Managerial Economics - 25

Managerial Economics - 25

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

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


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

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


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


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


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


Select The Blank
Question By ' profits', the economist means total revenue minus ________.
Correct 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


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


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

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

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


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

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


Match The Following
Question -Correct Answer


Price leadership -Oligopoly y


Surgical- equipment Refusal pricing


Intuitive- pricing psychological & subjective approach

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


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


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


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


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


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


True/False
Question Market price fluctuates very often.
Correct 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


Match The Following
Question- Correct Answer

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

Trade Cycle- Recession

Rise in costs due to an increase in factor prices- 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.

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


Select The Blank
Question Sole Proprietorship which is also called sole ________
Correct 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


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


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


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


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


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


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


Multiple Choice Multiple Answer
Question Accounting profit includes
Correct 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



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.


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 Slope of supply curve is
Correct Answer positive


Multiple Choice Multiple Answer
Question Types of imperfect competition are
Correct 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

Managerial Economics - 23
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 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


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


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


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


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


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


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


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

Match The Following
Question- Correct Answer

Pollution control certificate- Government action


Air pollution- Negative externality

Radio or TV signal -Positive externality

Negotiation -Private Action


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

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


Match The Following
Question- Correct Answer


Public Sector- Life Insurance Corporation


Competitive Industry -Homogenous Product


Monopoly Firm- One Firm


Plant -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


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


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


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


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


Multiple Choice Multiple Answer
Question The features of a Joint Stock-Company are
Correct 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.


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



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


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


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



Select The Blank
Question Perfectly elastic demand curve is ________
Correct 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


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


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



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


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 Economists like A.C.Harberger have shown that the cost benefit analysis can be applied to ________ analysis.
Correct 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


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


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


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



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


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 Change in income of a person may result in demand for goods to
Correct Answer change


Multiple Choice Single Answer
Question Managerial economics aims at providing guidance to the firms for
Correct 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


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


Managerial Economics - 23
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



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


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


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


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


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


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



Match The Following
Question
Correct Answer


Pollution control certificate
Government action

Air pollution
Negative externality


Radio or TV signal
Positive externality

Negotiation
Private Action


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

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


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


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



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



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



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




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

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



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

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



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

Select The Blank
Question
The salary of the proprietor or rent on own land are the ________.
Correct 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


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



Select The Blank
Question
Perfectly elastic demand curve is ________.
Correct 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
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


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



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


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




Match The Following
Question
Correct Answer

Human wants
Unlimited

Managerial economics
Decision making and forward planning

Resources
Scarce

Commodities
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

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



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


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
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,

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