100 MCQs on Managerial Economics
1. 1. Managerial Economics is best described as:
A) Pure science
B) Normative economics
C) Applied economics
D) Abstract theory
**Answer: C**
2. 2. Which of the following is *not* a feature of managerial economics?
A) Microeconomic in nature
B) Abstract and theoretical
C) Goal-oriented
D) Practical and analytical
**Answer: B**
3. 3. Managerial Economics primarily deals with:
A) National income and inflation
B) Individual and firm-level decision making
C) Government policies
D) Agricultural outputs
**Answer: B**
4. 4. Which principle is related to comparing additional cost with additional benefit?
A) Equi-Marginal Principle
B) Opportunity Cost Principle
C) Incremental Principle
D) Discounting Principle
**Answer: C**
5. 5. The opportunity cost principle is based on:
A) The highest price of production
B) Revenue generated from sales
C) Value of the next best alternative foregone
D) Cost of labor only
**Answer: C**
6. 6. Equi-marginal principle helps in:
A) Understanding total revenue
B) Allocating resources efficiently
C) Calculating average cost
D) Estimating taxes
**Answer: B**
7. 7. Which principle emphasizes the value of money over time?
A) Opportunity Cost Principle
B) Time Perspective
C) Discounting Principle
D) Incremental Principle
**Answer: C**
8. 8. The Time Perspective Principle helps in:
A) Focusing only on short-run decisions
B) Balancing long-run and short-run outcomes
C) Ignoring past costs
D) Determining fixed costs
**Answer: B**
9. 9. Which of the following tools is *not* generally used in managerial economics?
A) Optimization
B) Statistical tools
C) Legal analysis
D) Econometric models
**Answer: C**
10. 10. The Incremental Principle compares:
A) Total revenue with total cost
B) Additional revenue with additional cost
C) Average revenue with marginal cost
D) Fixed cost with variable cost
**Answer: B**
11. 11. Demand is defined as:
A) Desire to buy a good
B) Ability to buy a good
C) Both desire and ability to buy a good
D) Quantity available in the market
**Answer: C**
12. 12. Which of the following is *not* a determinant of demand?
A) Price of the good
B) Consumer income
C) Weather
D) Quantity supplied
**Answer: D**
13. 13. The demand function expresses the relationship between:
A) Price and supply
B) Price and cost
C) Price and quantity demanded
D) Cost and profit
**Answer: C**
14. 14. Elasticity of demand measures:
A) How supply responds to price changes
B) How demand changes with income
C) How demand responds to price changes
D) How cost changes with output
**Answer: C**
15. 15. If a good has elastic demand, a small change in price leads to:
A) No change in quantity demanded
B) A large change in quantity demanded
C) A small change in quantity demanded
D) Zero quantity demanded
**Answer: B**
16. 16. Inelastic demand implies:
A) Quantity demanded is very sensitive to price
B) Quantity demanded changes proportionally with price
C) Quantity demanded changes little when price changes
D) Demand remains constant
**Answer: C**
17. 17. Which of these is *not* a type of demand elasticity?
A) Price elasticity
B) Income elasticity
C) Cross elasticity
D) Supply elasticity
**Answer: D**
18. 18. Cross elasticity of demand refers to changes in:
A) Demand of a good due to its own price change
B) Demand of one good due to price change of another
C) Income levels of consumers
D) Total utility
**Answer: B**
19. 19. Which of the following goods is most likely to have perfectly inelastic demand?
A) Luxury cars
B) Essential medicines
C) Smartphones
D) Airline tickets
**Answer: B**
20. 20. A horizontal demand curve indicates:
A) Perfectly elastic demand
B) Perfectly inelastic demand
C) Unit elastic demand
D) Negative demand
**Answer: A**
Remaining MCQs (21-100)
More MCQs will be added in subsequent sections...
