Business Economics Quiz

Who is considered the father of modern economics?

• Adam Smith

• Alfred Marshall

• Lionel Robbins

• Karl Marx

Which economist defined economics as "a study of mankind in the ordinary business of life"?

• Adam Smith

• Alfred Marshall

• Lionel Robbins

• J.M. Keynes

Which of the following is not a central problem of an economy?

• What to produce

• How to produce

• Where to produce

• For whom to produce

Utility refers to the:

• Usefulness of a commodity

• Power of a commodity to satisfy a want

• Demand of the product

• Price of a product

The measurement of utility is assumed to be:

• Cardinal in ordinal utility analysis

• Ordinal in cardinal utility analysis

• Cardinal in cardinal utility analysis

• Impossible in economics

Total utility is maximum when marginal utility is:

• Zero

• Negative

• Constant

• Increasing

The law of diminishing marginal utility states that as a consumer consumes more units of a good:

• Marginal utility increases

• Marginal utility decreases

• Total utility decreases

• Utility remains constant

Which of the following is an assumption of the law of diminishing marginal utility?

• Tastes and preferences change

• All units consumed are identical

• There is unlimited desire

• The good is free

Law of Equi-Marginal Utility is also known as the law of:

• Substitution

• Utility Maximization

• Demand

• Supply

The Law of Equi-Marginal Utility helps explain how consumers:

• Minimize cost

• Maximize total utility

• Maximize marginal utility

• Minimize utility