Free Consumer Behaviour 01 Practice Test - 11th Grade - Commerce 

Question 1

Which one of the following is the most accurate definition of economics?

A. Economics is the study of stocks and bonds.
B. Economics is the study of how people allocate unlimited resources.
C. Economics is the study of how consumers choose to spend their income.
D. Economics is the study of how society chooses to allocate scarce resources.

SOLUTION

Solution : D

Economics is the study of how society chooses to allocate its scarce resources in order to satisfy unlimited wants.)

Question 2

The basic difference between macroeconomics and microeconomics is:

A. microeconomics concentrates on individual markets while macroeconomics focuses primarily on international trade.
B. microeconomics concentrates on the behavior of individual consumers while macroeconomics focuses on the behavior of firms.
C. microeconomics concentrates on the behavior of individual consumers and firms while macroeconomics focuses on the performance of the entire economy.
D. microeconomics explores the causes of inflation while macroeconomics focuses on the causes of unemployment.

SOLUTION

Solution : C

Microeconomics concentrates on the behavior of individual consumers and firms while macroeconomics focuses on the performance of the entire economy.

Question 3

The opportunity cost of watching television is:

A. all of the alternative programs that appear on other stations.
B. zero because there is no money expenditure involved.
C. the alternative use of the time foregone by watching the program.
D. zero if it benefits you

SOLUTION

Solution : C

The opportunity cost here is the time foregone by watching the television.

Question 4

According to marginal analysis, you should spend more time studying economics if the extra benefit from an additional hour of study:

A. is positive.
B. outweighs the extra cost.
C. exceeds the benefits of the previous hour of study.
D. will raise your exam score.

SOLUTION

Solution : C

You should spend more time if the additional hour offers an increase in satisfaction.

Question 5

Suppose that the following headlines appeared in a newspaper. Which would most clearly represent a macroeconomic issue?

A.

"Central Bank Raises Interest Rates"

B.

"Auto Dealership to Cut Prices"

C.

"Coffee Bean Crop Falls by 10 Percent"

D.

"United Workers Union to Strike April 15"

SOLUTION

Solution : A

Macroeconomics is that branch of Economics, which studies economic problems (or economic issues) relating to economy as a whole. Since Central bank is at the center of the entire banking system, this is an example of Macroeconomic variable.

Question 6

A professional basketball players' union negotiates a contract that dramatically increases all players' salaries. How would this influence the opportunity cost for a player who was considering giving up basketball to pursue a career in broadcasting?

A. it would not affect the opportunity cost of playing basketball or of broadcasting
B. it would increase the opportunity cost of continuing to play professional basketball
C. it would cause the production possibilities frontier to become convex
D. it would increase the opportunity cost of becoming a broadcaster

SOLUTION

Solution : D

Opportunity cost is the value of a factor in its next best use. With an increase in salary for playing basketball, if a player is considering giving up basketball to pursue a career in broadcasting, his opportunity cost of becoming a broadcaster will increase.

Question 7

If the economy is producing a combination of goods inside its production possibilities frontier, then

A.

workers are on vacation

B.

a significant number of workers have little education

C.

some resources are being wasted

D.

technology must improve before output can increase

SOLUTION

Solution : C

Any point inside the PPC indicates inefficient utilization of resources.

Question 8

Marginal Utility curve always

A. slopes downward
B. a drop in inflation
C. an increase in total production in India
D. an increase in the price of TATA Nano

SOLUTION

Solution : A

Marginal Utility curve always slopes downwards.

Question 9

A consumer gets maximum satisfaction where the ___ are same.

A. Total utility and marginal utility
B. Price of commodity and marginal utility
C. Price of commodity and total utility
D. (A) and (B) both

SOLUTION

Solution : C

A consumer gets maximum satisfaction from his limited income when the marginal utility per rupee spent is equal for all goods.

Question 10

Which of the following would be strictly a microeconomic topic?

A. a general rise in interest rates
B. a drop in inflation
C. an increase in total production in India
D. an increase in the price of TATA Nano

SOLUTION

Solution : D

Microeconomics studies economic problems relating to individual economic units like a consumer, or a producer. An increase in the price of TATA Nano is related to an individual unit, which makes it a microeconomics topic.
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