Assignment -1

Student USN: 232VMBR04118

Student Name :Divya s

Subject : 23VMB0C101 - PRINCIPLES OF ECONOMICS AND MARKETS

1. What is the primary determinant of demand for a product?

A. Price of the product.
B. Income of consumers.
C. Government regulations.
D. Production costs.
Correct Answer : B | Selected Answer : A
2. Which of the following is considered a factor of production?
A. Demand.
B. Labor.
C. Price.
D. Profit.
Correct Answer : B | Selected Answer : B
3. Which of the following is not a type of market structure?
A. Competitive monopoly
B. Oligopoly
C. Perfect Competition
D. Monopoly
Correct Answer : A | Selected Answer : A
4. How does scarcity impact consumer decision-making?
A. It reduces the need for trade-offs.
B. It eliminates the concept of opportunity cost.
C. It forces consumers to make choices about how to allocate their limited resources.
D. It ensures that consumers can fulfill all their wants and needs without constraints
Correct Answer : C | Selected Answer : C
5. In a monopolistic competition market structure, firms have which features?
A. Identical products.
B. Many sellers.
C. Price-setting power.
D. High barriers to entry
Correct Answer : C | Selected Answer : B
6. Economics is termed as the “science of wealth". Which economist gave this meaning?
A. Adam Smith
 B. Alfred Marshall,
C. Robbins
D. Paul Samuelson
Correct Answer : A | Selected Answer : A
7. Which of the following is an example of a fixed cost for a firm?
A. Raw materials.
B. Labor wages.
C. Rent for factory space.
D. Electricity bills.
Correct Answer : C | Selected Answer : C
8. How does a decrease in the price of a substitute good affect the demand for the original good?
A. It decreases the demand for the original good.
B. It increases the demand for the original good.
C. It has no effect on the demand for the original good.
D. It reduces the availability of the original good
Correct Answer : B | Selected Answer : A
Which of the following is an example of an opportunity cost for a student who chooses to study for an
9. exam rather than going to a party?
A. The cost of purchasing study materials.
B. he enjoyment of spending time with friends at the party.
C. The potential grade achieved on the exam.
D. The time spent studying for the exam
Correct Answer : B | Selected Answer : B
10. What does the term "production function" refer to?
A. The relationship between output and input prices.
B. The process of converting raw materials into finished goods.
The mathematical representation of the relationship between inputs and outputs in
C.
production.
D. The amount of profit generated by a firm's production process. Correct
Answer : C | Selected Answer : C
11. What is the significance of demand estimation for businesses?
A. It helps businesses identify production costs.
B. It assists businesses in forecasting future demand for their products.
C. It determines the level of competition in the market.
D. It guides businesses in setting government policies. Correct Answer : B | Selected
Answer : B
12. What is the law of supply?
 A. As the price of a good increases, the quantity supplied decreases.
B. As the price of a good decreases, the quantity supplied also decreases.
C. As the price of a good increases, the quantity supplied also increases.
D. As the price of a good decreases, the quantity supplied increases. Correct Answer : C |
Selected Answer : C
13. What is the main goal of profit maximization for firms?
A. To increase market share.
B. To minimize costs.
C. To produce the highest level of output.
D. To maximize net income
Correct Answer : D | Selected Answer : D
14. How does microeconomics differ from macroeconomics?
Microeconomics focuses on individual economic agents, while macroeconomics studies
A.
the economy as a whole.
Microeconomics examines long-term economic trends, while macroeconomics analyzes
B.
short-term fluctuations.
Microeconomics deals with international trade, while macroeconomics studies domestic
C.
economic policies.
Microeconomics studies government interventions in the economy, while macroeconomics
D.
focuses on market mechanisms Correct
Answer : A | Selected Answer : A
15. What is the primary concern of microeconomics?
A. The study of individual consumer behavior.
B. The analysis of aggregate economic indicators.
C. The examination of government fiscal policies.
D. The investigation of international trade patterns.
Correct Answer : A | Selected Answer : A
16. Which of the following best defines scarcity?
A. The abundance of resources compared to human wants.
B. The situation where human wants exceed available resources.
C. The equitable distribution of resources among individuals.
D. The absence of trade-offs in decision-making. Correct Answer : B | Selected Answer :
B
17. Which of the following is a basic economic problem?
A. How to distribute resources fairly.
B. How to eliminate scarcity altogether.
 C. How to maximize profits in a market.
D. How to allocate limited resources to satisfy unlimited wants. Correct Answer : D |
Selected Answer : D
18. What is the primary characteristic of a perfectly competitive market?
A. Few sellers.
B. Homogeneous products.
C. High barriers to entry.
D. Price-setting power
Correct Answer : B | Selected Answer : B
19. In a monopolistic competitive market, how do firms achieve some degree of market power?
A. By producing differentiated products
B. Because of barriers to exit from the industry
C. By virtue of size alone
D. Because of barriers to entry to the industry Correct Answer : A | Selected Answer : A
20. Which of the following is an example of a variable input in the production process?
A. Factory rent.
B. Machinery.
C. Labor.
D. Property taxes
Correct Answer : C | Selected Answer : C
21. Which of the following scenarios illustrates a trade-off?
A. Choosing between watching a movie and reading a book.
B. Receiving a bonus at work for outstanding performance.
C. Winning a lottery jackpot and quitting one's job.
D. Buying a new car with cash instead of financing it Correct Answer : A | Selected
Answer : D
22. Which of the following is a determinant of supply?
A. Consumer preferences.
B. Technological advancements.
C. Income of consumers.
D. Availability of substitutes.
Correct Answer : B | Selected Answer : B
23. What does the concept of opportunity cost represent?
A. The total revenue earned from selling a product.
B. The next best alternative given up when a choice is made.
C. The fixed costs associated with production.
D. The government subsidies provided to businesses. Correct Answer : B | Selected
Answer : B
24. What is a characteristic of an oligopoly market structure?
A. Few sellers.
B. Homogeneous products.
C. Low barriers to entry.
D. Price-setting power
Correct Answer : D | Selected Answer : A
25. What is the primary objective of production?
A. To maximize costs.
B. To minimize output.
C. To maximize profits.
D. To minimize efficiency.
Correct Answer : C | Selected Answer : C
26. What is the meaning of demand forecasting?
A. Estimating future consumer preferences.
B. Predicting future changes in government policies.
C. Anticipating future demand for goods and services.
D. Analyzing past market trends.
Correct Answer : C | Selected Answer : C
27. What does the market equilibrium analysis focus on?
A. Predicting future market trends.
B. Analyzing the relationship between supply and demand.
C. Understanding consumer preferences.
D. Examining government interventions in the market Correct Answer : B | Selected
Answer : B
28. Which of the following factors is likely to increase the demand for smartphones?
A. A decrease in consumers' incomes.
B. A rise in the price of smartphones.
C. An increase in the popularity of mobile gaming.
D. A decrease in the price of laptops.
Correct Answer : C | Selected Answer : C
29. Define elasticity of demand.
A. It measures the responsiveness of quantity demanded to changes in price.
B. It determines the impact of government regulations on market equilibrium.
C. It analyzes the relationship between supply and demand in a market.
D. It studies the long-term trends in consumer preferences Correct Answer : A | Selected
Answer : A
30. Which of the following statements best describes managerial economics?
A. It focuses on analyzing the effects of government policies on the economy.
B. It examines the behavior of individual consumers and producers in the market.
C. It involves the application of economic theory to managerial decision-making.
D. It studies the interactions between countries in international trade.
Correct Answer : C | Selected Answer : C