Friday, May 6, 2011

Managerial Economics -3

Managerial Economics
LIST OF ATTEMPTED QUESTIONS AND ANSWERS

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

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

True/False
* Question When demand and supply rise and fall in the same proportion, the equilibrium price changes.
Correct Answer False
Your Answer False

Select The Blank
* Question "Homeostatic Approach" as an alternative objective of firms was suggested by ________.
Correct Answer Prof. Kenneth Boulding
Your Answer Joel Dean

Select The Blank
* Question The social costs and benefits are the external economies and diseconomies resulting from the ________ activities, which are known as, "externalities"
Correct Answer firm's
Your Answer firm's

Multiple Choice Single Answer
* Question Economists call all human resources mental, physical , inherited and acquired as
Correct Answer Labour
Your Answer Labour

Multiple Choice Single Answer
* Question According to Prof. F.H. Knight, profit is a reward for
Correct Answer uncertainty bearing
Your Answer risk bearing

Multiple Choice Multiple Answer
* Question Internal Economies involves
Correct Answer Advantages of large-scale production , Low cost of production , It avails benefits of cheaper finance
Your Answer Low cost of production , Availability of banking facility

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

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

Multiple Choice Multiple Answer
* Question Distinction between private sector and public sector is determined
Correct Answer on the basis of economic system , on the basis of motive , on the basis of principle of pricing
Your Answer on the basis of economic system , on the basis of motive , on the basis of infrastructure

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

True/False
* Question When a change in income has no effect upon the quantity demanded of a product, the income elasticity of demand is zero
Correct Answer True
Your Answer True

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 Economic

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

True/False
* Question During period of depression various factors of production lie unutilized.
Correct Answer True
Your Answer True

True/False
* Question In case of sole proprietorship the owner and organization are same
Correct Answer True
Your Answer True

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 above MP

Match The Following
* Question Correct Answer Your Answer
Price leadership Oligopoly
Surgical equipment Refusal pricing
Intuitive pricing psychological & subjective
Experimental pricing selection of sample tests markets


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

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

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 fashion and customs

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

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

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

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

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

Multiple Choice Single Answer
* Question According to J.M.Keynes, the equilibrium is established at the level
Correct Answer less than full employment
Your Answer equal to full employment

Match The Following
* Question Correct Answer Your Answer

The point of effective demand is the point when A.D. = A.S. A.D. = A.S.

Trade Cycle Recession Recession

Rise in costs due to an increase in factor prices a cause of inflation from supply side. a cause of inflation from supply side.

According to J. M. Keynes, there are two factors determining the investment function, namely i) the M.E.C. and ii) the rate of interest. namely i) the consumption. and ii) the rate of savings.


Multiple Choice Single Answer
* Question Joint Stock Company is an incorporated association with a
Correct Answer perpetual succession
Your Answer perpetual succession

Select The Blank
* Question Sole Proprietorship which is also called sole ________
Correct Answer tradership
Your Answer tradership

Multiple Choice Single Answer
* Question The market which covers capital market & all banking and non-banking institutions are together taken as
Correct Answer Financial Market
Your Answer Financial Market

Multiple Choice Multiple Answer
* Question According to Keynes there are three motives for holding cash for liquidity preference
Correct Answer the transactions motive , the precautionary motive , the speculative motive
Your Answer the transactions motive , the precautionary motive , the speculative motive

Multiple Choice Multiple Answer
* Question The total output of all the commodities in one country over some period, usually taken as a year is called as
Correct Answer Gross National Product , National Product , National Income
Your Answer Gross National Product , National Product

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

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 Economic problem does not recognize the boundaries of caste,creed,culture Thus economic problem is always considered as the
Correct Answer universal problem
Your Answer universal problem

Multiple Choice Multiple Answer
* Question Conditions of Price Discrimination are:
Correct Answer The two markets in which the product is sold should be kept separate , The elasticity of demand in different markets should be different , Market must be imperfect
Your Answer The two markets in which the product is sold should be kept separate , The elasticity of demand in different markets should be different , Market must be imperfect

True/False
* Question Pure (Net) profit contains an element of monopoly profit.
Correct Answer False
Your Answer True

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

Multiple Choice Single Answer
* Question Depreciation is the value caused by the continuous use of a capital asset, which indicates
Correct Answer loss
Your Answer loss

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. , affects the railways

Multiple Choice Single Answer
* Question J.M. Keynes, on the basis of a fundamental psychological law of consumption, observed that as income increases, consumption also increases, but proportionately
Correct Answer less
Your Answer less

Multiple Choice Single Answer
* Question Slope of supply curve is
Correct Answer positive
Your Answer positive

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

Multiple Choice Single Answer
* Question In the Long run perfect competition and monopolistic competition the firm make profits which are
Correct Answer normal

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 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

True/False
* Question In case of indivisible goods, which are not priced, the decisions regarding their demand preferences are taken through price mechanism.
Correct Answer False
Your Answer True

Multiple Choice Single Answer
* Question A responsible factor for inflation is
Correct Answer hike in prices
Your Answer hike in prices

True/False
* Question A monopolist’s product is a unique product.
Correct Answer True
Your Answer True

Multiple Choice Multiple Answer
* 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

Multiple Choice Multiple Answer
* 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 Memorandum of Association , Articles of Association

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 The indivisible goods whose benefits cannot be priced are called
Correct Answer Pure public goods
Your Answer Pure private goods

Select The Blank
* Question The partnership between private sector & government is called ________
Correct Answer Joint sector enterprise
Your Answer Joint sector enterprise

Multiple Choice Single Answer
* Question The main objective of a co- operative organization is
Correct Answer service
Your Answer service

Multiple Choice Multiple Answer
* Question The features of business or trade cycle are
Correct Answer It is a wave like movement , These fluctuations are recurrent in nature , Expansion and contraction in trade cycle are cumulative in effect
Your Answer It is a wave like movement , These fluctuations are recurrent in nature , Expansion and contraction in trade cycle are cumulative in effect

Match The Following
* Question Correct Answer Your Answer

Pollution control certificate Government action Government action

Air pollution Negative externality Measure to reduce externality

Radio or TV signal Positive externality Private Action

Negotiation Private Action Perfect Competition in the market


Multiple Choice Single Answer
* Question The profits which must be deducted from the gross profits to arrive at net profits are
Correct Answer Monopoly Profits
Your Answer Accounting Profit

True/False
* Question The products sold by different sellers under pure competition are heterogeneous.
Correct Answer False
Your Answer True

Match The Following
* Question Correct Answer Your Answer

Public Sector Life Insurance Corporation Life Insurance Corporation

Competitive Industry Homogenous Product Non capitalist in nature

Monopoly Firm One Firm One Firm

Plant Technical Unit Technical Unit


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

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

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 divisible

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 Objective measurement of the trade-off , Maximization of difference between total benefits & total costs , Applicable only in partial equilibrium framework.

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

Multiple Choice Multiple Answer
* 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 Availability of factors of production , Tastes and preferences of producer

Multiple Choice Multiple Answer
* Question The features of a Joint Stock-Company are
Correct Answer perpetual succession , limited liability , free transferability of shares
Your Answer perpetual succession , limited liability , free transferability of shares

Select The Blank
* 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.

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

Multiple Choice Multiple Answer
* Question Average propensity to consume is characterized as follows
Correct Answer the ratio of consumption expenditure to any particular level of income , It is found by dividing consumption expenditure by income , It is expressed as the percentage of income consumed
Your Answer the ratio of consumption expenditure to any particular level of income , It is found by dividing consumption expenditure by income , It is expressed as the percentage of income consumed

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

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

Select The Blank
* Question Perfectly elastic demand curve is ________
Correct Answer horizontal
Your Answer horizontal

Multiple Choice Multiple Answer
* Question Methods of measurement of elasticity are
Correct Answer Percentage method , Point elasticity method , Total outlay expenditure method
Your Answer Percentage method , Point elasticity method , Unitary elastic demand method

Select The Blank
* 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

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

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 the measurement of profit, the differences in the concept of profit arise due to differences in cost concepts.
Correct Answer True
Your Answer True

Multiple Choice Multiple Answer
* 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

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

Multiple Choice Single Answer
* Question The economists who defined the term 'market' different from that of the traditional sense is
Correct Answer Jevons & Cournot
Your Answer Marshall

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

True/False
* Question Price discrimination is possible in perfect competition
Correct Answer False
Your Answer False

Select The Blank
* Question Supply is predominantly determined by ________.
Correct Answer stock
Your Answer demand

Select The Blank
* Question The social costs and benefits are the external economies and diseconomies resulting from the ________ activities, which are known as, "externalities"
Correct Answer firm's
Your Answer government

True/False
* 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

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

Multiple Choice Single Answer
* Question When in order to satisfy a given want , 2 or more goods are needed in combination, these goods are called
Correct Answer complimentary goods
Your Answer complimentary goods

Multiple Choice Multiple Answer
* Question Forecasts can be made at the level of
Correct Answer A firm , An industry , The nation
Your Answer A firm , An industry

Select The Blank
* 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
Friday, October 17, 2008
LIST OF ATTEMPTED QUESTIONS AND ANSWERS


Select The Blank
* Question
When there is ________ in foreign demand for the goods manufactured in a country, exports increase and prices of commodities in the country Increase.
Correct Answer
Increase
Your Answer
Increase

Select The Blank
* Question
Managerial ________ lies on the borderline of management and Economics.
Correct Answer
Economics
Your Answer
Economics

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

Multiple Choice Single Answer
* Question
If a person is habituated to the consumption of a commodity and if he cannot easily give up its use, demand for it is generally :-
Correct Answer
Inelastic
Your Answer
Inelastic

Select The Blank
* Question
Propensity to consume is defined as the relationship between consumption and ________.
Correct Answer
Income
Your Answer
Income

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

Select The Blank
* Question
Government has carried out various rounds of disinvestments of equity shareholding, realizing a total amount of ________.
Correct Answer
Rs. 20,320 crores
Your Answer
Rs. 19,320 crores

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

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

Match The Following
Question
Correct Answer
Your Answer
Pollution control certificate
Government action
Government action
Air pollution
Negative externality
Measure to reduce externality
Radio or TV signal
Positive externality
Positive externality
Negotiation
Private Action
Perfect Competition in the market

Select The Blank
* Question
Cost-benefit analysis refers to the analysis undertaken to judge any project's ________ whether government or private and find out its worth.
Correct Answer
Investments
Your Answer
Investments

Multiple Choice Multiple Answer
* Question
The entrepreneur gets Pure Profit for :-
Correct Answer
Undertaking risk & uncertainty , For co-ordination & organizing production , For innovation
Your Answer
Undertaking risk & uncertainty , For innovation , For generating employment

Multiple Choice Single Answer
* Question
The demand for a commodity depends on the prices of its substitutes which are :-
Correct Answer
Relative
Your Answer
Relative

Multiple Choice Single Answer
* Question
Under perfect competition, if demand increases, supply being constant, the price would :-
Correct Answer
Rise
Your Answer
Rise

True/False
* Question
A firm is a technical unit of a given capacity of output.
Correct Answer
False
Your Answer
False

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
Less than one
Your Answer
Less than one

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 Single Answer
* Question
When a firm’s A.R. (average revenue) is greater than A.C. (average cost), it gets a profit which is :-
Correct Answer
Super normal
Your Answer
Positive

Multiple Choice Multiple Answer
* Question
Features of Dumping are :-
Correct Answer
It is possible in the case of monopoly market , Selling same good at higher price in home market and at lower price in international market , It is encouraged with a view to promote the exports
Your Answer
It is possible in the case of monopoly market , Selling same good at higher price in home market and at lower price in international market , It is encouraged with a view to promote the exports

Multiple Choice Single Answer
* Question
According to J.M. Keynes, there is inducement to invest, when the marginal efficiency of capital is greater than :-
Correct Answer
Rate of interest
Your Answer
Rate of interest

Multiple Choice Single Answer
* Question
According to many economists, the root cause of economic problem is :-
Correct Answer
Scarcity
Your Answer
Scarcity

Multiple Choice Single Answer
* Question
Demand for several products like ice-cream, chocolate, bhel-puri depends on :-
Correct Answer
Individual tastes
Your Answer
Individual tastes

True/False
* 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

Multiple Choice Multiple Answer
* Question
The phase of recovery denotes :-
Correct Answer
More employment opportunities , Increase in profitability , Wage rate increase
Your Answer
Increase in profitability , Inventories decrease

True/False
* Question
There is no separation of ownership and management in case of a Joint Stock Company.
Correct Answer
False
Your Answer
False

True/False
* Question
Pure public goods must be in the hands of public sector only.
Correct Answer
True
Your Answer
True

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

Multiple Choice Multiple Answer
* Question
Demand Curve :-
Correct Answer
Is a graphical presentation , Slopes downward , Explain the relation between price and demand
Your Answer
Is a graphical presentation , Slopes downward , Explain the relation between price and demand

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

Select The Blank
* Question
Sole Proprietorship is also called sole ________.
Correct Answer
Tradership
Your Answer
Tradership

Select The Blank
* Question
Perfectly elastic demand curve is ________.
Correct Answer
Horizontal
Your Answer
Horizontal

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

Multiple Choice Multiple Answer
* Question
Distinction between private sector and public sector is determined on the basis of :-
Correct Answer
Economic system , Motive , Principle of pricing
Your Answer
Economic system , Motive , Principle of pricing

Multiple Choice Single Answer
* Question
For an economist, Tata Eng & Locomotive Company Ltd is a :-
Correct Answer
Firm
Your Answer
Firm

True/False
* Question
In any business, while formulating a profit policy, the possibility of emergence of rival firms must be taken into account.
Correct Answer
True
Your Answer
True

Multiple Choice Multiple Answer
* Question
Government intervention is needed in free market mechanism to :-
Correct Answer
Provide employment to all who willing to work at prevailing wage rate , Factors of production which are optimally allocated between the various industries , Get sufficient income to meet their basic needs by all
Your Answer
Provide employment to all who willing to work at prevailing wage rate , Factors of production which are optimally allocated between the various industries , Get sufficient income to meet their basic needs by all

Multiple Choice Multiple Answer
* 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 , Tastes and habits

Match The Following
Question
Correct Answer
Your Answer
Human wants
Unlimited
Unlimited
Managerial economics
Decision making and forward planning
Decision making and forward planning
Resources
Scarce
Limited
Commodities
Goods and services
Goods and services

Multiple Choice Multiple Answer
* Question
The payments made out of the Gross Profit are :-
Correct Answer
Remuneration to factors of production , Depreciation , Maintenance Charges
Your Answer
Remuneration to factors of production , Depreciation , Maintenance Charges

Multiple Choice Multiple Answer
* Question
Types of income elasticity of demand :-
Correct Answer
Negative income elasticity , Zero income elasticity , Unit income elasticity
Your Answer
Negative income elasticity , Unit income elasticity , Neutral income elasticity

Multiple Choice Single Answer
* Question
In general, the demand for necessaries is relatively :-
Correct Answer
Inelastic
Your Answer
Inelastic

Multiple Choice Multiple Answer
* Question
The causes of inflation are :-
Correct Answer
Increase in public expenditure , Increase in private expenditure , Increase in foreign demand
Your Answer
Increase in public expenditure , Increase in private expenditure , Increase in foreign demand

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 , A public good

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

Multiple Choice Single Answer
* Question
Peas & beans, groundnut oil & til oil, tea & coffee are examples of :-
Correct Answer
Substitute goods
Your Answer
Substitute goods

Multiple Choice Single Answer
* Question
When with a rise in price, the total outlay falls, or with a fall in price, the total outlay rises, elasticity of demand is :-
Correct Answer
Greater than one
Your Answer
Infinite

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