Managerial Economics Quiz

Who authored "The Wealth of Nations" and is regarded as the father of modern economics?

• Lionel Robbins

• Adam Smith

• Alfred Marshall

• David Ricardo

According to Lionel Robbins, economics is defined as the study of:

• National wealth creation

• Human behavior as a relationship between ends and scarce means

• Price fluctuations

• Government policies

The economic principle of scarcity implies:

• Resources are unlimited

• Human wants are limited

• Resources are limited, but wants are unlimited

• Markets are always balanced

Which of the following best explains opportunity cost?

• The highest price paid for a good

• The next best alternative foregone

• Total revenue earned

• Fixed costs of production

What type of economic system features private ownership and market-based allocation of resources?

• Socialism

• Communism

• Capitalism

• Feudalism

Managerial economics can best be defined as:

• Study of national economic policy

• Application of economic theory to business decision-making

• Collection of historical data only

• Analysis of government budgets

The Production Possibility Frontier (PPF) illustrates:

• The relationship between income and spending

• The maximum possible output combinations given limited resources

• The effect of taxation on savings

• National economic growth

Which of the following describes the circular flow model?

• Money and goods flow between households and firms

• Only firms interact with the government

• Trade between two countries

• None of the above

Which of the following is NOT one of the three basic economic questions?

• What to produce

• How to produce

• Where to advertise

• For whom to produce

Marginal analysis involves comparing:

• Average profits and total revenue

• Additional benefits and additional costs of an action

• National income with inflation rate

• Total production and total sales