Quiz No.

1
Subject: Business Economic Analysis Class: MBA (2nd) & MPA (2nd)
Name: ________________________________________________ Date:______________ Question No.1. Multiple Choices. Encircle the correct answer form the options given for each of the phrase/blank. (Each question carries 1 mark) (Total 10 Marks) 1. The situation in which there is not enough goods relative to desires is called: a. Abundance. c. Demand. b. Scarcity. d. Efficiency. 2. The type of economy is which Government answers the major economic questions through its ownership of resources and its power to enforce decisions is called. a. Command economy. c. Positive economics. b. Efficient economy d. Macroeconomics. 3. The situation in which limited resources are being used most effectively in satisfying peoples wants and needs is called: a. Efficient. c. Abundant. b. Economic. d. Scarce. 4. The study of the behavior of the overall economy is called: a. Normative economics. c. Macroeconomics. b. Positive economics. d. Microeconomics. 5. If we believed that event b occurs simply because it follows event a, then we would be trapped by the: a. Failure to hold other things equal. c. Post hoc fallacy. b. Fallacy of composition. d. Adam Smith syndrome. 6. An economy which allows firms and individuals to decide the answers to the three fundamental questions of economic organization is called a: a. Mixed economy. c. Normative economy. b. Market economy. d. Command economy. 7. The extreme case of a market economy is one in which government does not intervene in economic decisions. This kind of market economy is called a _______ market. a. Command. c. Weak. b. Mixed. d. Laissez-faire. 8. The three broad categories of inputs to production are: a. Earth, wind, and capital. c. Land, labor, and capital. b. Earth, money, and labor. d. Land, labor, and money.

9. Productive _______ exists when an economy cannot produce more of one good without producing less of another good. a. Scarcity c. Efficiency b. Economics d. Opportunity cost 10. The production-possibility frontier (PPF) shows the _______ of production that can be obtained by an economy, given _______. a. Minimum amounts; technology c. Maximum amounts; a command and inputs to production. economy. b. Minimum amounts; efficiency. d. Maximum amounts; technology and inputs to production. Question No.2. True false, encircle T if true or F if false. (Each question carries (0.5) mark).

(Total 5 Marks)

1. Capital is generally known as natural resources, such as land, energy resources, and the non-energy resources. ( T / F ) 2. The opportunity cost of a decision is the value of the good or service forgone.( T / F ) 3. Inputs are the various useful goods or services that result from the production process and are either consumed or employed in further production. ( T / F ) 4. Mixed economy is an economic system in which both the state and private sector direct the economy, reflecting characteristics of both market economies and planned economies. ( T / F ) 5. The nature of economic laws is indicated by the phrase, other things being equal (ceteris paribus). ( T / F ) 6. Scientific approach: involves observing economic affairs and drawing upon statistics and the historical record. ( T / F ) 7. Economics is the study of how societies use abundant resources to produce tires and distribute them among different people. ( T / F ) 8. Early (classical) economists called Economics as Science of wealth. 9. Robbins said that economics is the science of material welfare. ( T / F )

( T / F )

10. The study of the behavior of firms, individual markets, and households is called normative economics. ( T / F )