Introduction to Economics Quiz

Modern economists claim that economics is a positive science.

Classical and neoclassical economists view economics as a normative science.

Cossa suggests that science and art are complementary to each other in economics.

<p>Economics focuses on theoretical aspects, while business economics focuses on practical aspects.</p> Signup and view all the answers

<p>Business economics is primarily associated with micro-economic concepts.</p> Signup and view all the answers

<p>Economics has a wider scope, while business economics has a restricted scope focusing on specific applications.</p> Signup and view all the answers

<p>Business economics deals with both economic and some non-economic aspects, while economics mainly focuses on economic aspects.</p> Signup and view all the answers

<p>Business economics selectively applies economic models with necessary modifications to solve business problems.</p> Signup and view all the answers

<p>Business Economics aids in making informed decisions by analyzing economic data and trends.</p> Signup and view all the answers

<p>It helps in the efficient allocation of scarce resources within the firm.</p> Signup and view all the answers

<p>Demand forecasting enables accurate predictions of the demand for products and services.</p> Signup and view all the answers

<p>It helps in understanding different market structures and their impact on business operations.</p> Signup and view all the answers

<p>It aids in understanding and controlling costs, which improves profitability.</p> Signup and view all the answers

<p>Managerial preferences may subjectively influence final decisions, as individual biases can affect outcomes.</p> Signup and view all the answers

<p>The reliability of business analysis depends on the accuracy of financial accounting information, which can be flawed.</p> Signup and view all the answers

<p>Pricing strategies guide firms in setting optimal prices based on market conditions and competition.</p> Signup and view all the answers

<p>Robbins defines economics as the science that studies human behavior as a relationship between ends and scarce means that have alternative uses.</p> Signup and view all the answers

<p>Paul Samuelson defines economics as the study of how people and society choose to employ scarce productive resources to produce commodities for consumption.</p> Signup and view all the answers

<p>Economics is based on systematic study of knowledge and develops relationships between cause and effect.</p> Signup and view all the answers

<p>Positive science deals with real activities and provides solutions to what is, was, or will be.</p> Signup and view all the answers

<p>Normative science addresses what ought to be and offers suggestions for problems, while positive science focuses on what is.</p> Signup and view all the answers

<p>An example of a positive statement is that the life expectancy at birth in India is gradually rising.</p> Signup and view all the answers

<p>A normative statement relevant to India is that illiteracy is a curse for the Indian economy.</p> Signup and view all the answers

<p>Universally accepted laws in economics help establish a foundation for making predictions and analyzing relationships.</p> Signup and view all the answers

<p>The central economic problem is scarcity, where limited resources are insufficient to satisfy unlimited human wants.</p> Signup and view all the answers

<p>The four basic economic problems are what to produce, how to produce, for whom to produce, and provisions for economic growth.</p> Signup and view all the answers

<p>'What to produce?' involves deciding the types of goods and services to be produced, such as capital goods or consumer goods.</p> Signup and view all the answers

<p>The decision of 'How to produce?' is influenced by the availability of factors of production and their relative costs, impacting whether labor or capital intensive methods are used.</p> Signup and view all the answers

<p>'For whom to produce?' addresses the distribution of goods and services, determining who receives what output.</p> Signup and view all the answers

<p>Microeconomics primarily focuses on the behavior and decision-making of individual households and firms within specific market segments.</p> Signup and view all the answers

<p>Macroeconomics deals with the overall behavior and performance of the economy as a whole, rather than individual segments.</p> Signup and view all the answers

<p>Society must consider future resource availability and demand when deciding how to provision for economic growth.</p> Signup and view all the answers

<p>Macroeconomics addresses issues like inflation and national income.</p> Signup and view all the answers

<p>The availability of resources determines the choices an economy can make in satisfying its wants and managing scarcity.</p> Signup and view all the answers

<p>A society may decide to produce more consumer goods like cell phones over capital goods like machinery based on market demand.</p> Signup and view all the answers

<p>Microeconomics typically tackles problems related to demand, supply, and pricing of products and factors of production.</p> Signup and view all the answers

<p>Microeconomics is used to regulate the prices of a product and the prices of factors of production.</p> Signup and view all the answers

<p>In microeconomics, full employment is a presupposition that suggests all available labor resources are being utilized.</p> Signup and view all the answers

<p>The misconception is that what is true for the aggregate economy may not hold true for individual participants.</p> Signup and view all the answers

<p>Business Economics consists of using economic modes of thought to analyze business situations.</p> Signup and view all the answers

<p>Households provide factors of production to firms, and firms provide goods and services to households.</p> Signup and view all the answers

<p>The government collects taxes, provides public goods and services, and redistributes income.</p> Signup and view all the answers

<p>Neither the households save from their incomes, nor the firms save from their profits.</p> Signup and view all the answers

<p>Households and firms pay taxes to the government, which then pays for public goods and services.</p> Signup and view all the answers

<p>The four-sector model includes a foreign sector that engages in international trade and finance.</p> Signup and view all the answers

<p>The foreign sector affects the economy through trade balance, foreign investments, and exchange rates.</p> Signup and view all the answers

<p>Firms pay wages, rent, interest, and profits to households for the factors of production they provide.</p> Signup and view all the answers

<p>Public goods and services are provided by the government to households and firms, funded by tax revenues.</p> Signup and view all the answers