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# CA Foundation | Introduction MCQ Test | Chanakya Commerce Classes

CA Foundation Paper 4 Business Economics Chapter 1 Unit 1 Introduction MCQ test page with instant scoring by Chanakya Commerce Classes.

Canonical URL: https://www.chanakyaclasses.com/mcqs/business-economics-introduction

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Business Economics MCQ
Chapter 1 · Unit 1 · Introduction
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CA Foundation · Paper 4 · Business Economics
Chapter 1 · Unit 1 ·
Introduction
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Question 01
The term Economics mainly deals with the use of scarce resources to satisfy ________.
limited wants
unlimited wants
only business wants
government wants only
Economics studies how relatively scarce resources are allocated to satisfy competing unlimited wants.
Question 02
The Greek word from which Economics is derived is:
Polis
Nomos
Oikonomia
Agora
Economics comes from the Greek word
Oikonomia
, meaning household.
Question 03
Before the nineteenth century, Economics was generally known as:
Political Economy
Social Science
Business Science
Commerce Theory
Till the 19th century, Economics was commonly known as Political Economy.
Question 04
Which of the following best describes Business Economics?
Study of taxation only
Study of international trade only
Study of national income only
Use of economic analysis in business decision-making
Business Economics means applying economic logic and analysis to business decisions involving scarce resources.
Question 05
Another name for Business Economics is:
Welfare Economics
Managerial Economics
Political Economy
Public Economics
Business Economics is also known as Managerial Economics.
Question 06
Which branch of economics studies individual units such as consumers and firms?
Micro Economics
Macro Economics
Public Finance
Economic History
Micro Economics studies behaviour of individual consumers, firms and specific markets.
Question 07
Macro Economics studies:
pricing of a single product
behaviour of one consumer
overall economic aggregates such as output and employment
only profits of firms
Macro Economics studies the economy as a whole: output, employment, saving, investment, trade and growth.
Question 08
Which of the following is a subject matter of Micro Economics?
National income
Balance of payments
General price level
Consumer behaviour
Micro Economics covers product pricing, consumer behaviour, factor pricing, firm behaviour and location of industry.
Question 09
Which of the following is an area of Macro Economics?
Factor pricing
National income and national output
Behaviour of firms
Location of industry
National income, general price level, trade balance, employment and economic growth are macro areas.
Question 10
Business Economics is based largely on:
Micro Economics
Macro Economics only
Economic history
Mathematical statistics only
Business Economics mainly relies on Micro Economics, though macro factors also matter in business environment.
Question 11
Which statement about the nature of Business Economics is correct?
It is purely theoretical and never practical
It ignores real world business problems
It is only descriptive and never prescriptive
It bridges the gap between theory and practice
Business Economics applies economic logic to real business decisions and bridges theory with practice.
Question 12
Business Economics is generally regarded as:
only positive science
purely abstract science
normative or prescriptive in nature
unrelated to policy formulation
Business Economics is mostly normative or prescriptive because it helps in policy formulation, decision-making and planning.
Question 13
Which one is a practical decision problem in Business Economics?
How much should be the optimum output and at what price should the firm sell?
How many continents are there in the world?
What is the national anthem?
How to classify stars in astronomy?
Business Economics addresses business choices such as output, pricing, input procurement, production method and market strategy.
Question 14
The interdisciplinary nature of Business Economics means it draws from:
Economics alone
Economics along with other disciplines like mathematics, statistics, accounting and finance
Literature and poetry only
Biology alone
Business Economics is interdisciplinary because it uses ideas and tools from economics and other related disciplines.
Question 15
The scope of Business Economics includes two broad categories of issues:
short-run and long-run issues
domestic and foreign issues
private and public issues
internal operational issues and external environmental issues
The scope of Business Economics covers microeconomics applied to internal issues and macroeconomics applied to external or environmental issues.
Question 16
Which of the following is an example of an internal operational issue?
Choice of production technique
Stage of business cycle
General price level
Type of economic system
Production technique, pricing, output, make-or-buy and procurement decisions are internal operational issues.
Question 17
Which of the following is an external environmental issue for business?
How much output to produce
Whether to make or buy a component
Stage of business cycle
Which customer segment to focus on
Macro factors like economic system, stage of business cycle and government policy shape the external business environment.
Question 18
Scarcity in Economics means:
resources do not exist at all
resources are limited relative to wants
people do not want goods
goods have no utility
Scarcity means resources are limited while human wants are unlimited, so choices have to be made.
Question 19
Decision-making in business refers to:
choosing any option randomly
avoiding all alternatives
accepting every alternative
selecting the most suitable alternative from available options
Decision-making means evaluating feasible alternatives and choosing the one that best helps attain the objective.
Question 20
Which statement is most correct about Business Economics?
It combines economic theory with business practice for rational decision-making
It is useful only for government departments
It ignores scarce resources
It deals only with accounting entries
Business Economics applies economic theory, logic and analytical tools to business practice and decision-making.
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MCQ Master Model · Chapter 1 · Unit 1 · Introduction