Questions

1- Any production process face an……. inputs, accordingly countries, business and
entrepreneur have to use these resources efficient and avoid waste of resources.
a- Raw material
b- Scarcity
c- A and b both
d- Not all of the above

2- ………….. is the branch of economics that study the behavior and how the individual
and business takes decision according to the different kinds of markets.
a- Microeconomics
b- Macroeconomics
c- Pico economics
d- Not all of the above

3- ………….. is the study of how scarce resources are directed most efficiently to achieve managerial
goals.
a- Management
b- Human Resource Management
c- Managerial economics
d- Strategic Management

4- ………….. own resources and supply factor services like land, raw material, labor and capital to
the firms which helps them to produce goods and services.
a- Households
b- Government
c- Firms
d- Not all of the above

5- ………… was an actual place where Buyers – Demand side meet with sellers – supply
a- market
b- room
c- store
d- Not all of the above

6- At falling supply with increasing demand will due to:

a- Rising prices
b- Falling prices
 c- Nothing
d- Not all of the above

7- What mean that falling prices?

a- Rising supply
b- Increasing demand
c- A and b
d- Not all of the above

8- …………… is the amount that consumers plan to buy during a particular time period, and at a
particular price.
a- The quantity of Demand
b- The quantity of Supply
c- A and b
d- Not all of the above

9- ……………. shows the direct relation between the quantity of goods and service that the
producers willing to supply and the price level
a- Supply curve
b- Demand curve
c- Prices
d- Products

10- Factors effect on supply:

a- The cost of production
b- The government fiscal policy
c- the level of technology used
d- All of the above

11- ……………. is the price at which the quantity demanded equals the quantity
supplied.
a- Equilibrium
b- Equilibrium price
c- Equilibrium quantity
d- Not all of the above

12- at higher prices, the supplies want to sell more than demands want to buy, the result is:
a- surplus
b- shortage
c- a and b
d- Not all of the above

13- …………….. refers how a company sets the prices of its products and services based on
costs, value, demand, and competition.
a- Pricing policy
b- Price elasticity of demand
c- A and b
d- Not all of the above

14- …………… mean If the price increase by a large amount, Quantity demand decrease but
with small amount.
a- Inelastic product
b- Elastic product
c- Price elastic of demand
d- All of the above

15- Price elasticity of demand = %change in price / %change in quantity demand

a- True
b- False

16- When a 1 percent changes in price calls forth more than a 1 percent change in quantity
demanded, the good has:
a- Unit elastic demand.
b- Price elastic demanded.
c- Price inelastic demand.
d- All of the above

17- When a 1 percent changes in price produces less than a 1 percent change in Quantity
demanded, the good has:
a- Unit elastic demand.
b- Price elastic demanded.
c- Price inelastic demand.
d- All of the above

18- ……………. shows the direct relation between the inputs the producer need and the
amount of output.
a- Production function
b- Customer behavior
c- A and b
d- Not all of the above

19- To increase output in the short run, a firm must increase the quantity of variable inputs
it uses.
a- True
b- False

20- …………. is the total amount produced by using an amount of inputs.

a- Marginal product
b- Total product
c- Prices
d- All of the above
21- ……………. is the cost of all the productive resources it uses. We divide it to total fixed
cost & total variable cost.
a- Total cost
b- Total fix cost
c- Total variable cost
d- Margin cost

22- ………….. is the cost of all the firm’s variable inputs which will always change
with change of output.
a- Total cost
b- Total fix cost
c- Total variable cost
d- Margin cost

23- Value maximization that a business makes sound decisions in the market place
(buy the correct quantity of inputs at least cost and choose the optimal level of
output).
a- True
b- False

24- ……………… is defined by several idealizing conditions, collectively

a- Perfect competition
b- Monopolistic competition
c- Oligopoly
d- Monopoly

25- …………… is a market structure with a small number of firms, none of which can keep the
others from having significant influence
a- Perfect competition
b- Monopolistic competition
c- Oligopoly
d- Monopoly

26- A firm will maximize profits when it produced at that level

where marginal cost equals marginal revenue
a- True
b- False

27- The branch of economics concerned with the behavior of markets, firms, and
households is known as
a- Microeconomics
b- Macroeconomics
c- Econometrics
d- Keynesian Economics
28- Which of the following characteristic can exist both in perfect competition and in
monopoly?
a- Ease of entry
b- Many sellers
c- Many buyers
d- Perfectly elastic supply curve

29- When price rises, the quantity demanded generally tends to fall because of:
1- income effect
2- substitution effect
a- 1 only
b- 2 only
c- 1 and 2
d- Not all of the above

30 - Marginal revenue (MR) is ……….. when demand is elastic, …………. when demand is unit-elastic,
and ………….. when demand is inelastic.
a- zero, positive, negative
b- zero, negative, positive
c- positive, negative, zero
d- positive, zero, negative

31 - The most fundamental economic problem is ………………

a- Security
b- the fact the United States buys more goods from foreigners than we sell to foreigner
c- health.
d- scarcity

32 Scarcity requires that people must

a- Trade
b- Compete
c- Cooperate
d- Make choices

33 Which is the most accurate definition of the study of economics? Economics is the study of
a- the distribution of surplus goods to those in need
b- affluence in a morally bankrupt world
c- ways to reduce wants to eliminate the problem of scarcity
d- the choices we make because of scarcity

34 Which of the following is a microeconomic topic?

a- the reasons for a decline in average prices
b- the reasons why Kathy buys less orange juice
c- the cause of why total employment may decrease
d- the effect of the government budget deficit on inflation
35 The Rational Producer always seeking to achieve maximum ……….
a- Value
b- Profit
c- Cost
d- All of the above

36 The Biggest Decision that any firms make is:

a- what industry to enter
b- why enter to industry
c- how enter to industry
d- Not all of the above

37 The production function shows the direct relation between the inputs the producer ………. and
the ………. of output.
a- Amount, need
b- Need, amount
c- Cost, need
d- Need, cost

38 Figure refer to:

a- Total product curve
b- Margin product curve
c- A and B
d- Not all of the above

39 The main reason for decreasing: The MP in the short run is that if we have a fixed
area of land it will reach to its optimal level of productivity if we reached to ideal
number of labor that achieve the specialization.
a- True
b- False

40 (Economies of scale) it arises when an increase in all inputs leads to a more-than-

proportional increase in the level of output.
a- Increasing return to scale
b- Constant return of scale
c- Decreasing return to scale
d- Not all of the above

41 it arise when an increase in all inputs leads to a less-than-proportional increase in the

 level of output
a- Increasing return to scale
b- Constant return of scale
c- Decreasing return to scale
d- Not all of the above

42 The characteristics of monopolistic

a- No barriers
b- Low barriers
c- High barriers
d- Very high barriers

43 The characteristics of monopoly

a- No barriers
b- Low barriers
c- High barriers
d- Very high barriers

44 At perfect competition the possible outcome If the price exceeds the average total cost of
producing the profit maximizing output, the firm makes an …………
a- Normal profit
b- Economic profit
c- Economic loss
d- Not all of the above

45 If a firm can affect the market price of its output, this refer to:
a- Perfect competition
b- Imperfect competition
c- Oligopoly
d- Monopoly

46 Top-down and bottom-up are both approaches for analysis and determine the mutual
relation between the company and the other external environment.
a- Person, internal
b- Company, internal
c- Person, external
d- Company, external

47 ……………… analysis takes a completely different approach.

a- Top down approach
b- Bottom up approach
c- A and B
d- Not all of the above

48 Bottom up approach refer to

 a- Macroeconomic
b- Microeconomic
c- A and B
d- Not all of the above

49 The objectives of macroeconomics are

a- Increase the output

b- Increase the employment
c- Sustaining price stability
d- All of the above

50 ……….. is calculated in constant or invariant prices.

a- Normal GDP
b- Real GDP
c- N.B real GDP
d- All of the above