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CA Foundation Managerial Economics — practice questions

Explore 51 free Managerial Economics questions in CA Foundation Business Economics. Open each question or exercise to read its content, reference answers and available explanation.

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Managerial Economics questions and exercises with answers

Showing questions 1–30 of 51.

Managerial economics applies economic methods to what?Read the answer and worked solution →Which branch of economics is the dominant focus behind managerial economics?Read the answer and worked solution →Managerial economics is said to act as a link between which two things?Read the answer and worked solution →Managerial decisions about the future, involving risk and uncertainty, depend on which activity?Read the answer and worked solution →One main purpose of managerial economics is better decisions when a firm faces what?Read the answer and worked solution →The second main purpose of managerial economics is to study planning effects on what?Read the answer and worked solution →Which problem do managerial economics tools help solve?Read the answer and worked solution →Which quantitative technique is named as drawn on heavily by managerial economics?Read the answer and worked solution →By the law of supply and demand, a rise in price leads to what?Read the answer and worked solution →If a good sells at a higher price, how do sellers generally respond?Read the answer and worked solution →Excess demand exists when quantity demanded is greater than what?Read the answer and worked solution →Where there is excess demand for a good, what can sellers benefit from doing?Read the answer and worked solution →Production theory says a firm will try to use which input mix?Read the answer and worked solution →Hiring new staff over training old staff when unemployment is high reflects what?Read the answer and worked solution →Before raising a price, a manager should evaluate which measure?Read the answer and worked solution →In managerial economics, which area uses investment theory to examine a firm's capital purchasing decisions?Read the answer and worked solution →Transfer pricing and price discrimination decisions belong to which area of managerial economics?Read the answer and worked solution →Estimating a firm's cost function and optimum factor allocation falls under which area of managerial economics?Read the answer and worked solution →Microeconomics studies the behavior of whom in allocating scarce resources?Read the answer and worked solution →Which branch of economics focuses on growth, inflation and unemployment for the overall economy?Read the answer and worked solution →Microeconomics studies individual markets, sectors or industries, as opposed to what?Read the answer and worked solution →Microeconomics is also known by which name that stresses the role of prices?Read the answer and worked solution →Partial equilibrium theory in microeconomics was introduced by which economist?Read the answer and worked solution →In microeconomic theory, rational preferences are described as having which pair of properties?Read the answer and worked solution →The utility maximization problem has an individual maximize utility subject to which limit?Read the answer and worked solution →A situation where markets fail to produce efficient outcomes is called what?Read the answer and worked solution →Which item is given as a classic example of suboptimal resource allocation under market failure?Read the answer and worked solution →A market where numerous small firms sell identical products is called what?Read the answer and worked solution →Which feature is part of market structure, with firm numbers and product uniformity?Read the answer and worked solution →The opportunity cost of an activity equals the value of which alternative?Read the answer and worked solution →

Worked practice questions

Managerial economics applies economic methods to what?

  1. Organizational decisions
  2. National tax collection
  3. Household budget plans
  4. Printing of currency
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Correct answer: A. Organizational decisions

It is the branch that brings economic tools into the decisions a business or other organization has to make.

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Which branch of economics is the dominant focus behind managerial economics?

  1. Macroeconomics
  2. Econometrics
  3. Microeconomics
  4. Public finance
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Correct answer: C. Microeconomics

Managerial economics draws mainly on firm-level and consumer-level theory such as demand, supply and costs, which is microeconomics.

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Managerial economics is said to act as a link between which two things?

  1. Government and citizens
  2. Banks and borrowers
  3. Exports and imports
  4. Theory and practice
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Correct answer: D. Theory and practice

It carries economic theory into the practical work of managers, so it bridges theory and practice.

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More Business Economics topics

Price-Output Determination under Different Market FormsTheory of Consumer BehaviourSupplyTheory of ProductionProduction And CostPublic FinanceBusiness CyclesBasic Problems of an Economy and Role of Price Mechanism