Managerial Economics - 10

Managerial Economics - 10

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

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


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


Match The Following
Question -Correct Answer


Defence service- Indivisible


Economic effects of public goods are- Spill over effect


Selection or implementation -Step of cost benefit analysis

Production possibility frontier -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


Multiple Choice Multiple Answer
Question The term externalities may also be referred as:
Correct 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



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


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


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


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



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


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


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



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


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


Multiple Choice Single Answer
Question Complementary goods are demanded
Correct 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


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


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


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


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


Match The Following
Question -Correct Answer

Normally the isoquant slopes -upward from right to left.

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

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

A rightwards shift in supply schedule indicate-s 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

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

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



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


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

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


Multiple Choice Multiple Answer
Question Types of imperfect competition are
Correct 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



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

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

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

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


True/False
Question Saving is a private virtue
Correct 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

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


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

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


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


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 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


Managerial Economics - 9
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



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


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



Match The Following
Question
Correct Answer

Managerial Economics
Prescriptive in nature
Resources
Alternative uses


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


Motor cars
Tangible goods


Wants
Insatiable


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



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



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



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



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



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



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



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



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



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



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

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


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



Match The Following
Question
Correct Answer

Excess supply can be defined as
Quantity supplied minus quantity demanded


If demand remain unchanged on increase in supply will result in
A rise in equilibrium quantity


Market Price is a situation which
The supply is perfectly elastic


The responsiveness of demand to change in price is measured
Elasticity of demand

Unit income elasticity implies that asincome rises demand for a commodity rises
In the same proportion

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 , disinvestments


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


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


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

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



Multiple Choice Multiple Answer
Question
Features of monopolistic Competition
Correct 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 , 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
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

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

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


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

Multiple Choice Multiple Answer
Question
Recession includes
Correct Answer
The demand is halted , Increase in production of goods , 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


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




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


Multiple Choice Multiple Answer
Question
Specific organizational goals of Firms are:
Correct 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


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


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

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


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


Managerial Economics - 8
LIST OF ATTEMPTED QUESTIONS AND ANSWERS

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



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
All the buyers and sellers operating under perfect competition have knowledge
Correct Answer
perfect


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


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



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

Match The Following
Question
Correct Answer


Managerial economics
Decision making and forward planning


Resources
scarce


Commodities
goods and services


Human wants
unlimited


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



True/False
Question
The price policy under monopolistic competition is dependent on the prices charged by other rival firms
Correct Answer
True



Multiple Choice Single Answer
Question
All firms producing the same or similar product together make
Correct Answer
an industry

Multiple Choice Single Answer
Question
Joint Stock Company succession is
Correct Answer
perpetual



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



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



Multiple Choice Single Answer
Question
Macro – economics provides an exploration to the functioning of an economy in
Correct Answer
general


True/False
Question
Inflation is a great opportunity for merchants to benefit more.
Correct Answer
True



True/False
Question
The various phases of business cycles are shown by the line of cycle which moves up and down the steady growth line
Correct Answer
True



True/False
Question
In the measurement of profit, the differences in the concept of profit arise out of the differences in cost concepts
Correct Answer
True



Multiple Choice Single Answer
Question
In economics demand means desire backed by adequate
Correct Answer
purchasing power


Multiple Choice Single Answer
Question
The law of diminishing returns is applicable to agriculture provided the state of technology is given and
Correct Answer
constant



Multiple Choice Single Answer
Question
Under the monetary measures to control inflation, the R. B. I relies heavily on selective credit controls on bank loans against food grains, sugar, oils, oilseeds, cotton etc so as to discourage
Correct Answer
Speculative hoarding



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


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


True/False
Question
The opportunity cost of a product is the opportunity gained of being able to produce some other product.
Correct Answer
False



True/False
Question
The supply curve in case of unitary elastic supply is rectangular hyperbola.
Correct Answer
False



Multiple Choice Multiple Answer
Question
An Industry
Correct Answer
Is a group of firms , All firms dealing in the same line of business , The ownership and management of each firm is different

Select The Blank
Question
Under monopoly, there is ________ seller who controls the entire ________ in the market
Correct Answer
only one, supply


Select The Blank
Question
Under monopsony, there are ________ sellers but ________ buyer
Correct Answer
many, only one



Match The Following
Question
Correct Answer


Marginal utility
Addition to total utility

Total utility increases marginal
Posative and declining


At the saturation point for a commodity x the Mux is
Zero


Marginal utilities are
Demand curve of a commodity

Total utility is
Marginal utility is zero


Select The Blank
Question
By using cost-benefit analysis we can show the ________ necessary for attaining maximum ________ and optimal policy aiming at this goal
Correct Answer
measures, net wealth



Multiple Choice Multiple Answer
Question
Average propensity to consume
Correct Answer
It is defined as 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


Multiple Choice Multiple Answer
Question
Inflation means
Correct Answer
It is a phenomenon of rising prices , It is a general and dynamic phenomenon , It includes an excess of demand



Select The Blank
Question
Aggregate supply function refers to a ________ of the various minimum amounts of proceeds or ________ , which must be expected to be received by the entrepreneur class from the sale of output result
Correct Answer
schedule , revenues


Select The Blank
Question
In the ________ terminology, the ________ demand function refers to the schedule of maximum sales proceeds, which the entrepreneurial community actually does expect to be received from the sale of
Correct Answer
Keynesian, aggregate

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



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


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


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.

Multiple Choice Multiple Answer
Question
The sources of economic problems are:
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.


Multiple Choice Multiple Answer
Question
Different types of business organizations are;
Correct Answer
Private sector. , Public sector. , Joint sector.


Multiple Choice Multiple Answer
Question
Proprietary firm is
Correct Answer
Owned by a single person. , Easy to form. , An organization of single person.
Your Answer
Owned by a single person.

Multiple Choice Multiple Answer
Question
Methods of measurement of elasticity
Correct Answer
Percentage Method , Point elasticity Method , Total outlay expenditure method


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

Select The Blank
Question
Economic theory provides the basis for the ________ _ making process, there is some difference between the generalization based on abstraction and actual practices. Besides economic theory, mat
Correct Answer
decision making


Select The Blank
Question
The resources of a society consist not only of the free gifts of nature such as ________ but also of ________ and of all sorts of man made aids to further production.
Correct Answer
land and minerals, human capacity


Select The Blank
Question
Individual or sole ________ , which is also called sole- ________ , or single entrepreneurship is the most common, the simplest and the oldest form of business organisation.
Correct Answer
proprietorship, trader ship



Select The Blank
Question
Nominal cost is the ________ cost of production, it is also called expenses of production. The real cost is the ________ cost of production.
Correct Answer
money, opportunity



Select The Blank
Question
Costs may be classified as : (a) ________ , including material costs, wage cost and interest cost (b) ________ , including costs of advertising and (c) other costs, including insurance ch
Correct Answer
Production costs, Selling costs


Select The Blank
Question
The costs of self owned resources, which are employed by the ________ , are non- expenditure or , ________
Correct Answer
firm, implicit costs .