Managerial Economics - 16

Managerial Economics - 16

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


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


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

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


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



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

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



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



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



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

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

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

Multiple Choice Multiple Answer
Question
The sole proprietorship type of organization is found in
Correct 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


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



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


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


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


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


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


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


Match The Following
Question
Correct Answer

Increase in demand
Upward shift of the demand curve

Extension of demand
Downward movement on the demand curve

Decrease in Demand
Leftward shift of the demand curve

Contraction of Demand
Upward movement on the demand curve

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

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



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


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 costs which cover the cost of advertising is ________.
Correct Answer
Selling cost


Select The Blank
Question
The out of pocket costs are ________.
Correct Answer
Explicit costs
Select The Blank
Question
By ' profits', the accountant means total revenue minus________.
Correct Answer
Explicit costs



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


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


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


True/False
Question
Market price fluctuates very often.
Correct 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

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



Multiple Choice Multiple Answer
Question
16. The phase of recovery denotes
Correct 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


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




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


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 indicates- 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 - 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

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