300+ Fundamentals of Business Economics MCQs & Answers

Fundamentals of Business Economics Multiple Choice Questions

1. BY which other name, economics is known?
A. Policy
B. Society
C. State
D. Science of Economizing

Answer: D Science of Economizing

2. Who has given the concept that economics is neutral about purpose?
A. Marshall
B. Robbins
C. Adam smith
D. kautilya

Answer: B Robbins

3. Who is known to be the first economist to have started studying economics as science?
A. kautilya
B. Marshall
C. Robbins
D. Adam smith

Answer: D Adam smith

4. According to whom, economics is the science of wealth?
A. kautilya
B. Adam smith
C. Marshall
D. Robbins

Answer: B Adam smith

5. According to whom, economics is a welfare-oriented theory?
A. Marshall
B. Adam smith
C. Hicks
D. Robbins

Answer: A Marshall

6. How is the concept of scarcity?
A. Absolute
B. Relative
C. Religious
D. Political

Answer: B Relative

7. Who is the writer of Wealth of Nations?
A. Marshall
B. Robbins
C. Adam smith
D. kautilya

Answer: C Adam smith

8. Who introduced economics as real science?
A. Adam smith
B. Robbins
C. Samuelson
D. Marshall

Answer: B Robbins

9. Which economist put social preferences and distribution in the centre of economics?
A. kautilya
B. Samuelson
C. Marshall
D. Adam smith

Answer: B Samuelson

10. Which economist studies the concept of scarcity in economics?
A. kautilya
B. Adam smith
C. Robbins
D. Marshall

Answer: C Robbins

Fundamentals of Business Economics MCQs

11. Which examines the study of demand analysis in economics?
A. Consumer
B. Firm
C. Market
D. Production

Answer: A Consumer

12. What is the third nature of human other than consumer and producer?
A. Customer
B. Users
C. Labour
D. None of other

Answer: C Labour

13. When products are expensive then how is the demand of prestigious goods of the rich?
A. More
B. Less
C. Zero
D. Negative

Answer: A More

14. The change in price of substitute good ——- the demand for goods.
A. Decreases
B. Increases
C. Zero
D. Does not affect

Answer: A Decreases

15. How is the demand curves sloped?
A. Negative
B. Positive
C. Parallel to X axis
D. Parallel to Y axis

Answer: A Negative

16. How many types of price elasticity of demand are there?
A. Two
B. Four
C. Five
D. Seven

Answer: C Five

17. What will be the elasticity of demand if percentage change in demand is less than the percentage Change in price?
A. Elastic demand
B. Inelastic demand
C. Perfectly elastic demand
D. Perfectly inelastic demand

Answer: B Inelastic demand

18. What will be the nature of demand if elasticity of demand is 1?
A. Perfectly elastic demand
B. Perfectly inelastic demand
C. Unit elasticity of demand
D. Elastic demand

Answer: C Unit elasticity of demand

19. How many types of income elasticity are there?
A. Two
B. Three
C. Four
D. Five

Answer: B Three

20. What is the meaning of the change in demand due to change in price of related goods?
A. Price elasticity of demand
B. Cross elasticity of demand
C. Income elasticity of demand
D. Price elasticity of supply

Answer: B Cross elasticity of demand

21. Which relationship of price and demand is explained by elasticity of demand?
A. Correlation
B. Inverse
C. Quantitative
D. Equal

Answer: C Quantitative

22. What is elasticity of demand in case of perfect competition?
A. Elastic
B. Inelastic
C. Perfectly elastic
D. Perfectly inelastic

Answer: C Perfectly elastic

23. What is the elasticity of demand for luxury goods?
A. Elastic
B. Inelastic
C. Perfectly elastic
D. Perfectly inelastic

Answer: A Elastic

24. What is the income elasticity of giffen goods?
A. Unit income elasticity
B. income elasticity is greater than 1
C. Zero income elasticity
D. Negative income elasticity

Answer: A Unit income elasticity

25. Which of the following goods may have zero income elasticity?
A. Bajara
B. Scooter
C. Niddle
D. Ghee

Answer: C Niddle

26. What is the slope of demand curve when demand is perfectly inelastic?
A. Negative slope
B. Parallel to vertical axis
C. Parallel to horizontal axis
D. Positively slopped

Answer: B Parallel to vertical axis

27. How is the elasticity of demand in long run compare to short run?
A. More
B. Equal
C. Less
D. Zero

Answer: A More

28. How is the demand of most of goods of rich people?
A. Elastic
B. Perfectly Elastic
C. Inelastic
D. Unit Elastic

Answer: C Inelastic

29. Relationship between which factors are shown by production function?
A. Production and sale
B. Production and purchase
C. Production and factors of production
D. Sales and purchase

Answer: C Production and factors of production

30. How many forms of production function have?
A. One
B. Two
C. Three
D. Four

Answer: B Two

31. On whom production function is based?
A. Technology
B. Market demand
C. Market supply
D. Political factor

Answer: A Technology

32. What is the size of firm in short run production function?
A. Variable
B. Flexible
C. Fixed
D. Uncertain

Answer: C Fixed

33. In how many stages the effects of one factor of production by increasing proportion and by keeping Other functions of production fixed?
A. One
B. Two
C. Three
D. Many

Answer: B Two

34. In Which stage of production total, average and marginal production increases?
A. First
B. Second
C. Third
D. Each

Answer: A First

35. Which law is seen in the third stage of production?
A. Decreasing returns
B. Increasing returns
C. Fixed returns
D. Scale returns

Answer: A Decreasing returns

36. In which stage of production, total production decreases instead of increases?
A. First
B. Second
C. Third
D. Each

Answer: C Third

37. At which stage entrepreneur stop to increase the production of functions?
A. Maximum Marginal Production
B. Maximum Average Production
C. Marginal Production = Average Production
D. Zero Marginal Production

Answer: D Zero Marginal Production

38. To which sector, law of decreasing returns applied first?
A. Agriculture
B. Industry
C. Service
D. Trade

Answer: A Agriculture

39. In which stage of production, marginal production becomes negative, but average production becomes positive?
A. First
B. Second
C. Third
D. None of the given

Answer: C Third

40. Which changes are measured in the law of variable proportion?
A. Total Production
B. Marginal Production
C. Average Production
D. All of the given

Answer: D All of the given

41. Which cost diminishes but never becomes zero?
A. Fixed cost
B. Average fixed cost
C. Variable cost
D. Average Variable cost

Answer: B Average fixed cost

42. Total production cost + Unit of production = ————
A. Average cost
B. Marginal cost
C. Average Fixed Cost
D. Average Variable Cost

Answer: B Marginal cost

43. How is the shape of average cost curve?
A. Hockey stick
B. U
C. V
D. Square

Answer: B U

44. When proportion of production is zero, then which cost is positive?
A. Variable
B. Fixed
C. Average
D. Marginal

Answer: B Fixed

45. How is the slope of fixed cost curve?
A. Negative
B. Positive
C. Parallel to X-axis
D. Parallel to Y-axis

Answer: C Parallel to X-axis

46. Daily wages of labours is the example of which cost?
A. Fixed cost
B. Total cost
C. Variable cost
D. Marginal cost

Answer: A Fixed cost

47. How all costs become at long run?
A. Fixed
B. Short
C. Long
D. Variable cost

Answer: D Variable cost

48. Which type of cost curve is parallel to X axis
A. Variable cost
B. Fixed cost
C. Average Variable cost
D. Average Fixed cost

Answer: B Fixed cost

49. Which type of cost curve has hockey shaped?
A. Average cost
B. Variable cost
C. Marginal cost
D. Total cost

Answer: C Marginal cost

50. Which cost has no straight relation with units of production?
A. Fixed cost
B. Variable cost
C. Average cost
D. Marginal cost

Answer: A Fixed cost

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