefauver Anti-Merger Act
E) Robinson-Patman Act
Q3) When were the first federal antitrust laws enacted in the United States?
A) around the turn of the twentieth century
B) after World War II
C) after World War I
D) during the Great Depression
E) with the U.S.Constitution,in 1787
To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 16: Public Goods and Public Choice
Available Study Resources on Quizplus for this Chatper
119 Verified Questions
119 Flashcards
Source URL: https://quizplus.com/quiz/73761
Sample Questions
Q1) Bureaus are
A) special-interest groups that try to influence legislators
B) government agencies that implement legislation
C) competing-interest groups that battle federal agencies
D) collections of legislators who actively engage in logrolling
E) a means of enforcing the median voter model in the decision-making process
Q2) In deciding between using a public bureau or a private firm to collect garbage,elected officials may prefer a public bureau because
A) public bureaus have been shown to be more efficient than private firms in garbage collection
B) they can convey political favors by giving people jobs in the public bureau
C) public bureaus will be more responsive to consumers
D) citizens would have to pay if private firms collected garbage
E) taxes will be lower if the public bureau is in charge of garbage collection
Q3) Direct majority-rule voting is a form of coercion in the sense that
A) all citizens must vote
B) all registered voters must vote
C) the median voter's preferences determine the outcome for everyone
D) the majority gets exactly what they want,but the minority does not.
E) individuals with higher incomes get more votes
To view all questions and flashcards with answers, click on the resource link above. Page 18
Chapter 17: Externalities and the Environment
Available Study Resources on Quizplus for this Chatper
187 Verified Questions
187 Flashcards
Source URL: https://quizplus.com/quiz/73762
Sample Questions
Q1) When consumption of a good creates positive externalities,
A) the private demand curve shifts rightward
B) the private demand curve shifts leftward
C) the private demand curve is below the marginal social benefit curve
D) the private demand curve is above the marginal social benefit curve
E) the equilibrium quantity determined by the free private market is too high
Q2) Free markets produce too little output when
A) negative externalities exist
B) positive externalities exist
C) production uses fixed-production technology
D) production uses variable technology
E) the resource is exhaustible
Q3) According to the Coase theorem,externality problems may be solved if the parties involved can negotiate.Which of the following is also needed?
A) clearly defined bargaining costs
B) enforceable bargaining costs
C) clearly defined,enforceable property rights and low bargaining costs
D) a property right that cannot be bought or sold
E) government regulation
To view all questions and flashcards with answers, click on the resource link above. Page 19
Chapter 18: Income Distribution and Poverty
Available Study Resources on Quizplus for this Chatper
118 Verified Questions
118 Flashcards
Source URL: https://quizplus.com/quiz/73763
Sample Questions
Q1) The Lorenz curve shows the
A) functional distribution of income
B) personal distribution of income
C) relative percentage of income going to each of the resources
D) demand for unskilled versus unskilled labor
E) cumulative percentage of income received by cumulative percentages of households
Q2) Temporary Assistance for Needy Families and Supplemental Security Income are
A) cash transfers for income assistance
B) cash transfers for social insurance
C) in-kind transfers for income assistance
D) in-kind transfers for social insurance
E) intended to provide health care for the poor
Q3) Which of the following is incorrect regarding the income assistance programs?
A) They can be cash transfer or in-kind transfer programs
B) They are means tested
C) The largest income assistance program is Medicaid
D) They require recipients to have a work history
E) The fastest growing income assistance program is Supplemental Security Income
To view all questions and flashcards with answers, click on the resource link above.
Chapter 19: International Trade
Available Study Resources on Quizplus for this Chatper
161 Verified Questions
161 Flashcards
Source URL: https://quizplus.com/quiz/73764
Sample Questions
Q1) Which of the following is not a criticism of the national defense argument for trade restrictions?
A) National defense only makes sense in the absence of international trade.
B) Stockpiling basic military hardware could eliminate the need to protect the domestic industry.
C) Nearly all industries can make some claim to strategic importance,so such trade restrictions can get out of hand.
D) National defense considerations can outweigh concerns about efficiency.
E) Government subsidies to domestic producers may be more efficient than trade restrictions.
Q2) International trade is most likely to occur whenever
A) one of the trading nations is self-sufficient
B) all of the trading nations are self-sufficient
C) one of the trading nations gains from trade
D) each of the trading nations gains from trade
E) labor is cheaper abroad
Q3) U.S.consumers would be better off if they bought only U.S.-produced goods.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 21
Chapter 20: International Finance
Available Study Resources on Quizplus for this Chatper
224 Verified Questions
224 Flashcards
Source URL: https://quizplus.com/quiz/73765
Sample Questions
Q1) A net importer of assets must have a
A) current account deficit
B) capital account deficit
C) current account surplus
D) capital account surplus
E) balance of deficit trade
Q2) Foreign exchange means
A) changing dollars into foreign currency
B) domestic currency held to finance international trade
C) foreign currency
D) trade between governments
E) trade between individuals in different countries
Q3) Foreign nations' demand for dollars increases as
A) Americans travel abroad
B) foreigners purchase American goods
C) Americans purchase foreign goods
D) Americans buy foreign stocks or bonds
E) Americans send cash gifts abroad
To view all questions and flashcards with answers, click on the resource link above.
22
Chapter 21: Developing and Transitional Economies
Available Study Resources on Quizplus for this Chatper
105 Verified Questions
105 Flashcards
Source URL: https://quizplus.com/quiz/73766
Sample Questions
Q1) Disappointed with problems caused by being a recipient of foreign aid from donor governments,the country of Upsilon should consider
A) refusing all future offers of aid
B) privatizing of aid,such as receiving funds from private not-for-profit agencies
C) becoming a donor instead
D) seeking even more government-sponsored aid
E) All of the answers are correct
Q2) Regarding the institutional requirements of efficient markets,
A) Western economic theory ignores the operation of efficient markets
B) market economists have an almost perfect understanding
C) market economists would never take the necessary institutions for granted
D) those involved in a transition from centrally planned economy must develop a deep appreciation
E) None of the answers is correct
Q3) A reliable system of property rights and enforceable contracts are prerequisites for creating incentives that support a healthy market economy.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.