Business Economics Test

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Business Economics Test - 1

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Weekly Quiz Competition

Question 1
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An accurate clock shows 8 O' clock in the morning. Through how many degrees will the hour - hand rorate when the clock shows 2 O' clock in the afternoon?

A
30°

B
180°

C
90°

D
150°

Solution
Question 2
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The supply curves of two firms 1 and 2 are given below.

Choose the correct option(s) about the market supply. All prices are in rupees.

A
Market supply is 48 at a price of Rs. 6

B
Market supply is 13 at a price of Rs. 6

C
Market supply is 23 at a price of Rs. 4

D
both (a) and (c)

Solution

Let q be the market supply.

p < 2 ⇒ q = 0

2 ≤ p < 5 ⇒ q = q1 = 6p − 1

p ≥ 5 ⇒ q = q1 + q2 = 9p − 6

Hence, p = 6

⇒ q = 9 × 6 − 6

= 48

p = 4

⇒ q = 6 × 4 − 1

= 23

Hence, the correct option is (d).✅
Question 3
1 / -0.25

MRS is determined by:

A
satisfaction level of the consumer

B
income of the consumer

C
tastes of the consumer

D
preferences of the consumer

Solution

MRS (marginal rate of substitution) is always related to the choice and preferences of the consumer.

In economics, the marginal rate of substitution (MRS) is the rate at which a consumer can give up some amount of one good in exchange for another good while maintaining the same level of utility.

Hence, the correct option is (d). ✅
Question 4
1 / -0.25

Commercial banks accept deposits from the public in the form of:

A
current

B
savings

C
Both (a) and (b)

D
Gold deposits

Solution

A commercial bank accepts deposits in the form of current, savings and fixed deposits. It collects the surplus balances of the Individuals, firms and finances the temporary needs of commercial transactions. The first task is, therefore, the collection of the savings of the public.

Hence, the correct option is (c). ✅
Question 5
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Gross fixed capital formation (GFCF), also called:

A
capital output ratio

B
saving

C
wealth formation

D
investments

Solution

Gross fixed capital formation (GFCF), also called "investment", is defined as the acquisition of produced assets (including purchases of second-hand assets), including the production of such assets by producers for their own use, minus disposals.

Hence, the correct option is (d). ✅
Question 6
1 / -0.25

If the marginal propensity to save decreases, the value of the multiplier will

A
Increase

B
Decrease

C
Remain constant

D
Decrease as much as the decrease in MPS

Solution

If the marginal propensity to save decreases, the value of the multiplier will increase.

For example, if MPS = 0.2, then multiplier effect is 5, and if MPS = 0.4, then the multiplier effect is 2.5. Thus, we can see that a lower propensity to save implies a higher multiplier effect.

Hence, the correct option is (a). ✅
Question 7
1 / -0.25

Imperfect competition was introduced by:

A
Marshall

B
Keynes

C
Roy Harrod

D
None of these

Solution

Roy Harrod ✅

Roy Harrod was the first economist to develop the theory of imperfect competition and, other authors, such as Edward Chamberlin and Joan Robinson renewed its interest and made major contributions.

Hence, the correct option is (c). ✅
Question 8
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When the money value of money exceeds the commodity value of money, it is called:

A
full bodied money

B
credit money

C
fiat money

D
fiduciary money

Solution

Credit money has a face value which is much higher than the commodity value. Credit money consists of credit cards, demand deposits, among others.

Hence, the correct option is (b). ✅
Question 9
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A cost function is a function of:

A
marginal products

B
everything

C
output and input prices

D
average products

Solution

A cost function is a function of input prices and output quantity whose value is the cost of making that output given those input prices, often applied through the use of the cost curve by companies to minimize cost and maximize production efficiency.

Hence, the correct option is (c). ✅
Question 10
1 / -0.25

What kind of goods has elastic demand?

A
inferior goods

B
normal goods

C
luxury goods

D
necessity goods

Solution

Luxury goods elastic demand as a small change in price of it can lead to large change in quantity demanded. Elasticity of demand refers to the change in demand when there is a change in another factor, such as price or income. If demand for a good or service is static even when the price changes, demand is said to be inelastic. Examples of elastic goods include luxury items and certain food and beverages.

Hence, the correct option is (c). ✅

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Re-Attempt Weekly Quiz Competition

Business Economics Test - 1

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Business Economics Test - 1

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SHARING IS CARING

Question 1

30°

180°

90°

150°

Solution

Question 2

Market supply is 48 at a price of Rs. 6

Market supply is 13 at a price of Rs. 6

Market supply is 23 at a price of Rs. 4

both (a) and (c)

Solution

Question 3

satisfaction level of the consumer

income of the consumer

tastes of the consumer

preferences of the consumer

Solution

Question 4

current

savings

Both (a) and (b)

Gold deposits

Solution

Question 5

capital output ratio

saving

wealth formation

investments

Solution

Question 6

Increase

Decrease

Remain constant

Decrease as much as the decrease in MPS

Solution

Question 7

Marshall

Keynes

Roy Harrod

None of these

Solution

Question 8

full bodied money

credit money

fiat money

fiduciary money

Solution

Question 9

marginal products

everything

output and input prices

average products

Solution

Question 10

inferior goods

normal goods

luxury goods

necessity goods

Solution

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