Managerial Economics - 22

LIST OF ATTEMPTED QUESTIONS AND ANSWERS

True/False
Question The damage being done by the factories at and around Agra to Taj Mahal is an example of social cost for private benefit.
Correct Answer True
Your Answer True

Multiple Choice Single Answer
Question The Risk theory of profit was developed by
Correct Answer Hawley
Your Answer Hawley

Multiple Choice Multiple Answer
Question Index numbers may broadly be classified as
Correct Answer Price indices , Quantity indices , Special purpose indices
Your Answer Price indices , Quantity indices , Special purpose indices

Multiple Choice Single Answer
Question Expansion of supply is shown by the movement in the supply curve which is
Correct Answer upward
Your Answer upward

Multiple Choice Multiple Answer
Question Forms of Public Enterprises
Correct Answer departmental management , company management or management by boards , public corporations
Your Answer departmental management , company management or management by boards , public corporations

Select The Blank
Question The financing of ________ goods is done through public expenditure.
Correct Answer public
Your Answer public

Multiple Choice Single Answer
Question A Joint- Stock Company is owned by its share holders but it is managed by
Correct Answer Board of Directors
Your Answer Board of Directors

Multiple Choice Multiple Answer
Question The examples of negative externalities are
Correct Answer nuclear power plants , gargantuan trucks , unsafe factories
Your Answer nuclear power plants , gargantuan trucks , unsafe factories

Match The Following
Question Correct Answer Your Answer

Reduction in demand due to a new substitute in market Uncertainity Uncertainity

Accounting profit Explicit costs Explicit costs

Economic profit Pure profit Pure profit

Risk taking theory Hawley Hawley


Multiple Choice Single Answer
Question Peas & beas, groundnut oil & til oil, tea & coffee are examples of
Correct Answer substitutes goods
Your Answer complimentary goods

Select The Blank
Question Output rises in a lesser proportion to that of the increase in input, under the case of ________.
Correct Answer decreasing returns to scale
Your Answer decreasing returns to scale

True/False
Question A monopolist in a price maker.
Correct Answer True
Your Answer True

Select The Blank
Question The chemical effluents recklessly released by a chemical factory in the river causing water pollution, is an example of ________ cost.
Correct Answer social
Your Answer environmental

True/False
Question The financing of the pure public goods has to be through public expenditure and not through market pricing.
Correct Answer True
Your Answer True

Multiple Choice Single Answer
Question A firm is a unit of production, where production is done with the aim to maximize
Correct Answer profits
Your Answer profits

Select The Blank
Question By ' profits', the economist means total revenue minus ________.
Correct Answer All costs
Your Answer Explicit costs

Multiple Choice Multiple Answer
Question Cost-Benefit Analysis is
Correct Answer The analysis undertaken to judge the investment of any project , Refers to finding out the worth of investment , Enable ranking of optional investments
Your Answer The analysis undertaken to judge the investment of any project , Refers to finding out the worth of investment , Enable ranking of optional investments

True/False
Question Giffen goods are superior goods.
Correct Answer False
Your Answer False

Multiple Choice Multiple Answer
Question The railways use a lot of coal in firing the steam locomotives. This act causes
Correct Answer a lot of sufferings to the people near the railway. , cost to the society. , no cost to the railways.
Your Answer a lot of sufferings to the people near the railway. , cost to the society. , no cost to the railways.

Multiple Choice Single Answer
Question All the buyers and sellers operating under perfect competition have knowledge
Correct Answer perfect
Your Answer perfect

Multiple Choice Multiple Answer
Question Marginal cost pricing explains that the
Correct Answer Price charged should be equal to the marginal cost , Cost price sets the lower limits for firm’s price , Cost price ensures the possible level of profitability
Your Answer Price charged should be equal to the marginal cost , Cost price sets the lower limits for firm’s price , Cost price ensures the possible level of profitability

True/False
Question The question regarding the nature and quantities of commodities to be produced is solely restricted to capitalist economies.
Correct Answer False
Your Answer False

Match The Following
Question Correct Answer Your Answer

Implicit costs are the cost of resources owned by the firm. of resources owned by the firm.

Opportunity costs are also known as alternative costs alternative costs

The difference between average total cost &average fixed cost shows variable cost variable cost

The difference between average cost and average revenue is average profit average profit


True/False
Question During the period of depression, a large part of a country’s resources lie involuntarily idle.
Correct Answer True
Your Answer True

Multiple Choice Single Answer
Question The demand curve (A.R.) of a firm under perfect competition is
Correct Answer perfectly elastic
Your Answer perfectly elastic

Select The Blank
Question The externality which causes an economic gain or an economic loss to other economic units is also referred to as ________ externality.
Correct Answer Pecuniary
Your Answer Pecuniary

Select The Blank
Question While discussing the product divisibility of public and private goods, the principle of ________ may be applied in case of only those people who do not agree to pay or who cannot pay the market price
Correct Answer exclusion
Your Answer exclusion

Select The Blank
Question Under the decreasing returns to scale, the marginal output curve slopes ________.
Correct Answer downward
Your Answer downward

Multiple Choice Multiple Answer
Question Characteristics of Pure Public goods are:
Correct Answer They are completely indivisible , Their marginal cost would be zero or close to zero , Their benefits cannot be priced
Your Answer They are completely indivisible , Their marginal cost would be zero or close to zero , Their benefits cannot be priced

Multiple Choice Multiple Answer
Question Major types of costs are
Correct Answer Accounting costs , Economic costs , Opportunity costs
Your Answer Accounting costs , Economic costs , Opportunity costs

True/False
Question The short run Average Cost (A.C.) curve is U shaped.
Correct Answer True
Your Answer True

True/False
Question Cyclical fluctuations are recurrent in nature
Correct Answer True
Your Answer True

Multiple Choice Multiple Answer
Question Quantitative credit control measures are
Correct Answer open market operations , changes in bank rates , changes in statutory reserve ratio
Your Answer open market operations , changes in statutory reserve ratio

True/False
Question Private profit motive is an essential feature of Capitalism.
Correct Answer True
Your Answer True

Multiple Choice Single Answer
Question The number of buyers & sellers operating under perfect competition is
Correct Answer large
Your Answer large

Select The Blank
Question The sum of all individual demands constitutes________
Correct Answer market demand
Your Answer market demand

Select The Blank
Question The costs which cover the cost of advertising is ________.
Correct Answer Selling cost
Your Answer Selling cost

Multiple Choice Single Answer
Question The relation between variable input and ouput
Correct Answer is direct
Your Answer is direct

Multiple Choice Single Answer
Question With decline in price of a commodity, total expenditure spent on the commodity is less than before, then elasticity of demand for the commodity is
Correct Answer < 1
Your Answer < 1

Multiple Choice Single Answer
Question The public sector is owned & controlled by
Correct Answer state enterprises
Your Answer state enterprises

True/False
Question In the market, any one who agrees to pay the requisite price of a product would be excluded from their consumption.
Correct Answer False
Your Answer False

Multiple Choice Single Answer
Question A downward movement from one point to another point on the same demand curve implies
Correct Answer expansion
Your Answer expansion

Multiple Choice Multiple Answer
Question Methods of forecasting demand for new products are
Correct Answer Product life cycle analysis , Test marketing , Evolutionary approach
Your Answer Product life cycle analysis , Test marketing , Evolutionary approach

True/False
Question The concept of economic profit differs from that of normal profit.
Correct Answer False
Your Answer True

Select The Blank
Question Reasonable profit target as an alternative to the objective of profit maximization was suggested by ________.
Correct Answer Joel Dean
Your Answer Joel Dean

Multiple Choice Single Answer
Question Inflation is characterized by demand which is in
Correct Answer excess of supply
Your Answer surplus

Select The Blank
Question Defence service is an example of ________ good.
Correct Answer indivisible
Your Answer public

Managerial Economics - 21

LIST OF ATTEMPTED QUESTIONS AND ANSWERS

True/False
Question Macro economic studies are based on empirical evidence.
Correct Answer True
Your Answer True

Select The Blank
Question According to the World Bank's approach, the trade able items would be valued at the corresponding world prices and the non-trade able items at the ________.
Correct Answer shadow prices
Your Answer market prices

Multiple Choice Single Answer
Question The study of the working and allocation of resources in the free market economies is the topic in the
Correct Answer theory of price
Your Answer theory of price

Multiple Choice Single Answer
Question Costs which increase because of the expansion of a firm are called
Correct Answer incremental
Your Answer incremental

True/False
Question In the Long- run, supply of goods can be adjusted to the demand and therefore supply curve is horizontal to the X-axis.
Correct Answer False
Your Answer True

Select The Blank
Question By ' profits', the accountant means total revenue minus________.
Correct Answer Explicit costs
Your Answer Implicit cost

Multiple Choice Multiple Answer
Question Features of short run period are
Correct Answer Supply of goods can be adjusted to the demand to some extent , Supply and demand determine the price , Some factors can be changed
Your Answer Supply of goods can be adjusted to the demand to some extent , Supply and demand determine the price , Some factors can be changed

Select The Blank
Question The law of constant returns to scale is depicted by the marginal output curve which is ________.
Correct Answer horizontal
Your Answer horizontal

Multiple Choice Single Answer
Question The method of calculating depreciation in which the actual working hours of a capital asset are taken in to account is
Correct Answer service unit
Your Answer service unit

True/False
Question Demand curve slopes upwards from left to right.
Correct Answer False
Your Answer False

Multiple Choice Single Answer
Question All the free gifts of nature which are commonly called natural resources are known to economists as
Correct Answer Land
Your Answer Land

True/False
Question Macro-economies is a policy oriented science.
Correct Answer True
Your Answer True

Multiple Choice Single Answer
Question The assumption of perfect competition in all the analytical theories is made by
Correct Answer Classical economists
Your Answer Keynesian economists

Select The Blank
Question In the 3rd stage of operation of the law of variable proportions, the marginal product becomes ________.
Correct Answer negative
Your Answer positive

Multiple Choice Multiple Answer
Question Reasons for need of public distribution system are
Correct Answer To maintain stable price conditions , To bring an efficient management of the supply , To supply the necessary goods to people at reasonable price
Your Answer To maintain stable price conditions , To bring an efficient management of the supply , To supply the necessary goods to people at reasonable price

Select The Blank
Question When demand for the product increases in the same proportion in which income increases, Income elasticity of demand will be equal to________
Correct Answer unity
Your Answer greater than unity

Multiple Choice Multiple Answer
Question Accounting profit includes
Correct Answer wages , rent , interest
Your Answer wages , rent , interest

Multiple Choice Multiple Answer
Question The fiscal policy includes
Correct Answer Formation of taxation policy , It is an instrument for economic stabilization , Monitoring of public expenditure
Your Answer Formation of taxation policy , It is an instrument for economic stabilization , Monitoring of public expenditure

Multiple Choice Single Answer
Question The method of inventory valuation in which , the cost of production is calculated on the assumption that the material which was last to enter the inventory of the company was used first is
Correct Answer LIFO
Your Answer LIFO

Select The Blank
Question A private limited company can be formed with 2 to 50 members maximum, excluding ________
Correct Answer employee shareholders
Your Answer employee shareholders

Multiple Choice Single Answer
Question The number of sellers operating under monopolistic competition as compare to oligopoly is
Correct Answer larger
Your Answer larger

Multiple Choice Multiple Answer
Question Causes for rise in prices in India
Correct Answer Mounting government expenditure , Deficit financing and increase in money supply , Role of black money
Your Answer Mounting government expenditure , Deficit financing and increase in money supply , Increase in demand

True/False
Question Social costs cannot be included in a firm's account book.
Correct Answer True
Your Answer False

Multiple Choice Single Answer
Question AVC is the per unit variable cost of
Correct Answer production
Your Answer total revenue

Multiple Choice Multiple Answer
Question Exceptions to the Law of Demand are
Correct Answer Giffen goods , Articles of snob appeal , Speculation
Your Answer Giffen goods , Articles of snob appeal , Speculation

Question In the cost - benefit analysis, the first step involved is that the investor has to choose a few project alternatives promising a
Correct Answer high rate of return
Your Answer high rate of return

Question In the Dynamic Theory of Profit, Prof. Clark has pointed out the types of changes, which are
Correct Answer Changes in the supply of capital , Changes in population , Changes in the techniques of production
Your Answer Changes in the supply of capital , Changes in population , Changes in the techniques of production

Question Economic problem is faced by poor countrys only.
Correct Answer False
Your Answer False

Match The Following
Question Correct Answer Your Answer

Pure private goods Divisible goods Divisible goods

Self -interest Market economy Neighborhood

Danger from drunken drivers Negative economies Negative economies

Impure public goods Quasi - public goods Quasi - public goods


Multiple Choice Multiple Answer
Question Types of imperfect competition are
Correct Answer Monopoly , Duopoly , Oligopoly
Your Answer Monopoly , Duopoly , Oligopoly

Question If the output rises in the greater proportion than that of the increase in factor inputs, it is referred to as ________.
Correct Answer increasing returns to scale.
Your Answer increasing returns to scale.

Question Investment is significant because
Correct Answer Addition to the real capital assets , It leads to increase in level of income , Increases accumulated wealth of the society
Your Answer Addition to the real capital assets , It leads to increase in level of income , Increases accumulated wealth of the society

Question In the context of externalities, driving the smoke-emitting buses and trucks in the cities is an example of ________ cost.
Correct Answer social
Your Answer social

Question According to Lionel Robbins, "Economics is a science which studies
Correct Answer human behavior
Your Answer economic variables behavior

Question The out of pocket costs are ________.
Correct Answer Explicit costs
Your Answer Explicit costs

Question A firm gets an opportunity to produce multiple products because changes in business activity in a firms is
Correct Answer cyclical
Your Answer rapid

Question Market system or market economy suffers from time to time from economic depressions.
Correct Answer True
Your Answer True

Question Under competitive conditions, market mechanism would automatically bring equilibrium at the level of
Correct Answer full employment
Your Answer optimum produce

Question Micro-economics is primarily concerned with the problem of what, how and for whom to produce?
Correct Answer False
Your Answer True

Question Factors influencing selling costs are
Correct Answer Type of product , Introduction of new goods , Technology changes
Your Answer Type of product , Introduction of new goods , Advertising by customers

Question The important determinants of supply are
Correct Answer Always referred to in relation to price & time , Government policy , Availability of factors of production
Your Answer Always referred to in relation to price & time , Government policy , Availability of factors of production

Question The slope of Supply curve of labour is always
Correct Answer backward
Your Answer upward

Question In economics the questions related to the dynamic or static ( otherwise) capacity of the economy to produce goods and services are topics in the
Correct Answer theory of economic growth
Your Answer theory of economic growth

Question Features of monopolistic Competition are
Correct Answer Fairly large number of firms , Product differentiation , Selling costs are existed
Your Answer Fairly large number of firms , Product differentiation , Selling costs are existed

Question Under perfect competition,firms are free to enter and exit in the market.
Correct Answer True
Your Answer True

Match The Following
Question Correct Answer Your Answer

Motor cars Tangible goods Tangible goods

Wants Insatiable Insatiable

Managerial Economics Prescriptive in nature Prescriptive in nature

Resources Alternative uses Alternative uses

Division of society’s output of goods and services The theory of distribution The theory of distribution

Question Under perfect competition single seller can influence the price.
Correct Answer False Your Answer False

Managerial Economics - 20

LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Multiple Choice Multiple Answer
Question Types of Share capital of Joint-Stock Company are
Correct Answer registered or authorized capital , issued capital , paid-up capital
Your Answer registered or authorized capital , issued capital , paid-up capital

Match The Following
Question Correct Answer Your Answer

Equilibrium price is the price where the quantity demanded equals quantity supplied quantity demanded equals quantity supplied

Excess supply can be defined as quantity supplied minus quantity demanded. quantity supplied minus quantity demanded.

Tea and sugar Complimentary goods Complimentary goods

Excess demand can be defined as quantity demanded minus quantity supplied quantity demanded minus quantity supplied


Multiple Choice Single Answer
Question The act of making goods and services is called
Correct Answer production
Your Answer production

Multiple Choice Single Answer
Question The act of using goods and services to satisfy wants is called
Correct Answer consumption
Your Answer consumption

Select The Blank
Question The liability of a Karta in a Joint Hindu Family Business firm is ________.
Correct Answer limited
Your Answer limited

Select The Blank
Question Demand for a commodity depends on the relative price of its ________
Correct Answer substitute goods
Your Answer substitute goods

Multiple Choice Multiple Answer
Question reasonable profit' are
Correct Answer Capital Attraction , Plough Back , Normal earnings
Your Answer Capital Attraction , Plough Back , Normal earnings

Multiple Choice Multiple Answer
Question Features of Long -run market are
Correct Answer It is durable goods market , Supply can be increased or reduced according to the demand , Sellers at least recover minimum price for their goods
Your Answer It is durable goods market , Supply can be increased or reduced according to the demand , Sellers at least recover minimum price for their goods

Multiple Choice Single Answer
Question The type economic problem is
Correct Answer universal
Your Answer universal

Select The Blank
Question In a market system of an economy, producers are guided by ________ motive.
Correct Answer profit
Your Answer profit

Multiple Choice Single Answer
Question An individual consumer or particular market for a given commodity are the subject matter of
Correct Answer Micro Economics
Your Answer Micro Economics

Select The Blank
Question The index numbers which measure the changes in the general price level of a country refers to ________
Correct Answer Wholesale prices index
Your Answer Wholesale prices index

Multiple Choice Single Answer
Question While calculating accounting profit, the costs which are considered are by nature
Correct Answer explicit
Your Answer implicit

Multiple Choice Single Answer
Question Given the price, if the cost of production increases because of higher price of raw materials, the supply
Correct Answer decreases
Your Answer decreases

Multiple Choice Single Answer
Question The things that are produced by factors of production are called
Correct Answer commodities
Your Answer commodities

Multiple Choice Single Answer
Question The concept of just distribution of national product is a
Correct Answer normative
Your Answer normative

Multiple Choice Single Answer
Question In economics the question related to the selection of methods with which commodities are produced is a subject matter of
Correct Answer theory of production
Your Answer theory of production

True/False
Question In case of the co-operative societies supplying cheap inputs or supplying consumer products at fair prices, a system of subsidized pricing is followed.
Correct Answer True
Your Answer True

Select The Blank
Question Modern economists treat social cost and benefits as ________ of private investment and production decisions.
Correct Answer externalities
Your Answer externalities

Multiple Choice Multiple Answer
Question The market system of economy is based on the following foundations:
Correct Answer Consumer's Sovereignty , Non-interference by the state. , Private Profit Motive
Your Answer Consumer's Sovereignty , Private Profit Motive , Existence of monopoly

Select The Blank
Question The indivisible goods to which the principle exclusion does not apply are called ________ goods.
Correct Answer pure public
Your Answer private

Select The Blank
Question The goods become ________ only when each individual has an access to the entire amount of it and its use by the individual does not reduce its availability to others.
Correct Answer indivisible
Your Answer public

Multiple Choice Single Answer
Question The city of Banaras has specialized in the manufacture of
Correct Answer silk
Your Answer silk

True/False
Question During inflation, the pensioners whose income is permanently fixed, are substantially benefited.
Correct Answer False
Your Answer False

Select The Blank
Question Economists like A.C.Harberger have shown that the cost benefit analysis can be applied to ________ analysis.
Correct Answer general equilibrium
Your Answer general equilibrium

True/False
Question Generally, the larger the income of a consumer, his demand for overall commodities tends to be relatively elastic.
Correct Answer False
Your Answer False

Multiple Choice Single Answer
Question In economics the questions related to the division of society’s output of goods and services among its members are topics in
Correct Answer theory of distribution
Your Answer theory of distribution

True/False
Question Supply management is related to the volume ofsupply & its distribution system.
Correct Answer True
Your Answer True

Select The Blank
Question Demand for safety pins is ________
Correct Answer inelastic
Your Answer inelastic

Multiple Choice Single Answer
Question Every nation’s resources which are used to produce the quantities of goods and services that would be required to satisfy all its citizen’s wants are
Correct Answer insufficient
Your Answer insufficient

True/False
Question Under the disinvestments process, there is full transfer of ownership
Correct Answer True
Your Answer False

Multiple Choice Single Answer
Question In cost - benefit analysis, after the step of appraisal and selection of the project is the step of
Correct Answer comparison of the cash flow
Your Answer comparison of the cash flow

Multiple Choice Single Answer
Question When a company rasies additional finance by borrowing from the public for a specific period of time at a particular rate of interest, it is called as
Correct Answer Debentures
Your Answer Debentures

Multiple Choice Multiple Answer
Question Features of market period are
Correct Answer Related to few hours or few days , Related to perishable goods , The entire supply is to be disposed off on the same day
Your Answer Related to few hours or few days , Related to perishable goods , The entire supply is to be disposed off on the same day

Select The Blank
Question In the context of formulating an investment project, ________ feasibility means the availability of supervisors for implementing and running the project smoothly and professionally.
Correct Answer management
Your Answer organizational

Multiple Choice Multiple Answer
Question Increasing Returns explains
Correct Answer Total product increases at an increasing rate , Marginal product increasing and it is maximum , Average product is increasing but it is below MP
Your Answer Total product increases at an increasing rate , Marginal product increasing and it is maximum , Average product is increasing but it is below MP

Multiple Choice Single Answer
Question Managerial economics generally refers to the integration of economic theory with business
Correct Answer Practice
Your Answer Practice

Multiple Choice Multiple Answer
Question Scope of Managerial Economics deals with
Correct Answer Demand analysis and forecasting , Production function & cost analysis , Inventory management adverting, price system
Your Answer Demand analysis and forecasting , Production function & cost analysis , Inventory management adverting, price system

Multiple Choice Single Answer
Question The observation of economic histories of the United States & West European countries shows that competition , the heart of market mechanism gives rise to
Correct Answer monopolies
Your Answer price competition

Match The Following
Question Correct Answer Your Answer

Chance profit Outbreak of war Outbreak of war

Innovation theory of profit Joseph Schumpeter Joseph Schumpeter

Uncertainly bearing F. H. Knight theory F. H. Knight theory

Implicit cost Opportunity cost Opportunity cost


Multiple Choice Single Answer
Question During a period of rising prices (inflation), the goods and services are
Correct Answer scarce
Your Answer are also increasing

True/False
Question Contraction of supply is traced by the downward movement on the supply curve
Correct Answer True
Your Answer True

Multiple Choice Single Answer
Question Over the years in India the govt. expenditure is
Correct Answer increasing
Your Answer increasing

True/False
Question To solve the unemployment problem , the level of effective demand must decrease.
Correct Answer False
Your Answer False

True/False
Question Demand is related to price, time and place.
Correct Answer True
Your Answer False

Multiple Choice Single Answer
Question Managerial economics is also understood to refer to
Correct Answer applied economics
Your Answer applied economics

Select The Blank
Question A fall in price tends the demand for goods to ________
Correct Answer expand Your Answer expand

Managerial Economics - 18

LIST OF ATTEMPTED QUESTIONS AND ANSWERS ME2

Question A responsible factor for inflation is
Correct Answer hike in prices
Your Answer hike in prices

Question Economists call all human resources as
Correct Answer labor
Your Answer labor

Question The wage and salary earners who get fixed income in terms of money are benefited during inflation.
Correct Answer False
Your Answer False

Question Over the years in India the govt. expenditure is
Correct Answer increasing
Your Answer increasing

Question Given the price, if the cost of production increases because of higher price of raw materials, the supply
Correct Answer decreases
Your Answer decreases

Question All the man made resources which are used in the process of making other goods and services are called
Correct Answer capital
Your Answer capital

Question Micro-economics is primarily concerned with the problem of what, how and for whom to produce?
Correct Answer False
Your Answer False

Question Inflation is characterized by excess of demand.
Correct Answer True
Your Answer True

Question Individual Demand Schedule
Correct Answer Is in tabular form , It shows the prices of goods , It shows the quantities of a commodity purchased
Your Answer Is in tabular form , It shows the prices of goods , It shows the quantities of a commodity purchased

Question Measurement of profit becomes difficult because of the difficulty involved in the calculation of depreciation.
Correct Answer True
Your Answer False

Question Main aims of the New Industrial Policy (1991) are
Correct Answer To unshackle the indian industrial economy from the cobwebs of unnecessary bureaucratic control , To introduce liberalization with a view to integrate the indian economy with the world economy , To remove restrictions on direct foreign investment as also to free the domestic entrepreneur from the restriction of MRTP act
Your Answer To unshackle the indian industrial economy from the cobwebs of unnecessary bureaucratic control , To introduce liberalization with a view to integrate the indian economy with the world economy , To remove restrictions on direct foreign investment as also to free the domestic entrepreneur from the restriction of MRTP act

Question Free riders' is a term associated with the people who would like to have benefit of a good without sharing the cost of its supply.
Correct Answer True
Your Answer True

Question Managerial economics aims at providing help in the firms is
Correct Answer decision making
Your Answer decision making

Question The persons who own the ________hip concern are called Partners.
Correct Answer Partners
Your Answer Partners

Question The minimum number of directors which private limited should have is ________.
Correct Answer 2
Your Answer 2

Question Generally, the larger the income of a consumer, his demand for overall commodities tends to be relatively elastic.
Correct Answer False
Your Answer True

Question Correct Answer Your Answer

Resource allocation decisions in free market economy Theory of price Theory of price

Economic problem Universal Universal

Managerial Economics Applied branch of knowledge Applied branch of knowledge

Inflation Reduction in purchasing power Reduction in purchasing power

Waste of resources Involuntary unemployment Involuntary unemployment

Question In the context of externalities, driving the smoke-emitting buses and trucks in the cities is an example of ________ cost.
Correct Answer social
Your Answer environmental

Question Correct Answer Your Answer

Variable cost can refer to operating costs alone. operating costs alone.

The relationship between price and the quantity supplied of a product is indicated by upward sloping curve. upward sloping curve.

Elasticity of supply means change in supply due to change in price of commodity. price of commodity.

Fixed cost is known as prime cost. prime cost.

Question Cost-benefit analysis refers to the analysis undertaken to judge any projects ________ whether government or private and find out its worth.
Correct Answer investments
Your Answer investments

Question Variable cost are those costs which vary with the level of
Correct Answer output
Your Answer output

Question An individual consumer or particular market for a given commodity are the subject matter of
Correct Answer Micro Economics
Your Answer Micro Economics

Question In the Dynamic Theory of Profit, Prof. Clark has pointed out the types of changes, which are
Correct Answer Changes in the supply of capital , Changes in population , Changes in the techniques of production
Your Answer Changes in the supply of capital , Changes in population , Changes in the techniques of production

Question Given the price, if the cost of production of a commodity decreases because of the use of improved technique of production, there will be increase in supply.
Correct Answer True
Your Answer True

Question True inflation starts only after reaching the level of full
Correct Answer Employment
Your Answer Employment

Question All the free gifts of nature which are commonly called natural resources are known to economists as
Correct Answer Land
Your Answer Land

Question Reasons for need of public distribution system are
Correct Answer To maintain stable price conditions , To bring an efficient management of the supply , To supply the necessary goods to people at reasonable price
Your Answer To maintain stable price conditions , To bring an efficient management of the supply , To supply the necessary goods to people at reasonable price

Question Production Function implies relationship between
Correct Answer input & output
Your Answer input & output

Question The important determinants of supply are
Correct Answer Always referred to in relation to price & time , Government policy , Availability of factors of production
Your Answer Always referred to in relation to price & time , Government policy , Availability of factors of production

Question In economics the questions related to the division of society’s output of goods and services among its members are topics in
Correct Answer theory of distribution
Your Answer theory of distribution

Question Demand for a commodity depends on the relative price of its ________
Correct Answer substitute goods
Your Answer substitute goods

Question In case of the co-operative societies supplying cheap inputs or supplying consumer products at fair prices, a system of subsidized pricing is followed.
Correct Answer True
Your Answer False

Question During periods of inflation, the income of farmers as a class decreases.
Correct Answer True
Your Answer True

Question By ' profits', the accountant means total revenue minus________.
Correct Answer Explicit costs
Your Answer Sunk cost

Question The index numbers which measure the changes in the general price level of a country refers to ________
Correct Answer Wholesale prices index
Your Answer Commodity prices index

Question The study of the working and allocation of resources in the free market economies is the topic in the
Correct Answer theory of price
Your Answer theory of price

Question According to the Government, the buildup of inflationary pressure during the Nineties was attributed to
Correct Answer Higher Fiscal deficit
Your Answer Higher Fiscal deficit

Question In economics the questions related to the dynamic or static ( otherwise) capacity of the economy to produce goods and services are topics in the
Correct Answer theory of economic growth
Your Answer theory of economic growth

Question Increasing Returns explains
Correct Answer Total product increases at an increasing rate , Marginal product increasing and it is maximum , Average product is increasing but it is below MP
Your Answer Total product increases at an increasing rate , Marginal product increasing and it is maximum , Average product is increasing but it is below MP

Question Implicit costs are
Correct Answer Cost on self owned resources , Costs of salary of the proprietor , Interest on the entrepreneur's own investment
Your Answer Cost on self owned resources , Costs of salary of the proprietor , Interest on the entrepreneur's own investment

Question Characteristics of the phase of Depression are
Correct Answer Decrease in economic activities , The growth rate becomes negative , The level of national income declines rapidly
Your Answer Decrease in economic activities , The growth rate becomes negative , The level of national income declines rapidly

Question Micro-economic theory studies how a free enterprise economy determines the price of economic resources
Correct Answer False
Your Answer True

Question Economists like A.C.Harberger have shown that the cost benefit analysis can be applied to ________ analysis.
Correct Answer general equilibrium
Your Answer general equilibrium

Question Break-Even analysis is derived by
Correct Answer Fixed cost , Average variable cost , Quantity of goods and price
Your Answer Fixed cost , Average variable cost , Quantity of goods and price

Question Managerial economics deals with
Correct Answer Integration of economic theory with business practice , Using logic of economics, mathematics & statistics , The use of economic modes of thought to analyze business solution
Your Answer Integration of economic theory with business practice , Using logic of economics, mathematics & statistics , The use of economic modes of thought to analyze business solution

Managerial Economics - 19

LIST OF ATTEMPTED QUESTIONS AND ANSWERS ME3

Question In the context of formulation of an investment project, ________ feasibility means the availability of land, plant, machinery, raw materials and technical know how etc.
Correct Answer technical
Your Answer infrastructure

Question Scarcity of resources is the root cause of economic problem.
Correct Answer True
Your Answer True

Question Inflation reduces the purchasing power of people's income and savings.
Correct Answer True
Your Answer True

Question Demand for safety pins is ________
Correct Answer inelastic
Your Answer relatively inelastic

Question Reasonable profit target as an alternative to the objective of profit maximization was suggested by ________.
Correct Answer Joel Dean
Your Answer Joel Dean

Question Correct Answer Your Answer

Motor cars Tangible goods Tangible goods

Wants Insatiable Insatiable

Managerial Economics Prescriptive in nature Prescriptive in nature

Resources Alternative uses Alternative uses

Division of society’s output of goods and services The theory of distribution The theory of distribution

Question Output rises in a lesser proportion to that of the increase in input, under the case of ________.
Correct Answer decreasing returns to scale
Your Answer decreasing returns to scale

Question Social costs cannot be included in a firm's account book.
Correct Answer True
Your Answer False

Question Economic problem arises only in case of an overpopulated country.
Correct Answer False
Your Answer False

Question The cost which enter the accounts book of the firm are referred as ________.
Correct Answer Accounting cost
Your Answer Accounting cost

Question The question regarding the nature and quantities of commodities to be produced is solely restricted to capitalist economies.
Correct Answer False
Your Answer True

Question There are no real exceptions to the law of demand
Correct Answer False
Your Answer False

Question The federal government of U.S.A. does not face the basic economic problem.
Correct Answer False
Your Answer False

Question The subject matter of managerial economics covers two important areas namely decision-making and
Correct Answer forward Planning
Your Answer forward Planning

Match The Following
Question Correct Answer Your Answer

Decrease in Demand Leftward shift of the demand curve Leftward shift of the demand curve

Contraction of Demand Upward movement on the demand curve Upward movement on the demand curve

Increase in demand Upward shift of the demand curve Upward shift of the demand curve

Extension of demand Downward movement on the demand curve Downward movement on the demand curve

Question The promoters of a company can get incorporated by filing with the registrarof companies various documents such as
Correct Answer Memorandum of Association , Articles of Association , Prospectus
Your Answer Articles of Association , Prospectus

Question Features of public sector enterprises
Correct Answer it is controlled by the state , separate funds to undertake their activity , they are accountable to public
Your Answer it is controlled by the state , separate funds to undertake their activity , they are accountable to public

Question The production function studies
Correct Answer Input and out put relation , Factors of production and final production , Technology used in production
Your Answer Input and out put relation , Factors of production and final production , Demand for production

Question In the 3rd stage of operation of the law of variable proportions, the marginal product becomes ________.
Correct Answer negative
Your Answer negative

Question In a market economy ________ is the best judge of personal interest.
Correct Answer individual
Your Answer public

Question All the buyers and sellers operating under perfect competition have knowledge which is
Correct Answer perfect
Your Answer perfect

Question In a market system of an economy, producers are guided by ________ motive.
Correct Answer profit
Your Answer profit

Question The cost recorded in the books of accounts are considered as
Correct Answer explicit costs
Your Answer explicit costs

Question Demand forecasts are necessary for
Correct Answer Fulfillment of objective of the plans , Preparation of a budget , Expansion of firms
Your Answer Fulfillment of objective of the plans , Preparation of a budget , Expansion of firms

Question Inflation reduces the purchasing power of money and savings.
Correct Answer True
Your Answer True

Question Features of an Industry are
Correct Answer All firms dealing in the same line of business , The ownership and management of each firm is different , Is a group of firms
Your Answer All firms produce different goods , All firms dealing in the same line of business , The ownership and management of each firm is different

Question The characteristics of a sole proprietorship firm is
Correct Answer Unlimited Capital , Ownership by a single person , Easy to form
Your Answer Ownership by a single person , Easy to form

Question Normally, a larger quantity is demanded at
Correct Answer lower price
Your Answer lower price

Question When a company rasies additional finance by borrowing from the public for a specific period of time at a particular rate of interest, it is called as
Correct Answer Debentures
Your Answer Debentures

Question In cost benefit analysis, in the valuation of costs and benefits, for finding the present value, one has to make use of
Correct Answer discount rate
Your Answer discount rate

Question Like a particular street in a city , the entire city may sometimes specialize in the production of a particular commodity . The city acquire the status of a
Correct Answer national market
Your Answer capital market

Question Types of Share capital of Joint-Stock Company are
Correct Answer registered or authorized capital , issued capital , paid-up capital
Your Answer registered or authorized capital , issued capital , paid-up capital

Question An upward sloping demand curve is called ________
Correct Answer exceptional demand curve
Your Answer exceptional demand curve

Question Different types of Elasticity of Demand are
Correct Answer Price elasticity of demand , Income elasticity of demand , Cross elasticity of demand
Your Answer Price elasticity of demand , Income elasticity of demand , Cross elasticity of demand

Question Cournot' , the economists who defined the term 'market' different from that of the traditional sense is an
Correct Answer French economists
Your Answer French economists

Question Demand forecasting is predicting for the demand of a firm’s product in
Correct Answer future
Your Answer future

Question Pure inflation starts only after reaching the full employment level.
Correct Answer True
Your Answer True

Question A monopolist in a price maker.
Correct Answer True
Your Answer True

Question The demand curve (A.R.) of a firm under perfect competition is
Correct Answer perfectly elastic
Your Answer perfectly elastic

Question Managerial economics aims at providing guidance to the firms for
Correct Answer decision making
Your Answer decision making

Question In case of defense services, all the sections of the society are equally protected and benefited. The defense services in other words is
Correct Answer indivisible in character , cannot be priced in the market , a public good
Your Answer indivisible in character , cannot be priced in the market

Question A fall in quantity demanded without a fall in price shows decrease in demand.
Correct Answer True
Your Answer True

Question The subject matter of macro - economics includes the theory of income and employment at an individual level.
Correct Answer False
Your Answer False

Managerial Economics - 17

LIST OF ATTEMPTED QUESTIONS AND ANSWERS ME1

Question In India, the first phase of economic reforms is believed to have begun in 1985 when Vishwanath Pratap Singh was the Prime Minister of the country.
Correct Answer False
Your Answer False

Question Price discrimination is possible in case of
Correct Answer public utilities with legal sanction , personnel services sold , geographical barriers
Your Answer public utilities with legal sanction , personnel services sold , geographical barriers

Question The methods of calculating depreciation is
Correct Answer Diminishing Balance Method , Annuity Method , Service Unit Method
Your Answer Diminishing Balance Method , Annuity Method , Service Unit Method

Question Correct Answer Your Answer

Break even point T.R. = T.C. T.R. = T.C.

Normal profit Implicit cost Short run cost

Average variable cost (A.V.C.) Short run cost Explicit cost

Change in supply Increase and decrease in supply Expansion and contraction of supply

Question A competitive industry has three basic characteristics
Correct Answer Large Number of Firms , Homogeneous Product , Free entry and exit
Your Answer Large Number of Firms , Homogeneous Product , Free entry and exit

Question To solve the unemployment problem , the level of effective demand must decrease.
Correct Answer False
Your Answer True

Question The act of using goods and services to satisfy wants is called
Correct Answer consumption
Your Answer consumption

Question The minimum number of directors which public limited should have is ________.
Correct Answer 3
Your Answer 3

Question The factors of production are
Correct Answer Labour , Land , Capital
Your Answer Labour , Land , Profit

Question Economists have pointed out that the real world is full of
Correct Answer Imperfect competition
Your Answer Monopolistic competition

Question According to J.M. Keynes, the equilibrium between the aggregate demand function and the aggregate supply function can, and often does take place at
Correct Answer less than full employment
Your Answer full employment

Question Important theories of profits are
Correct Answer Uncertainty-bearing theory of profit , Dynamic theory of profit , Life cycle theory
Your Answer Risk taking theory , Uncertainty-bearing theory of profit , Dynamic theory of profit

Question The things that are produced by factors of production are called
Correct Answer commodities
Your Answer commodities

Question Demand is determined by
Correct Answer Price of the product , Relative prices of other goods , Tastes and habits
Your Answer Price of the product , Relative prices of other goods , Tastes and habits

Question The necessary condition of profit maximization of a firm is that Marginal Revenue (M.R) must be equal to ________.
Correct Answer Marginal cost (M.C)
Your Answer Marginal cost (M.C)

Question The concept of just distribution of national product is a
Correct Answer normative
Your Answer objective

Question Dalal Street in Bombay is known as
Correct Answer Bombay Stock Exchange
Your Answer Bombay Stock Exchange

Question The type economic problem is
Correct Answer universal
Your Answer universal

Question Preference share holders get a rate of dividend which is
Correct Answer fixed
Your Answer high

Question The act of making goods and services is called
Correct Answer production
Your Answer production

Question Contraction of supply is traced by the downward movement on the supply curve
Correct Answer True
Your Answer True

Question Baumol has suggested as an alternative objective for profit maximization , the maximization of ________
Correct Answer sales
Your Answer sales

Match The Following
Question Correct Answer Your Answer

Commodities goods and services goods and services

Human wants unlimited unlimited

General Theory of Employment, Interest and Money J. M. Keynes J. M. Keynes

Managerial economics Decision making and forward planning Decision making and forward planning

Resources scarce scarce

Question In the traditional concept of equilibrium, a firm attains the equilibrium when the firm’s Total Revenue (T.R.) =Total Cost (T.C.).
Correct Answer False
Your Answer True

Question Under cost plus pricing
Correct Answer The price is set to cover material, labour cost , Actual costs, standard costs are included , Certain percentage of profit also included
Your Answer The price is set to cover material, labour cost , Actual costs, standard costs are included , Certain percentage of profit also included

Question In economics, supply is considered to be a
Correct Answer relative term
Your Answer relative term

Question In economics the question related to the selection of methods with which commodities are produced is a subject matter of
Correct Answer theory of production
Your Answer theory of production

Question Under the decreasing returns to scale, the marginal output curve slopes ________.
Correct Answer downward
Your Answer downward

Question Managerial economics generally refers to the integration of economic theory with business
Correct Answer Practice
Your Answer Practice

Question Steps in cost benefit analysis
Correct Answer Identification of a project , Formulation of the project , Appraisal and selection of the project
Your Answer Identification of a project , Formulation of the project , Appraisal and selection of the project

Question Slope of supply curve is
Correct Answer positive
Your Answer positive

Question The salary of the proprietor or rent on own land are the ________.
Correct Answer Implicit cost
Your Answer Implicit cost

Question The profits which must be deducted from the gross profits to arrive at net profits are
Correct Answer Monopoly Profits
Your Answer Monopoly Profits

Question We say that a nation faces economic problems , under following conditions
Correct Answer Man has unlimited wants or ends , The means or resources to satisfy them are limited , These resources are not specific but have alternative uses
Your Answer Man has unlimited wants or ends , The means or resources to satisfy them are limited , These resources are not specific but have alternative uses

Question A shift in the demand curve to the left shows increase in demand.
Correct Answer False
Your Answer False

Question The sum of total fixed costs and total variable costs is the total cost.
Correct Answer True
Your Answer True

Question A Joint- Stock Company is owned by its share holders but it is managed by
Correct Answer Board of Directors
Your Answer Non-government organization

Question The liability of a Karta in a Joint Hindu Family Business firm is ________.
Correct Answer limited
Your Answer joint

Question A fall in price tends the demand for goods to ________
Correct Answer expand
Your Answer increase

Question The supply curve slopes downwards from left to right.
Correct Answer False
Your Answer False

Question Poverty is the root cause of Economic problem.
Correct Answer False
Your Answer False

Question Every nation’s resources which are used to produce the quantities of goods and services that would be required to satisfy all its citizen’s wants are
Correct Answer insufficient
Your Answer insufficient

Question In case of a proprietory firm, the liability for all his debts is
Correct Answer unlimited
Your Answer unlimited

Question The city of Kashmir has specialized in the manufacture of
Correct Answer shawls
Your Answer shawls

Question The Laws of Returns to scale are
Correct Answer Law of Increasing Returns to Scale , Law of Constant Returns to Scale , Law of Decreasing Returns to scale
Your Answer Law of Increasing Returns to Scale , Law of Constant Returns to Scale , Law of Decreasing Returns to scale

Question Managerial economics is also understood to refer to
Correct Answer applied economics
Your Answer applied economics

Question The registration of a partnership firm is voluntary
Correct Answer True Your Answer True

Managerial Economics - 16

LIST OF ATTEMPTED QUESTIONS AND ANSWERS



Multiple Choice Single Answer
Question
Every nation’s resources which are used to produce the quantities of goods and services that would be required to satisfy all its citizen’s wants are
Correct Answer
insufficient
Your Answer
insufficient

Match The Following
Question
Correct Answer
Your Answer
Managerial economics
Decision making and forward planning
Decision making and forward planning
Resources
scarce
scarce
Commodities
goods and services
goods and services
Human wants
unlimited
unlimited
General Theory of Employment, Interest and Money
J. M. Keynes
J. M. Keynes

Multiple Choice Single Answer
Question
The feasibility, which includes the prospects of employment generation, development of backward areas, social groups comprises of
Correct Answer
Economic feasibility
Your Answer
Economic feasibility

Multiple Choice Single Answer
Question
As far as its use is concerned, tuning in of a radio can be categorized as:
Correct Answer
Divisible
Your Answer
Divisible

True/False
Question
In a market system of economy, there is no harmony between individual interests and interests of the community.
Correct Answer
False
Your Answer
False

True/False
Question
Institution of private property is not an essential feature of Capitalism.
Correct Answer
False
Your Answer
False

Multiple Choice Multiple Answer
Question
In case of defense services, all the sections of the society are equally protected and benefited. The defense services in other words is
Correct Answer
indivisible in character , cannot be priced in the market , a public good
Your Answer
indivisible in character , cannot be priced in the market

Select The Blank
Question
On the ________ level, the summation of maximum individual welfare does not automatically lead to maximum social welfare.
Correct Answer
macro
Your Answer
micro

Select The Blank
Question
While discussing the product divisibility of public and private goods, the principle of ________ may be applied in case of only those people who do not agree to pay or who cannot pay the market price
Correct Answer
exclusion
Your Answer
exceptions

Select The Blank
Question
The goods become ________ only when each individual has an access to the entire amount of it and its use by the individual does not reduce its availability to others.
Correct Answer
indivisible
Your Answer
public

Select The Blank
Question
In the context of formulation of an investment project, ________ feasibility means the availability of land, plant, machinery, raw materials and technical know how etc.
Correct Answer
technical
Your Answer
technical

Select The Blank
Question
In a market economy ________ is the best judge of personal interest.
Correct Answer
individual
Your Answer
individual

True/False
Question
Inflation reduces the purchasing power of people's income and savings.
Correct Answer
True
Your Answer
True

True/False
Question
In a free-enterprise economy, the problems of what how and for whom are solved by a planning committee
Correct Answer
False
Your Answer
False

Multiple Choice Single Answer
Question
A technical unit of given capacity of output is
Correct Answer
plant
Your Answer
plant

Multiple Choice Multiple Answer
Question
Preference Shares can be classified as
Correct Answer
Simple Shares , Cumulative Shares , Redeemable Shares
Your Answer
Simple Shares , Redeemable Shares

Multiple Choice Multiple Answer
Question
The sole proprietorship type of organization is found in
Correct Answer
Agriculture, , Retail trade, , Hotel,
Your Answer
Agriculture, , Retail trade, , Hotel,

Multiple Choice Multiple Answer
Question
Co-operative organizations is
Correct Answer
voluntary organization , managed by democratic principle , organization, which performs its business within the members
Your Answer
voluntary organization , managed by democratic principle , non profit motive organization

Select The Blank
Question
A private limited company can be formed with 2 to 50 members maximum, excluding ________
Correct Answer
employee shareholders
Your Answer
Directors

Multiple Choice Single Answer
Question
The method of inventory valuation in which , the cost of production is calculated on the assumption that the material which was last to enter the inventory of the company was used first is
Correct Answer
LIFO
Your Answer
LIFO

True/False
Question
Profit should be large enough for a plough – back for business expansion.
Correct Answer
True
Your Answer
True

True/False
Question
Accounting profit takes in to account opportunity cost.
Correct Answer
False
Your Answer
True

Multiple Choice Multiple Answer
Question
Profit is regarded as
Correct Answer
income accruing to the equity holders , wages accrue to the labour , rent accrue to the owner
Your Answer
income accruing to the equity holders , rent accrue to the owner

Multiple Choice Single Answer
Question
Change in income of a person may result in demand for goods to
Correct Answer
change
Your Answer
change

Multiple Choice Single Answer
Question
With decline in price of a commodity, total expenditure spent on the commodity is less than before, then elasticity of demand for the commodity is
Correct Answer
< 1
Your Answer
>1

Multiple Choice Single Answer
Question
Peas & beas, groundnut oil & til oil, tea & coffee are examples of
Correct Answer
substitutes goods
Your Answer
substitutes goods

True/False
Question
Demand for luxury goods is inelastic
Correct Answer
False
Your Answer
False

Match The Following
Question
Correct Answer
Your Answer
Increase in demand
Upward shift of the demand curve
Upward movement on the demand curve
Extension of demand
Downward movement on the demand curve
Vertical Demand curve
Decrease in Demand
Leftward shift of the demand curve
Downward movement on the demand curve
Contraction of Demand
Upward movement on the demand curve
Leftward shift of the demand curve

Select The Blank
Question
Increase in consumer’s income leads in the demand for inferior goods to ________
Correct Answer
decrease
Your Answer
decrease

Multiple Choice Multiple Answer
Question
Reasons for change in Demand (Increase or Decrease in Demand)
Correct Answer
Change income of consumer , Change in population , Change in fashion and customs
Your Answer
Change income of consumer , Change in population , Change in fashion and customs

Multiple Choice Single Answer
Question
AVC is the per unit variable cost of
Correct Answer
production
Your Answer
fixed variable

True/False
Question
The sum of total fixed costs and total variable costs is the total cost.
Correct Answer
True
Your Answer
True

Multiple Choice Multiple Answer
Question
The production function can be explained by
Correct Answer
Law of variable proportions , Laws of returns to scale , Optimum combinations of inputs
Your Answer
Law of variable proportions , Laws of returns to scale

Select The Blank
Question
Output rises in a lesser proportion to that of the increase in input, under the case of ________.
Correct Answer
decreasing returns to scale
Your Answer
decreasing returns to scale

Select The Blank
Question
The costs which cover the cost of advertising is ________.
Correct Answer
Selling cost
Your Answer
Incremental cost

Select The Blank
Question
The out of pocket costs are ________.
Correct Answer
Explicit costs
Your Answer
Explicit costs

Select The Blank
Question
By ' profits', the accountant means total revenue minus________.
Correct Answer
Explicit costs
Your Answer
Fixed costs

Multiple Choice Single Answer
Question
The supply curve during market period is
Correct Answer
perfectly inelastic
Your Answer
perfectly inelastic

Multiple Choice Single Answer
Question
Under monopoly entry of new firms is
Correct Answer
prohibited
Your Answer
limited

True/False
Question
In case of the co-operative societies supplying cheap inputs or supplying consumer products at fair prices, a system of subsidized pricing is followed.
Correct Answer
True
Your Answer
True

True/False
Question
Market price fluctuates very often.
Correct Answer
True
Your Answer
True

Multiple Choice Multiple Answer
Question
Macro Economics is the study of
Correct Answer
The aggregate behavior of the economy , The behavior of economic agents , Problems such as the rates of inflation, the balance of payments, etc
Your Answer
The aggregate behavior of the economy , Problems such as the rates of inflation, the balance of payments, etc , Economic welfare

Multiple Choice Multiple Answer
Question
The subject matter of Micro economics includes the study of
Correct Answer
an individual consumer , particular market for a given commodity , operation of a firm
Your Answer
an individual consumer , particular market for a given commodity , major economic issues , problems & policies

Multiple Choice Multiple Answer
Question
16. The phase of recovery denotes
Correct Answer
More employment opportunities , Increase in profitability , Wage rate increase
Your Answer
More employment opportunities , Increase in profitability , Wage rate increase

Multiple Choice Multiple Answer
Question
Quantitative credit control measures are
Correct Answer
open market operations , changes in bank rates , changes in statutory reserve ratio
Your Answer
open market operations , moral suasion

Multiple Choice Single Answer
Question
The government has adopted a system of dual prices in the case of
Correct Answer
essential goods
Your Answer
essential goods

Multiple Choice Multiple Answer
Question
The disinvestments of industries is needed for
Correct Answer
Phased privatization , Reducing deficit , Capital support to plans
Your Answer
Phased privatization , Reducing deficit , Capital support to plans

Managerial Economics - 15

LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Multiple Choice Single Answer
Question Pure public goods are subject to the law of decreasing average cost, because of the
Correct Answer economies of scale
Your Answer economies of scale

Multiple Choice Single Answer
Question In the cost - benefit analysis, after formulating various alternative project capacity, each of them has to be examined in terms of its
Correct Answer feasibility
Your Answer feasibility

True/False
Question Bargaining is one of the remedies of corrective action.
Correct Answer False
Your Answer True

Match The Following
Question Correct Answer Your Answer

Defence service Indivisible Indivisible

Economic effects of public goods are Spill over effect Spill over effect

Selection or implementation Step of cost benefit analysis Step of cost benefit analysis

Production possibility frontier Maximization of output Maximization of output


Multiple Choice Multiple Answer
Question The advantage of cost-benefit analysis are
Correct Answer Maximization of social welfare , Objective measurement of the trade-off , Maximization of difference between total benefits & total costs
Your Answer Maximization of social welfare , Objective measurement of the trade-off , Maximization of difference between total benefits & total costs

Multiple Choice Multiple Answer
Question The term externalities may also be referred as:
Correct Answer Spill-over effects , Neighborhood effects , Third party effects
Your Answer Spill-over effects , Neighborhood effects , Third party effects

Select The Blank
Question Modern economists treat social cost and benefits as ________ of private investment and production decisions.
Correct Answer externalities
Your Answer disadvantages

Select The Blank
Question Economists like A.C.Harberger have shown that the cost benefit analysis can be applied to ________ analysis.
Correct Answer general equilibrium
Your Answer general equilibrium

Select The Blank
Question In the context of formulating an investment project, ________ feasibility means the availability of supervisors for implementing and running the project smoothly and professionally.
Correct Answer management
Your Answer management

Select The Blank
Question Prof. Sam Nelson calls risks from unsafe factories or nuclear power plants as ________ economies.
Correct Answer negative
Your Answer hazardous

Multiple Choice Single Answer
Question According to Lionel Robbins, "Economics is a science which studies
Correct Answer human behavior
Your Answer social behavior

Multiple Choice Single Answer
Question Question related to the efficient production and allocation belong to the branch of economic theory called
Correct Answer Welfare Economics
Your Answer Business Economics

Multiple Choice Multiple Answer
Question Managerial economics deals with
Correct Answer Integration of economic theory with business practice , Using logic of economics, mathematics & statistics , The use of economic modes of thought to analyze business solution
Your Answer Integration of economic theory with business practice , Using logic of economics, mathematics & statistics , The use of economic modes of thought to analyze business solution

Multiple Choice Single Answer
Question The public sector is owned & controlled by
Correct Answer state enterprises
Your Answer state enterprises

Select The Blank
Question Reasonable profit target as an alternative to the objective of profit maximization was suggested by ________.
Correct Answer Joel Dean
Your Answer Joel Dean

Select The Blank
Question “Homeostatic Approach” as an alternative objective of firms was suggested by ________.
Correct Answer Prof. Kenneth Boulding
Your Answer Prof. Kenneth Boulding

Select The Blank
Question The form of organization which is best for self employment is ________.
Correct Answer Sole trader
Your Answer Sole trader

True/False
Question Accounting profit takes in to account opportunity cost.
Correct Answer False
Your Answer False

Multiple Choice Single Answer
Question Complementary goods are demanded
Correct Answer jointly
Your Answer jointly

Multiple Choice Single Answer
Question If the substitutes are relatively costly then the demand for the commodity in question will be
Correct Answer more
Your Answer same

True/False
Question There are no real exceptions to the law of demand
Correct Answer False
Your Answer False

True/False
Question Demand curve slopes downwards from left to right.
Correct Answer True
Your Answer True

Select The Blank
Question An upward sloping demand curve is called ________
Correct Answer exceptional demand curve
Your Answer exceptional demand curve

Select The Blank
Question Goods which are paradoxical to the law of demand are ________
Correct Answer Giffen goods, ,
Your Answer Giffen goods, ,

Match The Following
Question Correct Answer Your Answer

Normally the isoquant slopes upward from right to left. downward from right to left

Any straight line supply curve which cuts y axis will have zero elasticity of supply. perfectly elastic

The market period supply curve for perishable commodities is perfectly inelastic. perfectly inelastic.

A rightwards shift in supply schedule indicates an increase in supply. an increase in supply.


Multiple Choice Multiple Answer
Question Explicit costs are
Correct Answer Out of pocket costs , These are firms accounting expenses , Expenditure costs
Your Answer Out of pocket costs , These are firms accounting expenses , Expenditure costs

Select The Blank
Question Output rises in a lesser proportion to that of the increase in input, under the case of ________.
Correct Answer decreasing returns to scale
Your Answer decreasing returns to scale

Select The Blank
Question The cost which enter the accounts book of the firm are referred as ________.
Correct Answer Accounting cost
Your Answer Accounting cost

Multiple Choice Single Answer
Question Jevons' , the economists who defined the term 'market' different from that of the traditional sense is an
Correct Answer English economists
Your Answer English economists

Multiple Choice Single Answer
Question Economists have pointed out that the real world is full of
Correct Answer Imperfect competition
Your Answer Imperfect competition

True/False
Question A firm under perfect competition is a price maker.
Correct Answer False
Your Answer False

True/False
Question Under perfect competition single seller can influence the price.
Correct Answer False
Your Answer False

Multiple Choice Multiple Answer
Question Types of imperfect competition are
Correct Answer Monopoly , Duopoly , Oligopoly
Your Answer Monopoly , Duopoly , Oligopoly

Multiple Choice Multiple Answer
Question Features of Pure Competition are
Correct Answer Large number of buyers and sellers , Homogeneous products , Free entry and free exit of firms
Your Answer Large number of buyers and sellers , Homogeneous products , Free entry and free exit of firms

Multiple Choice Multiple Answer
Question Equilibrium is the stage of
Correct Answer maximum satisfaction , balance , stationary
Your Answer maximum satisfaction , balance

Multiple Choice Single Answer
Question Inflation is a phenomena in which prices
Correct Answer rise
Your Answer rise

Multiple Choice Single Answer
Question True inflation starts only after reaching the level of full
Correct Answer Employment
Your Answer Employment

True/False
Question During inflation, the pensioners whose income is permanently fixed, are substantially benefited.
Correct Answer False
Your Answer False

True/False
Question Saving is a private virtue
Correct Answer True
Your Answer True

Multiple Choice Multiple Answer
Question According to Keynes, Aggregate supply function refers to
Correct Answer the minimum price of revenue which the entrepreneurs must get , Associated with different levels of employment , Explains that the level of out put varies with the level of employment
Your Answer the minimum price of revenue which the entrepreneurs must get , Associated with different levels of employment , Explains that the level of out put varies with the level of employment

Multiple Choice Multiple Answer
Question Marginal Propensity to consume is characterized as follows
Correct Answer It is defined as the ratio of the change in consumption to the change in income , It is rate of change in the average propensity to consume as income changes , It is derived by the formula mpc= change in c/change in y
Your Answer It is rate of change in the average propensity to consume as income changes , It is derived by the formula mpc= change in c/change in y , It is derived by dividing the change in income by change in the consumption expenditure

Multiple Choice Single Answer
Question During the period of depression various factors of production are
Correct Answer exhausted
Your Answer unutilized

True/False
Question In general SBI uses its monetary policy to achieve a judicious balance between the growth of production and control of the general price level.
Correct Answer False
Your Answer False

True/False
Question Public enterprises have shown a very high rate of return of the capital invested
Correct Answer False
Your Answer False

Multiple Choice Multiple Answer
Question The meaning of monetary policy is
Correct Answer It is programmed of the central bank , It controls the total supply of money , The basic objective is to achieve economic stability
Your Answer It is programmed of the central bank , It controls the total supply of money , The basic objective is to achieve economic stability

Multiple Choice Multiple Answer
Question Main aims of the New Industrial Policy (1991) are
Correct Answer To unshackle the indian industrial economy from the cobwebs of unnecessary bureaucratic control , To introduce liberalization with a view to integrate the indian economy with the world economy , To remove restrictions on direct foreign investment as also to free the domestic entrepreneur from the restriction of MRTP act
Your Answer To unshackle the indian industrial economy from the cobwebs of unnecessary bureaucratic control , To introduce liberalization with a view to integrate the indian economy with the world economy , To remove restrictions on direct foreign investment as also to free the domestic entrepreneur from the restriction of MRTP act

Multiple Choice Multiple Answer
Question Objectives of economic policy are
Correct Answer To increase the efficiency and international competitiveness of industrial production , To improve the performance and rationalize the scope of the public sector , To reform and modernize the financial sector
Your Answer To increase the efficiency and international competitiveness of industrial production , To improve the performance and rationalize the scope of the public sector , To reform and modernize the financial sector

Managerial Economics - 14

Multiple Choice Single Answer
Question
The study of the working and allocation of resources in the free market economies is the topic in the
Correct Answer
theory of price
Your Answer
theory of production

Multiple Choice Single Answer
Question
Managerial economics aims at providing help in the firms is
Correct Answer
decision making
Your Answer
decision making

True/False
Question
The federal government of U.S.A. does not face the basic economic problem.
Correct Answer
False
Your Answer
False

Multiple Choice Single Answer
Question
In equilibrium analysis of a firm, it is assumed that every individual proprietor exhibits rational economic
Correct Answer
behavior
Your Answer
behavior

Match The Following
Question
Correct Answer
Your Answer
Managerial Economics
Prescriptive in nature
The theory of distribution
Resources
Alternative uses
Alternative uses
Division of society’s output of goods and services
The theory of distribution
Prescriptive in nature
Motor cars
Tangible goods
Tangible goods
Wants
Insatiable
Insatiable

True/False
Question
Market price fluctuates very often
Correct Answer
True
Your Answer
False

Multiple Choice Single Answer
Question
The firm is the unit that makes the decisions regarding employment of and the output of commodities are
Correct Answer
factors of production
Your Answer
factors of production

Multiple Choice Single Answer
Question
The principle of exclusion cannot be applied to the goods which are
Correct Answer
indivisible
Your Answer
invisible

Multiple Choice Single Answer
Question
In the cost – benefit analysis, the firm step involved is that the investor has to choose a few project alternatives promising a rate of return which is
Correct Answer
high
Your Answer
high

Multiple Choice Single Answer
Question
Market system of economy is characterized by consumer’s
Correct Answer
sovereignty
Your Answer
demand

Multiple Choice Single Answer
Question
In case of a joint stock company, the liability of share holders is
Correct Answer
limited
Your Answer
limited

True/False
Question
The divisible goods, whose benefits can be priced, are called pure public goods
Correct Answer
False
Your Answer
True

True/False
Question
In case of a proprietary firm the liability of the proprietor is limited
Correct Answer
False
Your Answer
False

True/False
Question
During the phase of depression, the level of national income and expenditure rises rapidly
Correct Answer
False
Your Answer
False

Multiple Choice Single Answer
Question
According J.B.Clark, profit is the reward paid for
Correct Answer
dynamism
Your Answer
risk bearing

Multiple Choice Single Answer
Question
Gross profit is the excess of total revenue of a firm over total
Correct Answer
expenditure
Your Answer
expenditure

Multiple Choice Single Answer
Question
In general, the demand for necessaries is relatively
Correct Answer
inelastic
Your Answer
elastic

True/False
Question
Demand for food grains is inelastic but the demand for wheat is elastic.
Correct Answer
True
Your Answer
False

Match The Following
Question
Correct Answer
Your Answer
Excess supply can be defined as
Quantity supplied minus quantity demanded
Quantity supplied minus quantity demanded
If demand remain unchanged on increase in supply will result in
A rise in equilibrium quantity
The supply is perfectly elastic
Market Price is a situation which
The supply is perfectly elastic
A rise in equilibrium quantity
The responsiveness of demand to change in price is measured
Elasticity of demand
In the same proportion
Unit income elasticity implies that asincome rises demand for a commodity rises
In the same proportion
Elasticity of demand

Select The Blank
Question
Greater scope for the ________ sector may mean incremental ________ , which connotes the expansion of public sector undertakings, can be left to some private companies
Correct Answer
private
Your Answer
investment
Correct Answer
disinvestments
Your Answer
growth

Multiple Choice Single Answer
Question
Goods produced on small scale of supply is
Correct Answer
inelastic
Your Answer
zero elastic

True/False
Question
The sum of total fixed costs and total variable costs is the total cost.
Correct Answer
True
Your Answer
True

True/False
Question
Contraction of supply is traced by the downward movement on the supply curve.
Correct Answer
True
Your Answer
True

True/False
Question
The laws of returns to scale explain the behavior of output in response to changes in scale.
Correct Answer
True
Your Answer
True

True/False
Question
In the stage I of the law of diminishing returns, the marginal product goes on increasing
Correct Answer
True
Your Answer
False

Multiple Choice Multiple Answer
Question
Features of monopolistic Competition
Correct Answer
Fairly Large number of firms , Product differentiation , Selling costs are existed
Your Answer
Fairly Large number of firms , Product differentiation , Selling costs are existed

Select The Blank
Question
Where ________ is charging a ________ in the home market and a lower price in the international market, it is called Dumping
Correct Answer
monopolist
Your Answer
a firm
Correct Answer
higher price
Your Answer
higher price

Select The Blank
Question
The number of sellers operating under this type of competition is ________ under oligopoly, but less than under ________
Correct Answer
larger than
Your Answer
complementary
Correct Answer
perfect ompetition
Your Answer
perfect ompetition

Multiple Choice Multiple Answer
Question
Marginal Propensity to consume
Correct Answer
It is defined as the ratio of the change in consumption to the change in income , It is rate of change in the average propensity to consume as income changes , It is derived by the formula mpc= change in C/change in Y
Your Answer
It is defined as the ratio of the change in consumption to the change in income , It is derived by the formula mpc= change in C/change in Y , It is derived by dividing the change in income by change in the consumption expenditure

Multiple Choice Multiple Answer
Question
Investment
Correct Answer
It adds to capital equipments , It leads to increase in level of income , It includes new plant and equipment
Your Answer
It adds to capital equipments , It leads to increase in level of income , It includes new plant and equipment

Multiple Choice Multiple Answer
Question
Features of stage of expansion in business cycle are
Correct Answer
Rise in national output , Rise in consumer and capital expenditure , Bank advances grow rapidly
Your Answer
Rise in national output , Rise in consumer and capital expenditure , Bank advances grow rapidly

Multiple Choice Multiple Answer
Question
Characteristics of Depression
Correct Answer
Decrease in economic activities , The growth rate becomes negative , The level of national income declines rapidly
Your Answer
Decrease in economic activities , The growth rate becomes negative

Multiple Choice Multiple Answer
Question
Recession includes
Correct Answer
The demand is halted , Increase in production of goods , Inventories piling up in stocks
Your Answer
The demand is halted , Inventories piling up in stocks

Multiple Choice Multiple Answer
Question
The causes of inflation
Correct Answer
Increase in public expenditure , Increase in private expenditure , Increase in foreign demand
Your Answer
Increase in public expenditure , Increase in foreign demand , Increase in taxation

Select The Blank
Question
The rate of interest, according to ________ , depends upon two factors: (i) ________ and (ii) the quantity of money
Correct Answer
Keynes
Your Answer
Keynes
Correct Answer
the liquidity preference function
Your Answer
the liquidity preference function

Select The Blank
Question
In the words of ________ , “inflation occurs when the ________ of prices and cost is rising”.
Correct Answer
Prof. Samuelson
Your Answer
Prof. Samuelson
Correct Answer
general level
Your Answer
general level

Multiple Choice Multiple Answer
Question
Forms of Public Enterprises
Correct Answer
Public Corporations , Departmental management , Company Management or management by boards
Your Answer
Departmental management , Public Corporations

Multiple Choice Multiple Answer
Question
Specific organizational goals of Firms are:
Correct Answer
Maximisation of profit , Reasonable Profit Target , Sales revenue Maximization
Your Answer
Maximisation of profit , Reasonable Profit Target , Sales revenue Maximization

Multiple Choice Multiple Answer
Question
Individual Demand Schedule:
Correct Answer
Is in tabular form , It shows the prices of goods , It shows the quantities of a commodity purchased
Your Answer
Is in tabular form , It shows the prices of goods , It shows the quantities of a commodity purchased

Multiple Choice Multiple Answer
Question
The production function can be explained by:
Correct Answer
Law of variable proportions , Laws of returns to scale , Optimum combinations of inputs
Your Answer
Law of variable proportions , Laws of returns to scale , Optimum combinations of inputs

Multiple Choice Multiple Answer
Question
Implicit costs are:
Correct Answer
Cost on self owned resources , Costs of salary of the proprietor , Interest on the entrepreneur's own investment
Your Answer
Cost on self owned resources , Interest on the entrepreneur's own investment

Select The Blank
Question
Managerial ________s generally refers to the integration of economic theory with ________ practice.
Correct Answer
economic
Your Answer
economic
Correct Answer
business
Your Answer
business

Select The Blank
Question
In a competitive industry, there is a large number of firms so that the action of ________ firm has ________ on the price and output of the whole industry.
Correct Answer
a single
Your Answer
a single
Correct Answer
no effect
Your Answer
no effect

Select The Blank
Question
As per the International Labour Organisation (ILO), _ ________ is a ________ association of individuals with limited income on the basis of equal rights and responsibilities for achieving certa
Correct Answer
Co-operation
Your Answer
Co-operation
Correct Answer
voluntary
Your Answer
voluntary

Select The Blank
Question
The word ________ has different meanings to businessmen, ________ , tax collectors, workers and economists and it is often used in a loose sense that buries its real significance
Correct Answer
Profit
Your Answer
Profit
Correct Answer
accountants
Your Answer
accountants

Select The Blank
Question
The demand curve is ________ representation of a demand schedule, demand curve slopes ________ ward from left to right.
Correct Answer
graphical
Your Answer
graphical
Correct Answer
down
Your Answer
down

Select The Blank
Question
The ________ that is ________ is the opportunity cost of the commodity produced.
Correct Answer
sacrificed
Your Answer
commodity
Correct Answer
commodity
Your Answer
sacrificed