1. What is the central economic problem discussed in economics?

o A) Inflation
o B) Scarcity
o C) Demand
o D) Unemployment
Answer: B
2. What does the law of demand state?
o A) As price increases, quantity demanded increases
o B) As price increases, quantity demanded decreases
o C) As price decreases, supply decreases
o D) Price has no effect on quantity demanded
Answer: B
3. Which factor causes a shift in the demand curve?
o A) Change in price
o B) Change in taste
o C) Increase in cost of production
o D) None

4. Opportunity cost is defined as:

o A) The total cost of all resources used in production
o B) The next best alternative forgone when making a decision
o C) The amount of money spent on goods
o D) The difference between total revenue and total cost
Answer: B

5. Which of the following is a microeconomic question?

o A) Why is unemployment high in the country?
o B) How does a firm decide on the price of its product?
o C) What causes national inflation?
o D) How does trade policy affect the economy?
Answer: B

6. What is the role of the government in a mixed economy?

o A) It decides all production levels
o B) It leaves all decisions to the market
o C) It influences both consumer and business decisions
o D) It controls the pricing of all goods
Answer: C

7. In a perfectly competitive market, firms are:

o A) Price makers
o B) Price takers
o C) Monopoly holders
o D) Facing inelastic demand
Answer: B
8. If the price of a football increases from $10 to $12 and the quantity demanded
decreases from 100 units to 80 units, what is the absolute price elasticity of
demand (PED) where PED = %change in quantity demanded/% change in price?
o A) 0.8
o B) 1.0
o C) 1.25
o D) 1.5
Answer: 20%/20% = 1, answer B

9. A football club sold 200 tickets at $30 each. If the price increased to $40 and sales
dropped to 150 tickets, what is the price elasticity of demand where PED = %change
in quantity demanded/% change in price where IED = %change in quantity
demanded/% change in income?
o A) 0.5
o B) 0.75
o C) 1.0
o D) 1.5
Answer: 25%/33.33% = 0.75, answer B

10. If income increases by 10% and the demand for tickets rises by 15%, what is the
income elasticity of demand where IED = %change in quantity demanded/% change
in income?
o A) 0.5
o B) 1.0
o C) 1.5
o D) 2.0
Answer: 15/10 = 1.5, answer C

11. The cross-price elasticity of demand between tennis rackets and tennis balls is -0.5.
If the price of tennis rackets increases by 10%, how much will the demand for
tennis balls change where XED = %change in quantity demanded product A/%
change in price of product B?
o A) 0.5% increase
o B) 0.5% decrease
o C) 5% increase
o D) 5% decrease
Answer: -0.5 x 10 = -5%, answer D

12. If a firm produces 100 units of jerseys with fixed costs of $500 and variable costs of
$5 per unit, what is the total cost of production?
o A) $500
o B) $1,000
o C) $1,500
o D) $2,000
Answer: 500 + 500 = 1000, answer B

13. What happens when the price is set below the equilibrium price?
o A) There is a surplus of goods
 o B) There is a shortage of goods
o C) Prices will rise further
o D) Supply increases
Answer: B

14. If a sports club raises ticket prices by a small amount during the playoffs and yet
sells a lot less tickets, this is an example of:
o A) Elastic demand
o B) Inelastic demand
o C) Unit elasticity
o D) Cross-price elasticity
Answer: A

15. A football league operates in a monopolistic competition market. This means:

o A) It has many competitors offering identical products
o B) It has a few competitors offering differentiated products
o C) It is the only seller in the market
o D) It faces no competition
Answer: B

16. Why would a government impose a tariff on imported sports equipment?

o A) To lower prices for consumers
o B) To increase competition
o C) To protect domestic industries
o D) To reduce production costs
Answer: C

17. What is the impact of a subsidy on a sport company’s production?

o A) It reduces production costs
o B) It increases the price of products
o C) It decreases the total revenue
o D) It decreases the supply of products
Answer: A

18. A famous football player is transferred to a team for €200 million. What is the
opportunity cost for the club?
o A) The next best player they could have signed
o B) The number of jerseys sold
o C) The total profit from ticket sales
o D) The price of training facilities
Answer: A

19. If a city builds a new stadium for €100 million, but could have used that money to
improve public transport, what is the opportunity cost of the stadium?
o A) The improved public transport
o B) The maintenance of the stadium
o C) The revenue from ticket sales
 o D) The increase in tourism
Answer: A

20. A sport event manager decides to lower ticket prices by 10% and sees a 15%
increase in ticket sales. What type of demand does this indicate?
o A) Elastic
o B) Inelastic
o C) Perfectly inelastic
o D) Unit elastic
Answer: A

21. During a World Cup final, ticket prices rise significantly, but the quantity demanded
remains the same. This reflects:
o A) Elastic demand
o B) Inelastic demand
o C) Unitary demand
o D) Excess supply
Answer: B

22. A sports equipment manufacturer faces competition from imported goods. The
government imposes a quota limiting imports. What is the likely effect on the
domestic producer?
o A) Reduced total revenue
o B) Increased market share
o C) Lower prices
o D) Decreased production
Answer: B

23. Which of the following is an example of a negative externality in sports?

o A) Reduced ticket prices
o B) Pollution from a large stadium event
o C) Increased revenue from merchandise sales
o D) Subsidies for youth sport programs
Answer: B

24. Why would governments intervene in sport markets by subsidising stadium

construction?
o A) To decrease unemployment
o B) To attract international events and tourism
o C) To raise ticket prices
o D) To limit player salaries
Answer: B (A is a likely secondary impact)

25. In a perfectly competitive market, firms in the sports industry will:

o A) Have the ability to set prices
o B) Compete based on brand differentiation
o C) Have no influence on the market price
 o D) Earn significant profits in the long run
Answer: C

26. Which market structure best describes the global market for sport shoes
dominated by companies like Nike, Adidas, and Puma?
o A) Perfect competition
o B) Monopoly
o C) Monopolistic competition
o D) Oligopoly
Answer: D
27. What is the main difference between microeconomics and macroeconomics?

 A) Microeconomics deals with individual firms, while macroeconomics deals with

entire economies.
 B) Microeconomics focuses on government policy, while macroeconomics focuses on
firms.
 C) Microeconomics looks at entire economies, while macroeconomics looks at
specific industries.
 D) Microeconomics deals with global trade, while macroeconomics deals with local
trade.
Answer: A

28. Which market structure best describes a scenario where one firm dominates the
market and there are high barriers to entry?

 A) Perfect competition
 B) Monopoly
 C) Oligopoly
 D) Monopolistic competition
Answer: B

29. Which of the following would cause the demand curve for sports tickets to shift to
the right?

 A) An increase in ticket prices

 B) A successful season for the team
 C) A reduction in ticket prices
 D) An increase in the price of substitutes
Answer: B

30. What would a price ceiling set below the equilibrium price in the market for tickets
likely result in?

 A) A surplus of tickets
 B) A shortage of tickets
 C) An increase in ticket prices
 D) An equilibrium market
Answer: B
31. Which of the following statements about income elasticity of demand is true?

 A) Normal goods have negative income elasticity.

 B) Inferior goods have positive income elasticity.
 C) Inferior goods have negative income elasticity.
 D) Superior goods have zero income elasticity.
Answer: C

32. A firm producing coffee finds that as the price of tea increases, the demand for
coffee also rises. This relationship indicates:

 A) Negative cross-price elasticity

 B) Positive cross-price elasticity
 C) Unit elastic demand
 D) Price inelastic demand

Answer: B (they are substitutes)

33. If a government provides subsidies for youth sports programs, this is an example of:

 A) Market failure
 B) Negative externality
 C) Positive externality
 D) Opportunity cost
Answer: C although the existence of these programs are a sign of market failure, the
subsidy is to promote the positive externalities

34. In a situation where the market price of basketball shoes is $100, and the government
imposes a price floor of $120, what would be the likely market outcome?

 A) A surplus of shoes
 B) A shortage of shoes
 C) No change in the market
 D) Increased demand for shoes
Answer: A

35. If a sports company lowers prices by 10% and sees an increase in revenue, this
indicates that demand is:

 A) Inelastic
 B) Elastic
 C) Unit elastic
 D) Perfectly elastic
Answer: B

36. The cross-price elasticity of demand between golf clubs and golf balls is -0.8. If the
price of golf clubs increases by 5%, what will happen to the demand for golf balls
where XED = %change in quantity demanded product A/% change in price of product B?
  A) Demand will increase by 4%
 B) Demand will decrease by 4%
 C) Demand will increase by 8%
 D) Demand will decrease by 8%
Answer: B, -0.8 x 5% = -4%

37. What happens if a government imposes a tariff on imported footballs from a country
with comparative advantage in producing footballs?

 A) The price of imported footballs decreases

 B) The domestic industry becomes less competitive
 C) Consumers pay higher prices
 D) The demand for imported footballs increases
Answer: C

38. According to the law of comparative advantage, countries should:

 A) Produce goods where they have the absolute advantage

 B) Specialize in goods where they have a lower opportunity cost
 C) Restrict trade to protect domestic industries
 D) Maximize tariffs to benefit domestic markets
Answer: B

39. A country with a trade deficit will experience:

 A) A rising currency value

 B) A decreasing currency value
 C) No change in currency value
 D) Increased export growth
Answer: B

40. Why would a government impose a quota on imported sports equipment?

 A) To lower the domestic price

 B) To protect domestic producers
 C) To increase the supply of goods
 D) To improve the quality of imports
Answer: B

41. In the context of business strategy, what does the PESTLE analysis stand for?

 A) Product, Environment, Social, Technical, Leadership, Ethics

 B) Political, Economic, Social, Technological, Legal, Environmental
 C) Political, Ethical, Social, Technical, Legal, Environment
 D) Product, Economic, Social, Technical, Leadership, Ethics
Answer: B

42. What is one reason a firm might not engage in strategic planning?
  A) Lack of financial rewards
 B) High competition in the market
 C) High profit margins
 D) Government incentives
Answer: A

43. Which of the following describes corporate social responsibility (CSR)?

 A) Focusing solely on profit maximization

 B) Ignoring the impact on local communities
 C) Integrating social and environmental concerns into business operations
 D) Reducing product quality to cut costs
Answer: C

44. Which of the following is an example of a negative externality?

 A) Sponsorship of local sports teams

 B) Pollution from a new sports stadium
 C) Subsidising youth sports programs
 D) Free public broadcasts of sports events
Answer: B

45. Strategic management helps organisations by:

 A) Reacting to changes in the market

 B) Ignoring long-term planning in favour of short-term gains
 C) Proactively shaping their future direction
 D) Minimizing stakeholder involvement in decision-making
Answer: C

46. What role does government play in encouraging Corporate Social Responsibility
(CSR)?

 A) Mandating that all companies donate to charities

 B) Providing tax incentives and penalties to encourage ethical behaviour
 C) Controlling the pricing strategies of companies
 D) Promoting monopolies to foster CSR
Answer: B

47. A  How can CSR impact a company’s financial performance in the long term?

 A) It leads to immediate profit maximisation

 B) It creates short-term costs but builds long-term profitability through reputation and
customer loyalty
 C) It reduces costs by eliminating compliance needs
 D) It causes immediate revenue loss with no long-term gains
Answer: B

47. B  Price elasticity of demand measures:

  A) How much quantity demanded changes in response to a change in price
 B) How much the supply changes in response to a change in price
 C) The total revenue generated by a business
 D) The cost of producing goods
Answer: A

48. Which analysis tool is commonly used to understand the macro-environment of a

business?

 A) SWOT analysis
 B) PESTLE analysis
 C) Price elasticity analysis
 D) Cost-benefit analysis
Answer: B

49. Which of the following is a benefit of free trade?

 A) Reduced competition
 B) Higher prices for goods
 C) Greater efficiency through specialisation
 D) Less access to global markets
Answer: C

50. A tariff is defined as:

 A) A tax imposed on exports

 B) A restriction on the quantity of goods that can be imported
 C) A tax imposed on imports
 D) A subsidy given to domestic industries
Answer: C

Bonus question: A sports club sells tickets for its games. Only a limited number of seats
are available, and fans who don't buy tickets cannot enter the stadium. Based on these
characteristics, which of the following best describes the tickets sold by the sports club?

 A) Non-rival and non-excludable

 B) Rival and non-excludable
 C) Non-rival and excludable
 D) Rival and excludable

Answer: D)