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Free Microeconomics MCQs with Answers

1,742 Microeconomics MCQs from Economics, each with the correct answer and a written explanation of why it is correct. Free and unlimited, with no account needed.

Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.

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1,742 questions · page 46 of 88

901. All of the following are ways that marketing plays a key role in the company's strategic planning EXCETP ?

  • A. marketing provides a guiding philosophy
  • B. marketing is the only discipline that can provide a formal structure for the planning effort
  • C. marketing provides inputs to strategic planners by helping to identify attractive market opportunities
  • D. within individual business units marketing designs strategies for reaching the unit's objectives

Explanation: Marketing contributes a guiding philosophy, identifies market opportunities, and develops strategies within business units.

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Correct answer: marketing is the only discipline that can provide a formal structure for the planning effort

902. According to the text the most dramatic of the environments that affect marketing and appears to be now shaping our world is the ___________ environment?

  • A. natural
  • B. demographic
  • C. economic
  • D. technological

Explanation: The technological environment has dramatically transformed products, communication, production, and marketing practices, making it a major…

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Correct answer: technological

903. A _________ is a need that is sufficiently pressing to direct the person to seek satisfaction?

  • A. motive
  • B. want
  • C. demand
  • D. requirement

Explanation: A motive is a need that has become strong enough to direct a person toward seeking satisfaction.

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Correct answer: motive

904. The purpose of strategic planning is to find ways in which the company can best ?

  • A. overcome losses
  • B. use its strengths to take advantage of attractive opportunities in the environment
  • C. avoid paying taxes
  • D. avoid the expense of costly research and development while still getting the benefits

Explanation: Strategic planning matches a firm’s internal strengths with attractive opportunities in its external environment.

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Correct answer: use its strengths to take advantage of attractive opportunities in the environment

905. Even through buying roles in the family change constantly the _________ has traditionally been the main purchasing agent for the family?

  • A. wife
  • B. husband
  • C. teenage children
  • D. grandparent

Explanation: The wife has traditionally been treated in consumer-behaviour studies as the family’s main purchasing agent, although modern household…

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Correct answer: wife

906. A _______ is a promotion strategy that calls for using the sales force and trade promotion to move the produce through channels ?

  • A. push strategy
  • B. pull strategy
  • C. blocking strategy
  • D. integrated strategy

Explanation: A push strategy uses the company’s sales force and trade promotions to persuade intermediaries to carry and move the product through the…

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Correct answer: push strategy

907. According to the price/quality strategy matrix when a company overprices its product in relation to its quality it is considered to be using which type of strategy ?

  • A. Good-value strategy
  • B. Premium strategy
  • C. Overcharging strategy
  • D. Snob strategy

Explanation: In the price-quality matrix, overcharging means charging a relatively high price for a product whose quality does not justify it.

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Correct answer: Overcharging strategy

908. In evaluating messages for advertising telling how the product is better than the competing brands aims at making the ad ?

  • A. meaningful
  • B. distinctive
  • C. believable
  • D. remembered

Explanation: Showing how a product is better than competing brands makes the advertisement distinctive by highlighting its difference.

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Correct answer: distinctive

909. According to Engel's law as income rises ?

  • A. The percentage spent on food rises
  • B. The percentage spent on housing increases
  • C. The percentage spent on other categories increase
  • D. The percentage spent on savings remains constant

Explanation: Engel’s law states that as income rises, the percentage spent on food falls, leaving a greater share for non-food categories such as…

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Correct answer: The percentage spent on other categories increase

910. A set of interdependent organizations involved in the process of making a product or service available for use or consumption by the consumer or business user is called a(n) ?

  • A. retailer
  • B. wholesaler
  • C. distribution channel
  • D. logistics

Explanation: A distribution channel is the network of interdependent organizations that moves a product or service from producer to final user.

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Correct answer: distribution channel

911. Rolls Royce uses which of the following distribution formats ?

  • A. Intensive distribution
  • B. Exclusive distribution
  • C. Selective distribution
  • D. Open distribution

Explanation: Rolls-Royce uses exclusive distribution because its luxury vehicles are offered through a very limited number of authorised dealers.

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Correct answer: Exclusive distribution

912. If the field salesforce has been supplied with new leads (via the telephone) that have been qualified, they have probably been assisted by ?

  • A. master salespersons
  • B. sales assistants
  • C. technical support persons
  • D. telemarketers

Explanation: Telemarketers contact potential customers by telephone, qualify their interest and pass promising leads to the field salesforce.

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Correct answer: telemarketers

913. The stage is the product life cycle that focuses on expanding market and creating product awareness and trails is the ?

  • A. decline stage
  • B. introduction stage
  • C. growth stage
  • D. maturity stage

Explanation: The introduction stage is when a product is launched, so the firm concentrates on building awareness, encouraging trials and expanding the…

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Correct answer: introduction stage

914. A __________ is a brand created and owned by a reseller of a product of service ?

  • A. licensed brand
  • B. manufacturer's brand private brand
  • C. private brand
  • D. co-brand

Explanation: A private brand is developed and owned by a reseller, such as a retailer, rather than by the manufacturer.

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Correct answer: private brand

915. The fact that services are sold, produced and consumed at the same time refers to which of the following service characteristics ?

  • A. Intangibility
  • B. Inseparability
  • C. Variability
  • D. Perishability

Explanation: Inseparability means a service is generally produced and consumed simultaneously, so the provider and customer often participate in the…

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Correct answer: Inseparability

916. Many U.S firms have sought relief from foreign competition by demanding protectionism policies by the U.S government. A better way for companies to compete is to expand into foreign markets and ?

  • A. lower prices
  • B. increase promotion both at home and abroad
  • C. continuously improve their products at home
  • D. join into cartels at home

Explanation: Continuous product improvement helps firms compete internationally through better quality and customer value rather than relying on…

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Correct answer: continuously improve their products at home

917. _________ is a principle of enlightened marketing that requires that a company seek real product and marketing improvements ?

  • A. Innovative marketing
  • B. Consumer oriented marketing
  • C. value marketing
  • D. Sense of mission marketing

Explanation: Innovative marketing requires a firm to pursue genuine improvements in its products and marketing methods instead of merely making…

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Correct answer: Innovative marketing

918. ________ are ads that appear while subscribers are surfing online services or Web sites, including banners, pop-up windows, tickers and roadblocks?

  • A. Online infomercials
  • B. Online ads
  • C. Online broadcasts
  • D. Online bullets

Explanation: Online ads are digital advertisements displayed on websites or online services, including banners, pop-ups, tickers, and roadblocks.

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Correct answer: Online ads

919. When a company enters a new product category for which its current brand names are not appropriate it will likely follow which of the following brand strategies ?

  • A. Product extensions
  • B. Line extensions
  • C. Brand extensions
  • D. New brands

Explanation: When existing brand names do not suit a new product category, the firm introduces a new brand.

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Correct answer: New brands

920. Wal-Mart owned Sam's club is an example of a retail called a(n) ?

  • A. factory outlet
  • B. super specialty store
  • C. seconds store
  • D. warehouse club

Explanation: Sam's Club operates on a membership basis and sells goods in bulk, which are defining features of a warehouse club.

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Correct answer: warehouse club
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