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Business Economics - Business Economics Section 1 Online Exam Quiz

Important questions about Business Economics - Business Economics Section 1. Business Economics - Business Economics Section 1 MCQ questions with answers. Business Economics - Business Economics Section 1 exam questions and answers for students and interviews.

1. The market period supply curve for perishable commodities is


A : Perfectly elastic

B : Perfectly inelastic

C : Relatively elastic

D : Relatively inelastic

2. Consider the following 1. A large number of buyers and sellers 2. Firms produce differentiated products 3. Free entry and exit of firms 4. Perfect knowledge about technology. Which of the above are the characteristics of monopolistic competition?


A : 1 and 3

B : 2 and 3

C : 2,3 and 4

D : 1,2,3 and 4

3. The degree of monopoly power can be measured by the formula


A : (P - MC) / P

B : MR / (AR - MR)

C : AR / (AR - MR)

D : (AR -MR ) / MR

4. Under monopoly and imperfect competition, MC is


A : Equal to the price

B : Less than the price

C : More than the price

D : Any of the above

5. The value of σ for Cobb-Douglas production function is


A : ∞

B : 0

C : 1

D : -1

46. Which one of the following is not a common property of an indifference curve


A : Downward sloping

B : Convex to the origin

C : Two indifference curves can intersect each other

D : None of the above

47. The appropriate objective of an enterprise is


A : Maximisation of sales

B : Maximization of the owner's wealth

C : Maximization of profits

D : None of the above

48. The positive income effect is greater than the negative substitution effect in case of


A : Normal goods

B : Inferior goods

C : Luxury goods

D : Giffen goods

49. Match List-I with List-II and select the correct answer using the codes given below the lists:


A : a b c d I II III IV

B : a b c d II III IV I

C : a b c d III II IV I

D : a b c d IV III II I

50. When the demand for a commodity also depends upon prices of the substitutes & complementaries or relative prices then it is called


A : Price-demand

B : Income-Demand

C : Cross-Demand

D : None of the above

51. Assertion (A). Business Economics is a tool facilitating decision making in business. Reason (R). It provides an analytical understanding of economic activities.


A : Both (A) and (R) are not correct.

B : Both (A) and (R) are correct.

C : (A) is true, but (R) is false

D : (R) is true but (A) is false.

52. Which one of the following is not matched properly.


A : I and 3

B : III and 4

C : II and 1

D : IV and 2

53. For the relationship between AC and MC, which of the following statement is wrong?


A : Both AC & MC are calculated from TC

B : If AC Falls, MC will rise

C : If AC rises, MC also rises

D : For the minimum point of AC, the average cost is equal to marginal cost.

54. Assertion (A). The demand for the product of a firm under oligopoly is at a price higher than the prevailing market price. Reason (R). The oligopolistic firm faces a kinked demand curve.


A : Both (A) and (R) are false.

B : Both (A) and (R) are true, but (R) is not the correct explanation of (A).

C : (A) is true but (R) is false.

D : (A) is false but (R) is true.

55. In the case of utility theory, as income increases, the marginal utility of money


A : Decreases

B : Increases

C : Remains constant

D : None of these

56. When quantity demanded changes due to factors other than price, it is called


A : increase in demand

B : decrease in demand

C : Both (a) and (b)

D : None of these

57. Assertion (A). "Utility will be maximized when the marginal unit of expenditure in each direction brings the same incremental utility. Reason (R). A consumer will try to maximize his utility.


A : Both (A) and (R) are true and (R) is the correct explanation of (A).

B : Both (A) and (R) are true but (R) is not the correct explanation of (A).

C : Both (A) and (R) are false.

D : (A) is true but (R) is false.

58. The perfect competition is characterized by


A : seller as a price taker

B : firms selling identical products

C : presence of many firms

D : all of these

59. The term 'revealed preference' was introduced in the book by


A : Das Capital

B : Affluent Society

C : Foundations of Economic Analysis

D : None of these

60. In the case of contraction or extension in demand, the movement is along a demand curve whereas, in case of increase or decrease, the demand curve will move


A : downward

B : upward

C : any of these

D : none of these

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