Economics For Managers Book! Trivia Quiz
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Characteristics of economic laws are
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Mere statements of economic tendencies
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Less certain
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Hypothetical
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All the above
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Have you ever read the book "Economics for Managers?" How much do you remember from the book? Would you be able to pass this quiz? Economics for Managers introduces the basic ideas of economics and integrates them from a managerial perspective. It teaches you how to be aggressive in today's business environment, as managers must understand their business's economic principles. See moreThis fantastic quiz is all about the book "Economics for Managers." You got this.
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- 2.
Passive factor of production is
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Only Land
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Only Capital
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Both
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None
Correct Answer
A. BothExplanation
The correct answer is "Both." The passive factor of production refers to resources that are not actively involved in the production process but are still essential for production to occur. Both land and capital can be considered as passive factors of production. Land provides the physical space for production activities, while capital refers to the machinery, equipment, and tools used in production. Both factors contribute to the production process without actively participating in it.Rate this question:
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- 3.
According to Marshall, the basis of consumer surplus is
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Law of diminishing marginal utility
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Of equi-marginal utility
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Law of proportions
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All of the Above
Correct Answer
A. Law of diminishing marginal utilityExplanation
The correct answer is "Law of diminishing marginal utility". The law of diminishing marginal utility states that as a consumer consumes more units of a good, the additional satisfaction or utility derived from each additional unit decreases. This means that the consumer is willing to pay less for each additional unit, resulting in a surplus of satisfaction or utility that the consumer gains from the purchase. This surplus is known as consumer surplus. The other options, equi-marginal utility and law of proportions, are not directly related to the concept of consumer surplus.Rate this question:
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- 4.
Marginal utility is equal to the average utility at that time when the average utility is
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Increasing
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Maximum
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Falling
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Minimum
Correct Answer
A. MaximumExplanation
Marginal utility is equal to the average utility at the time when the average utility is at its maximum. This means that the additional satisfaction or benefit gained from consuming an additional unit of a good or service is at its highest point when the average satisfaction or benefit is at its maximum. In other words, when the average utility is at its peak, the marginal utility is also at its highest. This indicates that each additional unit of the good or service consumed is providing the maximum amount of additional satisfaction or benefit.Rate this question:
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- 5.
For inferior commodities, the income effect is
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Zero
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Negative
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Infinite
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Positive
Correct Answer
A. NegativeExplanation
The income effect refers to the change in consumption of a good due to a change in income. For inferior commodities, as income increases, the demand for these goods decreases. This is because as people's income rises, they tend to switch to higher-quality goods, making the consumption of inferior goods decrease. Therefore, the income effect for inferior commodities is negative.Rate this question:
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- 6.
The concept of supply curve as used in economic theory is relevant only for the case of
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Oligopoly competition
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Perfect or pure competition
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Monopolistic competition
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Monopoly
Correct Answer
A. Perfect or pure competitionExplanation
In perfect or pure competition, the supply curve represents the relationship between the quantity of a good or service that producers are willing and able to supply at various price levels. This is because in perfect competition, there are many buyers and sellers in the market, and no individual firm has the power to influence the market price. Therefore, each firm in perfect competition is a price taker and will supply goods or services at the prevailing market price. This leads to a horizontal supply curve, where the quantity supplied remains constant at different price levels.Rate this question:
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- 7.
One would expect a firm to close down rather than continue producing in the short-period if
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Variable costs were to fall below fixed costs
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Total revenue were less than total variable cost
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Total revenue were more than total variable cost
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Variable costs were to rise above fixed costs
Correct Answer
A. Total revenue were less than total variable costExplanation
If the total revenue is less than the total variable cost, it means that the firm is not generating enough revenue to cover its variable costs. In this situation, the firm would be operating at a loss and it would be more economically viable for the firm to close down rather than continue producing. Continuing production would only lead to further losses for the firm.Rate this question:
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- 8.
Marginal Utility (MU) curve is always
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Parallel to X-axis
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Falling
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Rising
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Parallel to Y-axis
Correct Answer
A. FallingExplanation
The correct answer is "Falling." The marginal utility (MU) curve represents the change in utility or satisfaction derived from consuming an additional unit of a good or service. As individuals consume more of a good, the additional utility derived from each additional unit decreases. This is known as the law of diminishing marginal utility. Therefore, the MU curve is always falling as more units are consumed.Rate this question:
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- 9.
If marginal cost is above average variable at a time when output is rising, then
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Average variable cost is rising
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Average variable cost is falling
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Average total revenue is rising
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Average total cost is falling
Correct Answer
A. Average variable cost is risingExplanation
When the marginal cost is above the average variable cost while the output is increasing, it means that the additional cost of producing one more unit is higher than the average cost of producing each unit. This suggests that the average variable cost is rising because the cost of producing each unit is increasing as more units are being produced.Rate this question:
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- 10.
In monopoly, the relationship between average revenue and marginal revenue curves is as follows
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Average revenue curve lies above the MR-curve
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AR curve lies below the MR-curve
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AR curve coincides with the MR-curve
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AR curve is parallel to the MR-curve
Correct Answer
A. Average revenue curve lies above the MR-curveExplanation
In monopoly, the relationship between average revenue and marginal revenue curves is that the average revenue curve lies above the marginal revenue curve. This is because in a monopoly, the firm is the sole producer and seller of a product, giving them the ability to set the price. As the firm increases the quantity of output, the marginal revenue decreases. However, the average revenue is always higher than the marginal revenue because the firm is able to charge a higher price for each unit of output sold.Rate this question:
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- 11.
Price elasticity of Demand is the degree of responsiveness of change in quantity demanded with respect to change in ______________, other factors remaining constant.
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Income of consumer
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Price of commodity
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Price of related goods
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Tastes and preferences of consumer
Correct Answer
A. Price of commodityExplanation
Price elasticity of demand measures how sensitive the quantity demanded of a good is to a change in its price. It indicates the percentage change in quantity demanded for a given percentage change in the price of the commodity. Therefore, the correct answer is "Price of commodity."Rate this question:
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- 12.
Demand is determined by
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Price of product
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Price of related goods
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Tastes and preferences of consumer
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All of the above
Correct Answer
A. All of the aboveExplanation
The demand for a product is determined by various factors including the price of the product, the price of related goods, and the tastes and preferences of consumers. When the price of a product increases, the demand for that product typically decreases. Similarly, the price of related goods, such as substitutes or complements, can also affect the demand for a particular product. Additionally, the tastes and preferences of consumers play a significant role in determining their demand for a product. Therefore, all of the factors mentioned above contribute to determining the demand for a product.Rate this question:
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- 13.
Total Cost curve is
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Rectangular hyperbola shaped
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Inverse S-shaped
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Inverse U-shaped
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None of the above
Correct Answer
A. Inverse S-shapedExplanation
The Total Cost curve is described as inverse S-shaped because it initially increases at a decreasing rate, then reaches a point where it starts increasing at an increasing rate. This shape indicates that as production increases, the total cost also increases, but at a diminishing rate until a certain point. After that point, the total cost increases at an accelerating rate, indicating diminishing returns to scale. This shape is commonly observed in the short run, where fixed costs are present, and variable costs increase at a decreasing rate due to economies of scale, followed by diseconomies of scale.Rate this question:
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- 14.
Law of demand states that change in quantity demanded is ______________________ proportional to change in price of commodity.
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Inversely
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Directly
Correct Answer
A. InverselyExplanation
The correct answer is "Inversely" because the law of demand states that as the price of a commodity increases, the quantity demanded decreases, and vice versa. This means that there is an inverse relationship between the price of a commodity and the quantity demanded. When the price goes up, consumers tend to buy less of the product, and when the price goes down, consumers tend to buy more.Rate this question:
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- 15.
The shape of a perfectly elastic demand curve is _____
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U curve
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Horizontal line
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Vertical line
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Inverted U curve
Correct Answer
A. Horizontal lineExplanation
A perfectly elastic demand curve is represented by a horizontal line because it indicates that consumers are willing to buy any quantity of a good or service at a specific price. This means that even a small change in price will result in a significant change in quantity demanded, with no change in total revenue. In other words, the demand is infinitely responsive to changes in price, resulting in a horizontal line.Rate this question:
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- 16.
In the long run, there are both fixed costs and variable costs.
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True
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False
Correct Answer
A. FalseExplanation
In the long run, there are only variable costs. This means that all costs can be adjusted and changed based on the level of production or the size of the business. Fixed costs, on the other hand, are costs that do not change regardless of the level of production or the size of the business. Therefore, the statement that there are both fixed costs and variable costs in the long run is false.Rate this question:
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- 17.
In which stage of production, would a producer always try to operate?
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First stage
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Second stage
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Third stage
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All of the above
Correct Answer
A. Second stageExplanation
In the second stage of production, also known as the production stage, a producer would always try to operate. This is because the production stage involves the actual creation or manufacturing of the product. It is during this stage that raw materials are transformed into finished goods. Therefore, it is crucial for a producer to focus on operating efficiently and effectively in order to maximize productivity and meet customer demand.Rate this question:
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- 18.
There is ______ relationship between the price of good X and demand for good Y, where X and Y are complementary goods.
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Direct
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Inverse
Correct Answer
A. InverseExplanation
When X and Y are complementary goods, they are typically used together. An inverse relationship between the price of good X and demand for good Y means that as the price of good X increases, the demand for good Y decreases, and vice versa. This is because when the price of X goes up, consumers are less likely to purchase it, leading to a decrease in demand for the complementary good Y. Conversely, when the price of X decreases, consumers are more likely to buy it, increasing the demand for the complementary good Y.Rate this question:
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- 19.
The cost of next best alternative is known as
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Explicit cost
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Incremental Cost
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Real Cost
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Opportunity cost
Correct Answer
A. Opportunity costExplanation
Opportunity cost refers to the value of the next best alternative that is forgone when making a decision. It represents the cost of choosing one option over another. In this context, the cost of the next best alternative is being referred to as opportunity cost.Rate this question:
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- 20.
Under which market structure AR=MR=P ?
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Perfect competition
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Monopoly
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Oligopoly
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Monopolistic
Correct Answer
A. Perfect competitionExplanation
In perfect competition, the market is characterized by a large number of buyers and sellers, homogeneous products, free entry and exit of firms, perfect information, and no market power. In this market structure, each firm is a price taker and has no control over the market price. Therefore, the average revenue (AR), marginal revenue (MR), and price (P) are equal. This is because any individual firm's output level does not have a significant impact on the market price, so the firm can sell all its output at the prevailing market price.Rate this question:
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- 21.
An economy is at the take-off stage on its path to development when it
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Becomes stagnant
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Begins steady growth
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Is liberalized
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Gets maximum foreign aid
Correct Answer
A. Begins steady growthExplanation
The take-off stage refers to the initial phase of economic development where an economy starts to experience sustained and significant growth. This growth is characterized by various factors such as increased investment, technological advancements, and improvements in productivity. Therefore, the correct answer is "begins steady growth" as it aligns with the concept of the take-off stage in economic development.Rate this question:
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- 22.
Census in India is being held regularly after every
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6 years
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8 years
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10 years
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12 years
Correct Answer
A. 10 yearsExplanation
The correct answer is 10 years. Census in India is conducted every 10 years to collect data on the population, demographics, and socio-economic conditions of the country. This information is crucial for planning and implementing various government policies and programs. Conducting the census regularly helps in understanding the changing population dynamics and enables the government to allocate resources effectively.Rate this question:
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- 23.
Difference between Real and Nominal GDP is
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Change in price level from base year to current year
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That real GDP is always smaller than Nominal GDP
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Measured by excluding some of the sectors
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None Of The Above
Correct Answer
A. Change in price level from base year to current yearExplanation
The correct answer is "Change in price level from base year to current year." The difference between real and nominal GDP is that real GDP is adjusted for changes in the price level over time, while nominal GDP is not. Real GDP reflects the actual output of goods and services in an economy by accounting for inflation or deflation, whereas nominal GDP only measures the current dollar value of that output. By adjusting for changes in prices, real GDP allows for a more accurate comparison of economic growth or contraction over different time periods.Rate this question:
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- 24.
GDP is the market value of all the final goods.
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Produced domestically
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Produced by all factors of production
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Produced by domestic factors of production
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All Of The Above
Correct Answer
A. Produced domesticallyExplanation
The correct answer is "Produced domestically". This means that the goods included in the calculation of GDP are those that are produced within the country's borders, regardless of whether they are produced by domestic factors of production or by all factors of production. It is important to note that GDP only includes the market value of final goods, meaning goods that are ready for consumption and not intermediate goods used in the production process.Rate this question:
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- 25.
When comparing nation's economic position with other one should see its
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Per Capita GDP
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GDP
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Currency in circulation
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None Of The Above
Correct Answer
A. Per Capita GDPExplanation
When comparing a nation's economic position with another, it is important to consider its Per Capita GDP. Per Capita GDP is a measure that calculates the average income per person in a country, indicating the standard of living and economic well-being of its citizens. It takes into account the total GDP of a country and divides it by the population, providing a more accurate representation of the economic conditions on an individual level. Therefore, Per Capita GDP is a crucial factor to consider when comparing the economic positions of different nations.Rate this question:
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Mar 21, 2023Quiz Edited by
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Oct 31, 2017Quiz Created by
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