Managerial Economics - 2

Managerial Economics - 2


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


True/False
Question Under perfect competition, price is determined by the interaction of total demand and total supply in the market.
Correct Answer False


Multiple Choice Single Answer
Question Price of a product under perfect competition is determined by the interaction of total supply and
Correct Answer total demand


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


Multiple Choice Multiple Answer
Question Keynes’s theory of employment explains
Correct Answer Effective demand , Aggregate supply , Aggregate demand


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


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

Multiple Choice Multiple Answer
Question Features of the firm are
Correct Answer It is a business unit organized under one ownership , It is a sole proprietorship , It is a partnership or joint stock company


Multiple Choice Single Answer
Question Whether the economy's capacity to produce goods and services is growing from year to year or remaining static is studied under the
Correct Answer Theory of economic growth


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


Multiple Choice Multiple Answer
Question Assumptions underlying the law of Supply are
Correct Answer The cost of production is unchanged , No change in technique of production , Government policies are unchanged


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


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


Multiple Choice Single Answer
Question Liability of a sole trader is
Correct Answer unlimited


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.


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


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


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


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


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


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



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


True/False
Question The Keynesian theory emphasizes effective supply as a crucial factor in determining the level of income and employment.
Correct Answer False


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


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


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


Match The Following
Question -Correct Answer

Resource allocation decisions in free market economy -Theory of price

Economic problem -Universal l

Managerial Economics -Applied branch of knowledge

Inflation -Reduction in purchasing power
Waste of resources- Involuntary unemployment


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


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


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


Multiple Choice Single Answer
Question The suggestion of maximization of balanced growth rate as another alternative objective of a firm's profit is suggested by
Correct Answer Prof. Morris


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


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


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


True/False
Question The congress government led by Narsimha Rao announced the New Industrial Policy in July 1991.
Correct Answer True


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


True/False
Question The distinction between fixed costs and variable costs is relevant in the short period only.
Correct Answer True


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


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


Multiple Choice Single Answer
Question Often monopolies purposely keep certain factors of production idle creating artificial scarcities of their products as a result the prices
Correct Answer rise


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


Match The Following
Question -Correct Answer

Human wants -unlimited

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

Managerial economics- Decision making and forward planning
Resources -scarce
Commodities- goods and services


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



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



Multiple Choice Multiple Answer
Question Features of Market are
Correct Answer Place where buyers and sellers meet each other , A building where a number of shops dealing in a particular commodity exist , A place where transaction of goods and services is undertaken


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


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

Managerial Economics - 1
LIST OF ATTEMPTED QUESTIONS AND ANSWERS



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


Multiple Choice Multiple Answer
Question
Accounting profit includes :-
Correct Answer
Wages , Rent , Interest


True/False
Question
In experimental price approach the firms takes some cognizance of the demand for the product and proceeds to fix a price by a trial and error method.
Correct Answer
True


Multiple Choice Multiple Answer
Question
Defects of market system:-
Correct Answer
Inequalities of income and wealth , Emergence of monopolies , Failure to provide full employment


Multiple Choice Single Answer
Question
In case of perfectly elastic supply, the supply curve is :-
Correct Answer
Horizontal


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


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


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


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


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



Multiple Choice Single Answer
Question
Under perfect competition, generally demand and supply act and react upon each other and determine the price
Correct Answer
equilibrium


Multiple Choice Multiple Answer
Question
Factors leading to differences in the economic & the traditional concepts of valuation are :-
Correct Answer
Inventory Valuation , Depreciation , Unaccounted value changes in the assets & liabilities


Select The Blank
Question
Super-normal profit is also called ________.
Correct Answer
Excess profit


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


Match The Following
Question
Correct Answer

Human wants
unlimited

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

Managerial economics
Decision making and forward planning

Resources
scarce

Commodities
goods and services


True/False
Question
Consumer’s protection involves protection to the consumers from unfair trade practices.
Correct Answer
True


Select The Blank
Question
When Government repays old loans, the purchasing power at the disposal of the people ________.
Correct Answer
Increases


True/False
Question
The law of supply is not hypothetical.
Correct Answer
False


Multiple Choice Single Answer
Question
A firm gets an opportunity to produce multiple products because changes in business activity in a firms is :-
Correct Answer
Cyclical



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


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


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


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


Select The Blank
Question
________ effects are those externalities which flow from the production or use of the good to other parties or economic units.
Correct Answer
Third party


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

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


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



Multiple Choice Multiple Answer
Question
Demand is determined by :-
Correct Answer
Price of the product , Relative prices of other goods , Tastes and habits

Multiple Choice Multiple Answer
Question
Different types of Elasticity of Demand are :-
Correct Answer
Cross elasticity of demand , Price elasticity of demand , Income elasticity of demand

Multiple Choice Single Answer
Question
In case of a Joint-Stock Company, the liability of share holders is :-
Correct Answer
Limited


Multiple Choice Single Answer
Question
Expansion of supply is shown by the movement in the supply curve which is :-
Correct Answer
Upward



Multiple Choice Single Answer
Question
Saving is a :-
Correct Answer
Private virtue



Multiple Choice Single Answer
Question
According to the Government, the building up of inflationary pressure during the Nineties was attributed to :-
Correct Answer
Higher Fiscal deficit


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

Multiple Choice Single Answer
Question
The income which a businessman might expect from the second best alternative use of his resources is called as :-
Correct Answer
Opportunity cost


Select The Blank
Question
Advertising forms an integral part of decision-making and________.
Correct Answer
Forward - planning


Multiple Choice Multiple Answer
Question
Exceptions to the Law of Demand are :-
Correct Answer
Griffin goods , Articles of snob appeal , Speculation


Select The Blank
Question
True inflation starts only after reaching ________.
Correct Answer
Level of full employment



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


Multiple Choice Multiple Answer
Question
Assumptions of the Law of Demand are :-
Correct Answer
No change in consumer’s income , No change in consumer’s preferences , No change in fashion


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


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


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


True/False
Question
Under the New Industrial Policy, in order to invite foreign investment in high priority industries, it was decided to provide approval for direct foreign investment upto 51% equity in such industries.
Correct Answer
True


Managerial Economics - 1
LIST OF ATTEMPTED QUESTIONS AND ANSWERS



Multiple Choice Single Answer
Question
The concept of Perfect competition includes all the features of :-
Correct Answer
Pure competition



Multiple Choice Single Answer
Question
An entrepreneur may earn high profits just by luck, say because of outbreak of war. This is known as :-
Correct Answer
Chance Profits



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


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


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


True/False
Question
In macro – economic analysis the behavior of economic agents such as firms, households and government is seen in total, disregarding details at particular level.
Correct Answer
True


True/False
Question
Changes in the value of money because of inflation, make inventory valuation of finished products difficult.
Correct Answer
True


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



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


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


Multiple Choice Multiple Answer
Question
According to Keynes there are three motives for holding cash for liquidity preference :-
Correct Answer
The speculative motive , The transactions motive , The precautionary motive


Multiple Choice Single Answer
Question
If the substitutes are relatively costly then the demand for the commodity in question will be :-
Correct Answer
More


Multiple Choice Multiple Answer
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


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


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



True/False
Question
The prosperity phase is characterized by rise in the level of employment.
Correct Answer
True


Select The Blank
Question
Baumol has suggested as an alternative objective for profit maximization, the maximization of ________.
Correct Answer
Sales



Multiple Choice Single Answer
Question
The profit which is surplus of revenue over and above all paid out cost is :-
Correct Answer
Accounting Profit



Select The Blank
Question
In perfect competition various factors of production are assumed to be ________.
Correct Answer
Perfectly mobile

Select The Blank
Question
Keynes, on the basis of a fundamental psychological law, observed that as income ________, consumption Increases.
Correct Answer Increases

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


True/False
Question
Pure private goods are completely divisible and to them the principle of exclusion applies in full measure.
Correct Answer
True



Select The Blank
Question
The taxation & public expenditure policies are called as ________ ..
Correct Answer
Budgetary Policy


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


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



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


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


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



True/False
Question
The government also fixes minimum procurement prices for major crops on the recommendation of the Agricultural Prices Commission (APC).
Correct Answer
True



Multiple Choice Multiple Answer
Question
According to Lionel Robbins definition of economics, "Economics is a science which :-
Correct Answer
Studies human behaviour , Relationship between ends and scares resources , Scarce means have alternate uses



Select The Blank
Question
Under perfect competition, price is determined by the interaction of total demand and ________.
Correct Answer
Total supply
Multiple Choice Multiple Answer
Question
Features of monopolistic Competition are :-
Correct Answer
Fairly large number of firms , Product differentiation , Selling costs are existed


Multiple Choice Multiple Answer
Question
Steps in cost benefit analysis are :-
Correct Answer
Identification of a project , Formulation of the project , Appraisal and selection of the project

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


Multiple Choice Single Answer
Question
During a period of rising prices (inflation), the goods and services are :-
Correct Answer
Scarce


Multiple Choice Single Answer
Question
The cost recorded in the books of accounts are considered as :-
Correct Answer
Explicit costs

Multiple Choice Single Answer
Question
Variable cost are those costs which vary with the level of :-
Correct Answer
Output


Select The Blank
Question
Open market operations measures are ________.
Correct Answer
Quantitative credit control


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



True/False
Question
The demand for life saving drugs is elastic.
Correct Answer
False


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


Match The Following
Question
Correct Answer


Resource allocation decisions in free market economy
Theory of price


Economic problem
Universal

Managerial Economics
Applied branch of knowledge

Inflation
Reduction in purchasing power

Waste of resources
Involuntary unemployment


Multiple Choice Single Answer
Question
According J.B.Clark, profit is the reward paid for :-
Correct Answer
Dynamism


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



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


Match The Following
Question
Correct Answer

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

Managerial economics
Decision making and forward planning

Resources
scarce

Commodities
goods and services


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