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MCQs
103 – ECONOMIC ANALYSIS FOR BUSINESS DECISIONS
1. In a free-market economy the allocation of resources is determined by:

a. Votes taken by consumers
U1- Basic Concepts of Economics
b. A central planning authority
c. By consumer preferences
d. The level of profits of firms
2. A rational person does not act unless:

a. The action is ethical
b. The action produces marginal costs that exceed marginal benefits
c. The action produces marginal benefits that exceed marginal costs
d. The action makes money for the person
3. Economics is a ----- science which deals with human wants and their satisfaction.
a. Social
b. Political
c. Natural
d. Physical
4. ------ defined economics as a study of mankind in the ordinary business of life.

a. Adam smith
b. Lionel Robbins
c. Samuelson
d. Alfred Marshall
5. The growth of an economy is indicated by an

a. Increase in savings
b. Increase in investment
c. Increase in general prices
d. Increase in national income
6. -----------equals revenue minus all explicit costs.

a. Accounting profit
b. Economic profit
c. Normal profit
d. Loss
7. The father of New Economics is :

Father of economics- Adam Smith
a. Marshall Father of New Economics- JM Keynes
b. J.M.Keynes a. Lionel Robbins.
b. Adam Smith.
c. Adam Smith c. Alfred Marshal
d. Karl Marx
8. The ------------------ problem refers to the possibility that owners and their managers may
have different objectives.
a. Company- Manager problem
b. Principal-Agent Problem
c. Firm-Employee problem
d. Problem of different objectives
9. Economic profit refers to ------------ minus all relevant costs , both explicit and implicit.
a. Profit
b. Cost
c. Expenses
d. Revenues
10. The interaction of individuals and firms in a market can be described as a -----------------
of money, goods and services and resources through product and factor markets.
a. Constant flow
b. Stable flow
c. Circular Flow
d. Regular Flow
11. ----------------- focuses on the behavior of the individual actors on the economic stage , that
is, firms and individuals and their interaction in markets.
a. Macroeconomics
b. Microeconomics
c. Managerial Economics
d. Economics
12. In free market economy, the organization and interaction of producers and consumers is
accomplished through the -------------- system.
a. Price
b. Cost
c. Profit
d. Revenue
13. An economic system:

a. Requires a grouping of private markets linked to one another.
b. Is a particular set of institutional arrangements and a coordinating mechanism used to
respond to the economizing problem.
c. Requires some sort of centralized authority (such as government) to coordinate economic
activity.
d. Is a plan or scheme that allows a firm to make money at some other firm's expense
14. The regulatory mechanism of the market system is:

a. Self-interest.
b. Private property.
c. Competition.
d. Specialization.
15. Which of the following is not an economic cost?

a. Wages.
b. Rents.
c. Economic profits.
d. Payments made to the entrepreneur for organizing production
16. From society's point of view the economic function of profits and losses is to:
a. Promote the equal distribution of real assets and wealth.
b. Achieve full employment and price level stability.
c. Contribute to a more equal distribution of income.
d. Reallocate resources from less desired to more desired uses.
17. The invisible hand refers to the:

a. Fact that the U.S. tax system redistributes income from rich to poor.
b. Notion that, under competition, decisions motivated by self-interest promote the social
interest.
c. Tendency of monopolistic sellers to raise prices above competitive levels.
d. Fact that government controls the functioning of the market system.
18. The invisible-hand concept suggests that:

a. Market failures imply the need for a national economic plan.
b. Big businesses are inherently more efficient than small businesses.
c. The competitiveness of a capitalistic market economy invariably diminishes over time.
d. Assuming competition, private and public interests will coincide
19. Two major virtues of the market system are that it:
a. Allocates resources efficiently and allows economic freedom.
b. Results in an equitable personal distribution of income and always maintains full
employment.
c. Results in price level stability and a fair personal distribution of income.
d. Eliminates discrimination and minimizes environmental pollution.
20. The simple circular flow model shows that:

a. Households are on the buying side of both product and resource markets.
b. Businesses are on the selling side of both product and resource markets.
c. Households are on the selling side of the resource market and on the buying side of the
product market.
d. Businesses are on the buying side of the product market and on the selling side of the
resource market.
21. The two basic markets shown by the simple circular flow model are:
a. Capital goods and consumer goods.
b. Free and controlled.
c. Product and resource.
d. Household and business.
22. Which of the following is a limitation of the simple circular flow model?
a. Product markets are ignored.
b. Resource markets are ignored.
c. The determination of product and resource prices is not explained.
d. Households are included, but not businesses.
23. In economics the central problem is:

a. Money.
b. Scarcity.
c. Allocation.
d. Production.
24. Macroeconomics deals with:

a. The behavior of firms.
b. Economic aggregates.
c. The behavior of the electronics industry.
d. The activities of individual units.
25. Microeconomics is not concerned with the behavior of:

a. Consumers.
b. Aggregate demand.
c. Firms.
d. Industries
26. The total demand for goods and services in an economy is known as:
a. Aggregate demand.
b. Gross national product.
c. Economy-wide demand.
d. National demand
27. Unemployment means that:

a. People are not willing to work at the going wage rate.
b. At the going wage rate, there are people who want to work but cannot find work.
c. There are some people who will not work at the going wage rate.
d. There is excess demand in the labour market.
28. Opportunity cost is

a. A cost that cannot be avoided, regardless of what is done in the future.
b. The cost incurred in the past before we make a decision about what to do in the future.
c. That which we forgo, or give up, when we make a choice or a decision.
d. The additional benefit of buying an additional unit of a product
29. The circular flow of goods and incomes shows the relationship between:
a. Firms and households.
b. Goods and services.
c. Income and money.
d. Wages and salaries.
30. In a planned or command economy, all the economic decisions are taken by the:
a. Workers.
b. Consumers.
c. Voters.
d. Government.
31. Which one of the following is a normative statement?

a. The richest 10 per cent of the population has had a bigger percentage increase in incomes
over the past 10 years than the poorest 10 per cent.
b. The proportion of people's income paid in taxes is higher under this government than
under the previous one.
c. Inflation is rising.
d. Inequality in the distribution of income is a more serious problem than unemployment
32. Continues consumption of homogeneous product is a assumption for:
a. Law of Demand.
b. Law of Supply.
c. Law of Diminishing Marginal Utility.
33. Goods and Services bought and sold in:

a. Product Market.
b. Factor Market.
c. Capital Market
d. Money Market
34. In Product market money flows from:

a. Individual to firm.
b. Business to households.
c. Government to household.
35. In factor market suppliers are:

a. Firms.
b. Households.
c. Government
36. In economic activities which are the outflows:

a. Government spending.
b. Investment.
c. Savings.
37. Indian economy is:

a. Capitalist Economy
b. Socialist Economy
c. Mixed Economy
38. Father of Economics:

a. Lionel Robbins.
b. Adam Smith.
c. Alfred Marshal
39. Implicit Cost added in:

a. Accounting cost.
b. Economic cost.
c. Both
40. Business Economics is also known as………….

a. Managerial Economics
b. Economics for Executives
c. Economic analysis for business decisions
d. All the above
41. State whether economics is

a. A positive science only
b. Neither a positive nor normative science
c. A science but not art
d. A science or an art depending on who uses economics and for what purpose
42. The branch of economics wherein mathematics and statistics are used to measure and
analyze economics activities is called……………..
a. Applied Economics
b. Econometrics
c. Statistics
d. Macro Economics.
43. The opportunity cost of a machine which can produce only one product is:
a. Low
b. Infinite
c. High
d. Medium
44. It is defined as a state of knowledge in which one or more alternatives result in a set of
specific outcomes but where the probabilities of the outcomes are neither known nor
meaningful.
a. Risk
b. Uncertainty
c. Peril
d. All of the above.
45. Opportunity cost is term which describes

a. A bargain for a factor of production
b. Costs related to an optimum level of production
c. Average variable cost
d. None of these
46. It is also known as prescriptive economics

a. Positive Economics
b. Micro economics
c. Normative economics
d. Economics.
47. ……cost are also known as Imputed Costs

a. Opportunity
b. Marginal
c. Total
d. Historical
48. There are ……branches of economics

a. 2
b. 3
c. 4
d. 6
49. It is the study of economics actions of individuals and small groups of individuals.
a. Micro-Economics
b. Macro-Economics
d. Business Economics
50. An input should be so allocated that the value added by the last unit is the same in all
cases.
a. Opportunity Cost Principle
b. Equi-Marginal Principle
Incremental Principle
c. Discounting Principle
51. The term Èconomics‟ in English language has its origin in ------word.
a. Greek
b. Italic
c. Latin
d. Indian
52. Economics includes the following economic activities:

a. Production
b. Consumption
c. Exchange
d. All of the above
53. It refers to the determination of prices of all goods and services by the interaction of the
forces of demand and supply without any external interference.
a. Product-mechanism
b. Price-mechanism
c. Cost-mechanism
d. None of these
54. The principle reasons behind economic problems

a. Unlimited wants
b. Limited or Scarce of Means
c. Alternatives Uses of Means
d. All of the above
55. Income flow is also known as------.

a. Product Flow
b. Money flow
c. Profit flow
d. Cash flow
56. Flows of the factor of production and the goods and services between the different sectors
is - -----.
a. Real flow
b. Money flow
c. Cash flow
d. Product flow
57. It is also called output flow or real flow

a. Profit flow
b. Cash flow
c. Product flow
d. None of these
58. Accounting profit=------------Explicit Costs

a. Total Revenue
b. Total Cost
c. Implicit cost
d. None of these
59. According to Professor S.E.Landsbury, “Firm is an organization that produces and sells
goods with the goal of------its profits”.
a. Minimizing
b. Maximizing
c. Optimizing
d. All of the above
60. According to profit maximization theory of the firm, management.

a. Decides output level which maximizes revenue
b. Output level which minimizes cost.
c. Output level which maximizes difference between the two
d. None of these
61. According to Simon if a firm fails to achieve its target initially results in:
a. A sense of helplessness
b. Search behavior
c. Sacking of its managerial team
d. Appropriate revision of the aspiration level
62. Managerial utility function is expressed as:

a. U = S (S,M,I)
b. U = S (S,M)
c. U = f (S,M,I)
d. U = F(S,M,I)
63. It is the difference between total revenue and total economic cost
a. Accounting Profit
b. Economic Profit
c. Gross Profit
d. Net Profit
64. Invisible hand theory is given by----------

a. Lord Robbins
b. Samuelson
c. Marshall
d. Adam Smith
65. Managers are Agent when:
a. Managers and workers.
b. Shareholders and managers.
c. Managers and contractors.
66. Accounting cost include:

a. Owner`s land for company establishment.
b. Depreciation
c. Management skill of a owner
67. If economic profit equal to zero then:

a. Owners receive a profit more than their opportunity cost.
b. Owners receive a profit less than their opportunity cost.
c. Owners receive a profit equal to their opportunity cost.
68. Trade-offs are required because wants are unlimited and resources are:
a. Economical.
b. Unlimited
c. Efficient
d. Marginal e. Scarce
69. Economics is the study of:

a. how society manages its unlimited resources.
b. how to reduce our wants until we are satisfied.
c. how society manages its scarce resources.
d. how to fully satisfy our unlimited wants. e. how to avoid having to make trade-offs
70. Which of the following statements regarding the circular-flow diagram is true?
a. If Vijay works for XYZ Solutions Ltd. and receives a salary payment, the transaction
takes place in the market for goods and services.
b. If XYZ Solutions Ltd. sells a military aircraft, the transaction takes place in the market
for factors of production.
c. None of these answers.
d. The factors of production are owned by households.
e. The factors of production are owned by firms.
71. Which of the following is not a Productive Resource?

a. Labour
b. Land
c. Money
d. Capital e. All of these answers are factors of production.
72. Which of the following issues is related to microeconomics?

a. The impact of oil prices on car production
b. The impact of money on inflation
c. The impact of technology on economic growth
d. The impact of the deficit on saving
73. The word economy comes from the Greek word for
a. "Environment."
b. "One who participates in a market."
c. "One who manages a household."
d. "Conservation.“
74. Economics deals primarily with the concept of

a. Poverty.
b. Scarcity.
c. Change.
d. Power
75. The opportunity cost of an item is

a. The number of hours needed to earn money to buy it.
b. What you give up to get that item.
c. Always less than the dollar value of the item.
d. Always equal to the dollar value of the item.
76. Factors of production are :

a. Inputs into the production process.
b. Weather, social, and political conditions that affect production.
c. The physical relationships between economic inputs and outputs.
d. The mathematical calculations firms make to determine production.
77. In the circular-flow diagram,

a. Firms are sellers in the resource market and the product market.
b. Households are sellers in the resource market.
c. Firms are buyers in the product market.
d. Spending on goods and services flow from firms to households.
78. In the circular-flow diagram
a. Spending on goods and services flow from firms to households.
b. Goods and services flow from households to firms.
c. Factors of production flow from firms to households.
d. Income from factors of production flows from firms to households.
79. Scarcity is a condition that exists when

a. There is a fixed supply of resources.
b. There is a large demand for a product.
c. Resources are not able to meet the entire demand for a product.
80. Company goals that are concerned with creating employee and customer satisfaction and
maintaining a high degree of social responsibility are called ___________ objectives
a. Social
b. Noneconomic
c. Welfare
d. Public Relations
81. The value of an entrepreneur‟s resources that she uses in production are known as:
a. Explicit costs
b. Sunk costs.
c. Operating expenses.
d. Technological expenses.
e. Implicit costs.
82. One of the most important differences between a firm‟s economic profit and its
accounting profit is the subtraction of:
a. Costs incurred when hiring labor, capital, and land.
b. Any explicit cost incurred by the entrepreneur for risk taking.
c. Any implicit charges for the use of capital owned by the entrepreneur.
d. Any taxes on the retained earnings of the firm.
e. The costs of distributing the firm‟s output.
83. That profit functions as an incentive for innovation was among the key contributions to
economic thought by:
a. Karl Marx.
b. Frank Knight.
c. Joseph Schumpeter.
d. Adam Smith.
84. Which two of the following are characteristics of the „principal-agent‟ problem?
a) Ownership and control in hands of same people
b) Ownership and control in hands of different people
c) Shareholders and managers pursue different objectives
d) Shareholders and managers pursue same objectives
e) Sole traders are the dominant form of business organization
a. b) and e)
b. b. b) and d)
c. c. b) and c)
d. d. a) and e)
e. e. a) and c)
85. Economic profit is_________________ .

a. Calculated by subtracting implicit costs of using owner-supplied resources from the
firm's total revenue.
b. a theoretical measure of a firm's performance and has little value in real world decision-
making.
c. Generally larger than accounting profit.
d. Negative when costs exceed revenues.
86. Economic profit is…

a. The difference between total revenue and explicit costs.
b. The difference between total revenue and the opportunity cost of all the resources used in
production.
c. The difference between accounting profit and explicit costs.
d. The difference between accounting profit and the opportunity cost of the market-supplied
resources used by the firm.
87. The principal-agent problem arises when…

a. The principal and the agent have different objectives
b. The principal cannot decide whether the firm should seek to maximize the expected
future profits of the firm or maximize the price for which the firm can be sold.
c. The principal cannot enforce the contract with the agent or finds it too costly to monitor
the agent.
d. Both a and c
88. Moral hazard…

a. Occurs when managers pursue profit maximization without regard to the interests of
society in general.
b. Is the cause of principal-agent problems.
c. Occurs only rarely in modern corporations.
d. Exists when either party to a contract has an incentive to cancel the contract.
89. Economic profit is the best measure of a firm's performance because…

a. Economic profit fully accounts for all sources of revenue.
b. Implicit costs are generally too difficult to measure accurately.
c. The opportunity cost of using ALL resources is subtracted from total revenue.
d. Only explicit costs influence managerial decisions since, in general, only explicit costs
can be subtracted from revenue for the purposes of computing taxable profit.
90. Business Economics is also known as _______

b. Economics for Executive
c. Economic Analysis for Business Decision
d. All the above
91. It is the study of economic actions of individuals and small groups of individuals:
a. Micro – Economics
b. Macro Economics
92. The principal reasons behind economic problems

a. Unlimited Wants
b. Limited or Scarce Resources
c. Alternative uses of Means
d. All the above
93. Invisible hand theory is give by :

a. Lord Robbins
b. Samuelson
c. Marshal
d. Adam Smith
94. The ultimate effect of the "invisible hand" of Adam Smith is that, in a competitive
economy, everyone:
a. Benefits if each acts in his/her own interest.
b. Will increase their profits in a free market.
c. Should act to maximize economic growth.
d. Should act to promote the public interest.
95. The three fundamental questions of economic organization are:
a. When, for whom, and how.
b. How, what, and for whom.
c. Who, how, and when.
d. What, who, and why.
96. „„Economics is the science, which studies human behaviours as a relationship between
ends and scarce means which have alternative uses.‟‟ This definition of Economics is
given by,
a. Lord Robbins
b. Samuelson
c. Alfred Marshal
d. Adam Smith
97. Which of the following is true regarding the circular flow model?
a. Households provide the demand for the factor market and business provide the supply for
the goods and services market.
b. Households provide the demand for the goods and service market and business provides
the supply for the factor market.
c. Households provide the supply for the factor market and business provides the supply for
the goods and service market
d. Households provide both the supply and demand for the goods and services market
98. Income and revenues that are created within a country

a. always will remain within that country
b. Can leave that country only when goods are exported.
c. Can leave that country when goods are imported
d. Can leave that country when capital flows into that country's financial institutions.
99. In a circular flow model, the real variables are:

a. Money that flows from the factor market to the households.
b. Only the goods and services that are produced.
c. Only the resources that are used.
d. Both the goods and services produced and the resources that are used.
100. Money is
a. Backed by gold in Fort Knox
b. The same as income.
c. The value of all coins and currency in circulation at any time.
d. Anything that is generally accepted as a medium of exchange.
101. The development of money as a medium of exchange has facilitated the expansion of
trade because
a. Holding money increases people's income
b. No other mediums of exchange are available
c. Money eliminates the "double coincidence of wants" problem
d. Holding money increases people's wealth
102. As the interest rate falls, people hold ________ money instead of bonds because the
opportunity cost of holding money has ________.
a. More; fallen
b. More; risen
c. Less; fallen
d. Less; risen
103. The concept of opportunity cost:

a. Suggests a major increase in public health-care spending means an expansion in other
areas will be harder to achieve.
b. Suggests all our wants can be achieved.
c. Would be irrelevant if we eliminated poverty.
d. Is relevant only for a capitalist economy like the United States.
104. Inflation is:

a. A decrease in the overall level of economic activity.
b. An increase in the overall level of economic activity.
c. An increase in the overall price level.
d. A decrease in the overall price level.
105. A recession is:

a. period of declining unemployment.
b. A period of declining prices
c. A period during which aggregate output declines
d. A period of very rapidly declining prices.
106. The statement "The unemployment rate for teens is higher than that for adults" is
a. A normative statement.
b. A political statement.
c. An ethical statement.
d. A positive statement
107. Which of the following is a positive statement?
a. Low rents will restrict the supply of housing.
b. Housing costs too much.
c. Low rents are good because they make apartments more affordable.
d. Owners of apartment buildings ought to be free to charge whatever rent they want.
108. A normative statement is

a. One that does not use the ceteris paribus clause.
b. About what ought to be.
c. Always true.
d. About what is
109. The task of economic science is to discover ________ that are consistent with ________.
a. Positive statements; normative statements
b. Positive statements; what we observe
c. Normative statements; positive statements
d. Ways to make money; the law
110. Economic models

a. Are better if they include most of the detail of the real economy.
b. Rely on simplification.
c. Do not address questions about the economy.
d. Make no assumptions that have not been prove
111. An economic theory is

a. A generalization that summarizes what we understand about economic choices.
b. A positive statement that cannot use the ceteris paribus clause.
c. Usually more complex than the real world.
d. Always a mathematical, or nonverbal, model.
112. Ceteris paribus is the Latin expression for

a. A statement about the way the economic world ought to be.
b. An expression that means "other things being equal."
c. The (false) statement that what is true of the parts is true of the whole or what is true of
the whole is true of the parts.
d. The error of reasoning that a first event causes a second event because the first event
113. Opportunity cost means

a. The accounting cost minus the marginal benefit.
b. The highest-valued alternative forgone.
c. The monetary costs of an activity.
d. The accounting cost minus the marginal cost
114. Economics is best defined as the study of how people, businesses, governments, and
societies
a. Make choices to cope with scarcity.
b. Attain wealth.
c. Choose abundance over scarcity.
d. Use their infinite resources.
115. Scarcity requires that people must

a. Trade.
b. Compete.
c. Cooperate.
d. Make choices
116. Microeconomics focuses on all of the following EXCEPT

a. The effect of increasing the money supply on inflation.
b. The purchasing decisions that an individual consumer makes.
c. The effect of an increase in the tax on cigarettes on cigarette sales.
d. The hiring decisions that a business makes.
117. Entrepreneurs do all of the following EXCEPT

a. Bear risk from business decisions.
b. Own all the other resources.
c. Come up with new ideas about what, how, when and where to produce.
d. Organize labor, land, and capital.
118. Principal Agent Problem is related to…….

a. Managers and Owner s
b. Suppliers and Buyers
c. Producers and Sellers
d. LIC Agents
119. Invisible Hand theory was described by …….

a. Robert Anthony
b. Adam Smith
c. Amartya Sen
d. C.K. Pralhad
120. PV in Unit number one stands for ………
a. Postal Volume
b. Past Value
c. Programmable Value
d. Present Value
121. Which of the following factor is important for demand along other factors?
a. Selling Power
b. Ability to Buy
c. Product Development
d. New product Launch
122. The law of demand states that an increase in the price of a good:
a. Increases the supply of that good.
b. Decreases the quantity demanded for that good.
c. Increases the quantity supplied of that good.
d. None of these answers.
123. The law of supply states that an increase in the price of a good:
a. None of these answers.
b. Increases the quantity supplied of that good.
c. Decreases the demand for that good.
d. Decreases the quantity demanded for that good.
124. If an increase in consumer incomes leads to a decrease in the demand for camping
equipment, then camping equipment is:
a. A normal good.
b. None of these answers.
c. An inferior good.
d. A substitute good
e. A complementary good.
125. Which of the following shifts the demand for watches to the right?
a. An increase in the price of watches
b. None of these answers
c. A decrease in the price of watch batteries if watch batteries and watches are complements
d. A decrease in consumer incomes if watches are a normal good
126. If the price of a good is above the equilibrium price

a. There is a surplus and the price will rise.
b. There is a shortage and the price will fall.
c. There is a shortage and the price will rise.
d. The quantity demanded is equal to the quantity supplied and the price remains
unchanged.
127. If the price of a good is equal to the equilibrium price,

a. There is a shortage and the price will fall.
b. The quantity demanded is equal to the quantity supplied and the price remains
unchanged.
c. There is a surplus and the price will rise.
d. There is a shortage and the price will rise.
128. An inferior good is one for which an increase in income causes a(n)
a. Decrease in supply.
b. Increase in demand.
c. Increase in supply.
d. Decrease in demand
129. If a small percentage increase in the price of a good greatly reduces the quantity demanded
for that good, the demand for that good is
a. Income inelastic.
b. Price inelastic.
c. Price elastic.
d. Unit price elastic.
130. The price elasticity of demand is defined as

a. The percentage change in the quantity demanded divided by the percentage change in
income.
b. The percentage change in income divided by the percentage change in the quantity
demanded.
c. The percentage change in the quantity demanded of a good divided by the percentage
change in the price of that good.
131. In general, a flatter demand curve is more likely to be:

a. Price elastic.
b. Unit price elastic.
d. Price inelastic.
132. In general, a steeper supply curve is more likely to be
a. Price elastic.
c. Unit price elastic.
d. Price inelastic.
133. Which of the following would cause a demand curve for a good to be price inelastic?
a. The good is a luxury.
b. There are a great number of substitutes for the good.
c. The good is a necessity.
d. The good is an inferior good.
134. If the cross-price elasticity between two goods is negative, the two goods are likely to be:
a. Substitutes.
b. Complements.
c. Necessities.
d. Luxuries
135. If there is excess capacity in a production facility, it is likely that the firm's supply curve
is:
a. Price inelastic
d. Price elastic.
136. If the income elasticity of demand for a good is negative, it must be:
a. An elastic good.
b. An inferior good
c. A normal good.
d. A luxury good.
137. If consumers think that there are very few substitutes for a good, then
a. Supply would tend to be price elastic.
c. Demand would tend to be price inelastic
d. Demand would tend to be price elastic.
138. The sensitivity of the change in quantity demanded to a change in price is called:
a. Income elasticity.
b. Cross-elasticity.
c. Price elasticity of demand.
d. Coefficient of elasticity.
149. A product that is similar to another, and can be consumed in place of it is called
a. A normal good.
b. An inferior good.
c. A complementary good.
d. A substitute good.
140. Two goods are _____________ if the quantity consumed of one increases when the price
of the other decreases.
a. Normal
b. Superior
c. Complementary
d. Substitute
141. If input prices increase, all else equal,

a. quantity supplied will decrease.
b. supply will increase.
c. supply will decrease.
d. demand will decrease.
142. Which of the following would decrease the supply of wheat?

a. A decrease in the price of pesticides.
b. An increase in the demand for wheat.
c. A rise in the price of wheat.
d. An increase in the price of corn.
e. None of the above
143. If the price elasticity of demand for a good is .75, the demand for the good can be
described as:
a. Normal.
b. Elastic.
c. Inferior
d. Inelastic.
144. When the price of a product is increased 10 percent, the quantity demanded decreases
15 percent. In this range of prices, demand for this product is:
a. Elastic
b. Inelastic.
c. Unitary elastic
d. Perfectly elastic
145. Cross elasticity of demand is:

a. Negative for complementary goods
b. Negative for substitute goods.
c. Unitary for inferior goods
d. Positive for inferior goods.
146. A 3 percent increase in the price of tea causes a 6 percent increase in the demand for
coffee. The cross elasticity of demand for coffee with respect to the price of tea is:
a. -0.5
b. +0.5
c. -2.0
d. +2.0
147. The price elasticity of demand for any particular perfectly competitive firm's output is
a. Less than 1
b. Equal to zero
c. Infinite
d. 1
148. The economic profit of a perfectly competitive firm

a. Is less than its total revenue
b. Is greater than its total revenue
c. Equals its total revenue
d. Is less than its total revenue if its supply curve is inelastic and is greater than its total
revenue if its supply curve is elastic.
149. When Sidney's Sweaters, Inc. makes exactly zero economic profit, Sidney, the owner
a. Makes an income equal to his best alternative forgone income.
b. Will boost output
c. Will shut down in the short run.
d. Is taking a loss
150. A perfectly competitive firm's marginal cost exceeds its marginal revenue at its current
output. To Increase its profit, the firm will
a. Increase its output
b. raise its price
c. lower its price
d. decrease its output.
151. Demand for a commodity refers to
a. Desire for the commodity
b. Need for the commodity
c. Quantity demanded of that commodity
d. Quantity of the commodity demanded at a certain price during any particular of time
152. Demand for a commodity depends on

a. Price of that commodity
b. Price of related goods
c. Income
d. All the above
153. Law of demand establishes

a. Inverse relationship between price and quantity
b. Positive relationship between price and quantity
c. Both
d. none
154. All but one of the following are assumed to remain the same while drawing an individual’s
demand curve for a commodity. Which one is it ?
a. The preference of the individual
b. His monetary income
c. The price of the good under consideration
d. The prices of other good
155. Demand for a product should have the following pre-requisite

a. Ability to buy
b. Willingness
c. Need
d. All of these
156. Cross elasticity of demand between two perfect substitutes will be

a. Law
b. High
c. Zero
d. Infinity
157. Market demand is aggregation of individual demand

a. Vertically
b. Horizontally
c. Both (a) and (b)
d. None
158. HRD deals with functions such as ______

a. Career development
b. Mentoring
c. Coaching
d. All the above
159. A single point on the demand curve shows

a. Demand and supply relationship
b. Price and supply relationship
c. Price and demand relationship
d. None of these
160. The fall in the price of one commodity leads to fall in demand for other commodity
and vice versa for.
a. Substitutes
b. Complementary
c. Both (a) and (b)
d. None of the above
161. Decrease or fall in the price of commodity leads to increase in demand because of
a. Substitution Effect, i.e., Relatively cheaper than related goods
b. Income Effect, i.e., Consumer become better off
c. Both (a) and (b)
d. None of these
162. Generally the demand curve has.

a. A slope downward from left to right
b. A negative slope right
c. Both of these
d. None of these
163. The law of demand can be derived with the help of

a. Law of D.M.U. (Diminishing Marginal Utility)
b. Law of EMU (Equi-Marginal Utility)
c. Any of these two
d. None of these
164. The value of elasticity of demand ranges from.
a. Zero to one
b. One to infinity
c. Zero to infinity
d. None of these
165. When the quantity demanded of goods increases by a larger percentage as compared with
the income of the consumer, income elasticity of demand is high
a. Unitary Income Elasticity
b. Low-Income Elasticity
c. Zero-Income Elasticity
d. High-Income Elasticity
166. The relation between price and supply in law of supply is

a. Direct
b. Inverse
c. Proportional
d. None of these
167. Under perfect competition, price of the product

a. Can be controlled
b. Cannot be controlled
c. Can be controlled within certain limit
168. Perfect competition is a market situation where we have
a. A single seller
b. Two sellers
c. Large number of sellers
d. Few sellers
169. The firm can achieve equilibrium when its

a. MC = MR
b. MC = AC
c. MR = AR
d. MR = AC
170. A firm and industry are one and the same under
a. Perfect competition
b. Duopoly
c. Oligopoly
d. Monopoly
171 Homogeneity of product is characteristic of

a. Monopoly
b. Oligopoly
c. Perfect competition
172. In case of perfect competition, elasticity will be

a. O
b. 2
c. 3
d. Infinity
173. Under which of the following forms of market structure a firm does has no control over
the price of its product?
a. Monopoly
b. Monopolistic competition
c. Oligopoly
d. Perfect competition
174. Who is the price-leader under oligopoly ?

a. any unit with efficient production capabilities
b. there is no firm that can be termed as price leader under oligopoly
c. the largest firm
d. the smallest firm
175. In this one firm assumes the role of price leader and fixes the price of the product for the
entire industry
a. Price leadership
b. Cartel
c. Kinked demand curve
d. None of these
176. It is the art of translating into quantitative terms (rupees and paise) the value of the
product or a unit of a service to customers at point in time
a. Costing
b. Pricing
c. Profit analysis
d. All of the Above
177. For a monopoly, the industry demand curve is the firm's

a. Profit function
b. marginal revenue curve
c. supply curve
d. demand curve
178. If the price elasticity of demand is greater than 1, a monopoly's

a. Marginal revenue is zero
b. Total revenue decreases when the firm lowers its price
c. Marginal revenue is negative
d. Total revenue increases when the firm lowers its price
179. Consumer surplus is

a. Equal to the price minus the marginal cost
b. Less in the case of a single-price monopoly than in the case of a perfectly competitive
industry
c. Zero for a single-price monopolist
d. Positive in the case of a monopolist practicing perfect price discrimination
180. An increase in income will:

a. Lead to a movement along the demand curve
b. Shift the supply curve
c. Shift the demand curve
d. Lead to an extension of demand
181 A shift in supply will have a bigger effect on price than output if demand is
a. Income elastic
b. Income inelastic
c. Price elastic
d. Price inelastic
182. Assuming a downward sloping demand curve and upward sloping supply curve, a higher
equilibrium price may be caused by:
a. A fall in demand
b. An increase in supply
c. Improvements in production technology
d. An increase in demand
183. A movement along the supply curve may be caused by:

a. A change in technology
b. A change in the number of producers
c. A shift in demand
d. A change in costs
184. A subsidy paid to producers

a. Shifts the supply curve
b. Shifts the demand curve
c. Leads to a contraction in supply
d. Leads to an extension of supply
185. Which would definitely not be an example of price discrimination?

a. A theater charges children less than adults for a movie.
b. Universities charge higher tuition for out-of-state residents.
c. A doctor charges for services according to the income of patients.
d. An electric power company charges less for electricity used during off-peak hours
when production costs are lower.n
186. If shortly after Kellogg’s Company has announced price increases on its ready-to-eat
cereals, the other cereal manufacturers announce identical price increases on their
products, this is likely to be:
a. The essence of competition
b. A cartel
c. Price leadership
d. a coincidence.
187. Price discrimination is

a. Charging different prices to different customers because it costs the firm more to serve
some customers than others.
b. Changing the firm’s price frequently to respond to market conditions
c. Charging different prices to different customers when the price differences are not based
on cost differences.
d. Charging the same price to all customers
188. Monopolies and oligopolies are:

a. Price takers, as are competitive firms
b. Price takers, in contrast to competitive firms which are price makers
c. Price makers, in contrast to competitive firms which are price takers.
d. Price makers, as are competitive firms.
189. Concentration ratios may:

a. Overstate the extent of competition because they ignore imported products
b. Understate the extent of competition because they ignore imported products
c. Either overstate or understate the extent of competition because they ignore imported
products.
d. None of the above.
190. If new firms enter a monopolistically competitive market, the demand curves for the
existing firms will:
a. Shift to the left and become more price inelastic.
b. Shift to the left and there will be no change in price elasticity.
c. Shift to the left and become more price elastic.
d. Shift to the right and there will be no change in price elasticity
191. In the long run, monopolistically competitive firms maximize profit at the output where:
a. They earn zero economic profit.
b. P = MC.
c. Marginal cost = the minimum of the long-run average total cost curve.
192. Suppose that an economy wants to eliminate the resource waste associated with excess
capacity in monopolistically competitive markets. Which of the following actions would
achieve this goal?
a. Allow monopolistically competitive firms to create more significant barriers to entry.
b. Encourage more competition in monopolistically competitive markets.
c. Require all the firms in a given monopolistically competitive market to produce identical
products.
d. Require all the firms in a given monopolistically competitive market to charge the same
price.
193. Which best describes a demand curve?

a. The quantity consumers would like to buy in an ideal world
b. The quantity consumers are willing to sell
c. The quantity consumers are willing and able to buy at each and every income all other
things unchanged
d. The quantity consumers are willing and able to buy at each and every price all other
things unchanged
194. A fall in price:

a. Will cause an inward shift of demand
b. Will cause an outward shift of supply
c. Leads to a movement along a demand curve
d. Leads to a higher level of production
195. Demand for a normal product may shift outwards if:
a. Price decreases
b. The price of a substitute rises
c. The price of a complement rises
d. Income falls
196. According to the law of diminishing marginal utility:

a. Utility is at a maximum with the first unit
b. Increasing units of consumption increase the marginal utility
c. Marginal product will fall as more units are consumed
d. Total utility will rise at a falling rate as more units are consumed
197. If marginal utility is zero:

a. Total utility is zero
b. An additional unit of consumption will decrease total utility
c. An additional unit of consumption will increase total utility
d. Total utility is maximized
198. A decrease in income should:

a. Shift demand for an inferior product inwards
b. Shift demand for an inferior product outwards
c. Shift supply for an inferior product outwards
d. Shift supply for an inferior product inwards.
199. An increase in the price of a complement for product A would:

a. Shift demand for product A outwards
b. Shift demand for product A inwards
c. Shift supply for product A outwards
d. Shift supply for product A inwards
200. An increase in price, all other things unchanged, leads to:

a. Shift demand outwards
b. Shift demand inwards
c. A contraction of demand
d. An extension of demand
201. If a product is a Veblen good:

a. Demand is inversely related to income
b. Demand is inversely related to price
c. Demand is directly related to price
d. Demand is inversely related to the price of substitutes
202. If a product is an inferior good:

d. Demand is directly related to the price of substitutes
203. Average income increases from £20,000 p.a. to £22,000 p.a. Quantity demanded per year
increases from 5000 to 6000 units. Which of the following is correct?
a. Demand is price inelastic
b. The good is inferior
c. Income elasticity is -2
d. The product is normal
204. The price decreases from £2,000 to £1,800. Quantity demanded per year increases from
5000 to 6000 units. Which of the following is correct?
a. The price elasticity of demand is -2
c. Income elasticity is + 0.5
d. Income elasticity is + 2
205. If the price elasticity of demand is unit then a fall in price:

a. Reduces revenue
b. Leaves revenue unchanged
c. Increases revenue
d. Reduces costs
206. If the cross elasticity of demand is -2:

a. The products are substitutes and demand is cross price elastic
b. The products are substitutes and demand is cross price inelastic
c. The products are complements and demand is cross price elastic
d. The products are complements and demand is cross price inelastic
207. The income elasticity is +2 and income increases by 20%. Sales were 5000 units, what will
they be now?
a. 3000
b. 7000
c. 5500
d. 4500
208. The price elasticity of demand is a negative number this means:
a) Demand is price elastic
b) Demand is price inelastic
c) The demand curve is downward sloping
d) An increase in income will reduce the quantity demanded
209. If demand is price inelastic:

a) An increase in price must raise profits
b) An increase in price decreases revenue
c) An increase in price increases revenue
d) A decrease in price reduces sales
210. For an inferior good:

a. The price elasticity of demand is negative; the income elasticity of demand is negative.
b. The price elasticity of demand is positive; the income elasticity of demand is negative.
c. The price elasticity of demand is negative; the income elasticity of demand is positive.
d. The price elasticity of demand is positive; the income elasticity of demand is positive.
211. For a normal good:

d. The price elasticity of demand is positive; the income elasticity of demand is positive
212. Which of the following characterizes monopolistic competition?

a. Many interdependent firms sell a homogeneous product.
b. A few firms produce a particular type of product..
c. Many firms produce a particular type of product, but each maintains some independent
control over its own price.
d. A few firms produce all of the market supply of a good.
213. Monopolistically competitive industries are characterized by:

a. Low concentration ratios.
b. Independent production decisions.
c. Low entry barriers.
214. In monopolistic competition, a firm:

a. Has no market power.
b. Captures significant economies of scale
c. Has a downward-sloping demand curve.
d. Has a standardized product that all firms produce.
215. If there are many firms in an industry producing goods that are similar but slightly different,
this is an example of:
a. Perfect competition.
b. Monopolistic competition.
c. Oligopoly.
d. Monopoly
216. Large cities typically have many drug stores which have different qualities of service and
selections of product. The drug store market in big cities can best be classified as:
a. competitive market.
c. Oligopoly.
d. Monopoly
217. A major difference between monopoly and monopolistic competition is:

a. One maximizes profits by setting MR equal to MC, and the other does not.
b. The number of firms in the market.
c. One type of firm has market power, and the other does not.
d. One has a downward-sloping demand curve, and the other does not.
218. Entry into a market characterized by monopolistic competition is generally:

a. Entirely blocked by existing firms.
b. Very easy because few barriers exist.
c. As difficult as in oligopoly.
d. More difficult than entry into monopolized markets.

a. Price leadership
b. Product differentiation
c. Price discrimination.
d. Economies of scale.
220. Product differentiation refers to:

a. Features that make one product appear different from competing products in the same
market.
b. Different prices for the same product in a certain market.
c. The selling of identical products in different markets.
d. The charging of different prices for the same product in different markets.
221. Which of the following is an example of product differentiation?
a. Two bars of soap differ only in their label, but consumers pay 50 paisa more for the label
they recognize.
b. Sugar can be made from sugar beets or sugar cane which consumers cannot
differentiate when looking at sugar.
c. Consumers substitute vans in place of cars because vans accommodate more
passengers.
d. Some sawmills specialize in producing softwood and others specialize in producing
hardwood, but the two types of wood are used for very different purposes.
222. Perfect competition and monopolistic competition are best distinguished by:
a. The degree of product differentiation.
b. The long-run economic profits that are expected.
c. The number of firms in the market.
d. The ease of entry and exit
223. A monopolistically competitive firm can raise its price somewhat without fear of
great change in unit sales because:
a. The demand for its product is typically very price-elastic.
b. Its demand curve is horizontal.
c. Of product differentiation and brand loyalty.
d. Of the gap in its marginal revenue curve.
great change in unit sales because of:.
a. Brand loyalty
b. Inelastic demand.
c. Economies of scale.
d. Large market shares of firms in the market
225. When a monopolistically competitive firm advertises, it is attempting to increase:

a. The demand and decrease the price elasticity of demand for its product.
b. The demand and increase the price elasticity of demand for its product.
c. Long-run profits.
d. Market demand.
226. Brand loyalty usually makes the demand curve for a product:
a. More price elastic.
b. Less price elastic.
c. Unitary elastic.
d. More income elastic.
227. Both monopoly and monopolistic competition:
a. Maximize profit where MR = MC.
b. Use advertising to differentiate their product.
c. Have high concentration ratios.
d. Have high barriers to entry.
228. A monopolistically competitive firm maximizes profits or minimizes losses in the short
run by:
a. Using marginal cost pricing.
b. Producing output at the level where ATC is minimized.
c. Producing output at the level where price equals ATC.
d. Producing output at the level where MC = MR..
229. In monopolistic competition, a firm's demand is tangent to the long-run average cost curve
in the long run because:
a. Barriers to entry are very high.
b. Entry eliminates economic profit, and exit eliminates losses.
c. Advertising is ineffective in differentiating a product.
230. The demand for wheat from farm A is perfectly elastic because wheat from farm A is a(n)
a. Perfect complement to wheat from farm B.
b. Perfect substitute for wheat from farm B.
c. Normal good.
d. Inferior good.
a. Less than 1.
b. Equal to zero.
c. Infinite.
d. 1.
232. The market for fish is perfectly competitive. So, the price elasticity of demand for fish
from a single fishery
a. Sometimes greater than and sometimes less than the elasticity of demand for fish overall.
b. Greater than the elasticity of demand for fish overall.
c. Less than the elasticity of demand for fish overall.
d. Equals the elasticity of demand for fish overall.
233. In perfect competition, the price of the product is determined where the industry
a. Elasticity of supply equals the industry elasticity of demand.
b. Supply curve and industry demand curve intersect.
c. Fixed cost is zero.
d. Average variable cost equals the industry average total cost.
234. Total economic profit is

a. Total revenue minus total opportunity cost.
b. Marginal revenue minus marginal cost.
c. Total revenue divided by total cost.
d. Marginal revenue divided by marginal cost.

a. Less than its total revenue.
b. Greater than its total revenue.
c. Its total revenue.
d. Less than its total revenue if its supply curve is inelastic and is greater than its total
236. Law of Demand explains relation between quantity demanded and ….

a. Quantity supplied
b. Price
c. Need
d. Want
237. Income Elasticity established relation between Income and ……

a. Price
b. b) Supply
c. c) Quantity Demanded
d. Income
238. Market Equilibrium relates to …….

a. Demand & Supply
b. Production and Raw Material
c. Demand and Price
d. Supply and Production
Answers
1. (e) 2. (e) 3. (d) 4. (a) 5. (b) 6. (a) 7. (d) 8. (b) 9. (e) 10. (d)
11. (d) 12. (d) 13. (a) 14. (e) 15. (a) 16. (d) 17. (e) 18. (b) 19. (a) 20. (e)
21. (e) 22. (b) 23. (e) 24. (d) 25. (a) 26. (a) 27. (b) 28. (e) 29. (e) 30. (a)
31. (d) 32, (a) 33. (d) 34. (b) 35. (e) 36. (e) 37. (b) 38. (d) 39. (a) 40. (d)
41. (d) 42. (b) 43. (e) 44. (b) 45. (e) 46. (d) 47. (e) 48. (a) 49. (d) 50. (b)
51. (a) 52. (a) 53. (b) 54. (b) 55. (d) 56. (a) 57. (b) 58. (a) 59. (d) 60. (b)
61. (b) 62. (a) 63. (b) 64. (b) 65. (e) 66. (e) 67. (d) 68. (e) 69. (b) 70. (e)
71. (b) 72. (b) 73. (e) 74. (d) 75. (d) 76. (e) 77. (b) 78. (a) 79. (d) 80. (e)
81. (b) 82. (a) 83. (d) 84. (b) 85. (a) 86. (d) 87. (e) 88. (b) 89. (a) 90. (d)
91. (e) 92. (b) 93. (a) 94. (a) 95. (b) 96. (e) 97. (d) 98. (b) 99. (d) 100. (d)
101.(d) 102.(d) 103.(a) 104.(d) 105.(b) 106.(a) 107.(a) 108.(b) 109.(d) 110.(d)
111.(c) 112.(a) 113.(b) 114.(a) 115.(c) 116.(d) 117.(b) 118.(a) 119.(c) 120.(b)
121.(c) 122.(d) 123.(a) 124.(b) 125.(a) 126.(b) 127.(d) 128.(d) 129.(d) 130.(c)
131.(c) 132.(c) 133.(b) 134.(d) 135.(d) 136.(c) 137.(c) 138.(b) 139.(a) 140.(d)
141.(c) 142.(a) 143.(a) 144.(b) 145.(d) 146.(a) 147.(d) 148.(b) 149.(c) 150.(a)
151.(d) 152.(c) 153.(b) 154.(a) 155.(d) 156.(c) 157.(d) 158.(d) 159.(d) 160.(b)
161.(a) 162.(a) 163.(b) 164.(a) 165.(a) 166.(d) 167.(a) 168.(d) 169.(d) 170.(a)
171.(a) 172.(a) 173.(a) 174.(c) 175.(b) 176.(c) 177.(c) 178.(c) 179.(b) 180.(d)
181.(c) 182.(d) 183.(d) 184.(d) 185.(b) 186.(c) 187.(c) 188.(c) 189.(b) 190.(d)
191.(c) 192.(d) 193.(d) 194.(d) 195.(d) 196.(b) 197.(a) 198.(b) 199.(c) 200.(b)
201.(a) 202.(a) 203.(d) 204.(a) 205.(c) 206.(a) 207.(b) 208.(c) 209.(d) 210.(b)
211.(b) 212.(d) 213.(d) 214.(c) 215.(d) 216.(d) 217.(c) 218.(b) 219.(b) 220.(d)
221.(b) 222.(b) 223.(d) 224.(c) 225.(a) 226.(b) 227.(b) 228.(a) 229.(c) 230.(b)
231.(a) 232.(d) 233.(d) 234(d) 235.(b) 236.(b) 237.(b) 238.(a)
A. A decrease in the price of pesticides.
B. An increase in the demand for wheat.
C. A rise in the price of wheat.
D. An increase in the price of corn.
2. Law of supply establishes
A. Inverse relationship between price and supply
B. Positive relationship between price and supply
C. Both
D. none
3. The market supply curve shows

A. The effect on market demand of a change in the supply of a good or service.
B. The quantity of a good that firms would offer for sale at different prices.
C. The quantity of a good that consumers would be willing to buy at different prices.
D. All of the above are correct.
4.Unionized workers may be able to negotiate with management for higher wages during
periods of economic prosperity. Suppose that workers at automobile assembly plants
successfully negotiate a significant increase in their wage package. How would the new wage
contract be likely to affect the market supply of new cars?
A. Supply will shift to the right.
B. Supply will shift to the left.
C. Supply will not shift, but the quantity of cars produced per month will decrease.
D. d. Supply will not shift, but the quantity of cars produced per month will increase.
5. If automobile manufacturers are producing cars faster than people want to buy them,
A. There is an excess supply and price can be expected to decrease.
B. There is an excess supply and price can be expected to increase.
C. There is an excess demand and price can be expected to decrease.
D. There is an excess demand and price can be expected to increase.
6. If a computer software company introduces a new program and finds that orders from
wholesalers far exceed the number of units that are being produced,
A. There is an excess supply and price can be expected to decrease.
B. There is an excess supply and price can be expected to increase.
C. There is an excess demand and price can be expected to decrease.
D. There is an excess demand and price can be expected to increase.
7. Market equilibrium refers to a situation in which market price
A. is high enough to allow firms to earn a fair profit.
B. is low enough for consumers to buy all that they want.
C. is at a level where there is neither a shortage nor a surplus.
D. d. is just above the intersection of the market supply and demand curves.
8.If the price of a good increases while the quantity of the good exchanged on markets
increases, then the most likely explanation is that there has been
A. an increase in demand.
B. a decrease in demand.
C. an increase in supply.
D. d. a decrease in supply.
9. If the price of a good decreases while the quantity of the good exchanged on markets
increases, then the most likely explanation is that there has been
D. a decrease in supply.
10. If the price of a good increases while the quantity of the good exchanged on markets
decreases, then the most likely explanation is that there has been
11. If the price of a good decreases while the quantity of the good exchanged on markets
decreases, then the most likely explanation is that there has been
12.An increase in the demand for a good will cause

A. an increase in equilibrium price and quantity.
B. a decrease in equilibrium price and quantity.
C. an increase in equilibrium price and a decrease in equilibrium quantity.
D. a decrease in equilibrium price and an increase in equilibrium quantity.
13. An increase in the supply of a good will cause

A. an increase in equilibrium price and quantity.
B. a decrease in equilibrium price and quantity.
C. an increase in equilibrium price and a decrease in equilibrium quantity.
D. d. a decrease in equilibrium price and an increase in equilibrium quantity.
14. During 2002 – 2005 we saw significant increases in the construction of new housing
stock in the US. During the same time period we also observed significant rises in the
demand for homes. We know that during that time period both price and the level of homes
traded increased. Based on that information what most likely happened in the market?
A. The rise in supply outpaced the rise in demand.
B. The rise in demand outpaced the rise in supply.
C. The rise in demand was perfectly matched by rise in the supply.
D. d. None of the above
15.If a rise in supply exceeds a rise in demand, then we should expect

A. the equilibrium price and quantity levels will rise.
B. the equilibrium price will rise while the equilibrium quantity will decline.
C. The equilibrium price will fall while the equilibrium quantity will rise.
D. d. the equilibrium price and quantity levels will decline
16. In which instance will both the equilibrium price and quantity rise?
A. When demand and supply increase, but the rise in demand exceeds the rise in supply.
B. When demand and supply increase, but the rise in supply exceeds the rise in demand.
C. When demand and supply decline, but decline in the demand exceeds the decline in
supply.
D. When demand and supply decline, but the decline in supply exceeds decline in the
demand.
17. In which instance can we observe a rise in the equilibrium price accompanied by a
decline in the equilibrium quantity?
A. If both demand and supply decline, but the decline in demand exceeds the decline in
supply.
B. If supply declines while demand increases, and the decline in supply exceeds the increase
in demand.
C. If both demand and supply increase.
D. None of the above.
18. To be an importer of a product the country must have its domestic price of the product be
_____ the foreign price
A. higher than
B. lower than
C. equal to
D. None of the above
19. To be an exporter of a product the country must have its domestic price of the product be
_____ the foreign price
A. higher than
B. lower than
C. equal to
20. Which of the following will help a country become an exporter of a product (assume that
the product is a normal good given the median consumer income)?
A. An increase in incomes of domestic consumers
B. A recession abroad
C. An increased productivity of domestic labor
D. An increased cost of domestic labor
21. In 2010 Russia was affected by a significant draught. Russia is a major producer and
exporter of several agricultural commodities. As a result of the draught, Russia reduced some
of its agricultural exports. In the context of the world supply/demand model for the affected
agricultural commodities we should observe:
A. Reduced demand and reduced supply
B. Reduced supply and unchanged demand
C. Reduced supply and increased demand
D. Increased supply and unchanged demand
E. Increased supply and reduced demand
22.In November of 2010 the US Central Bank, the Federal Reserve, embarked on a policy of
quantitative easing. Since this policy essentially represents an increase in the supply of
money, it may create inflationary expectations. Let’s assume (and this is a strong
assumption), that as a result of this policy, US households start to expect inflation (price
increases) in the housing market. The effect on the housing market will be:
A. A rise in the demand, causing prices to increase
B. A rise in the supply, causing prices to decrease
C. A decline in the demand, causing prices to decrease
23. Which of the following would NOT be a determinant of demand?

a. the price of related goods
b. income
c. tastes
d. the prices of the inputs used to produce the good
24. If the price of a substitute to good X increases, then

a. the demand for good X will increase.
b. the market price of good X will decrease.
c. the demand for good X will decrease.
d. the demand for good X will not change.
25.Suppose you like banana cream pie made with vanilla pudding. Assuming all other things
are constant, you
notice that the price of bananas is higher. How would your demand for vanilla pudding be
affected by this?
a. It would decrease.
b. It would increase.
c. It would be unaffected.
d. There is insufficient information given to answer the question.
26. A higher price for batteries would tend to

A. increase the demand for flashlights.
B. decrease the demand for electricity.
C. increase the demand for electricity.
D. d. increase the demand for batteries
27. What will happen in the rice market if buyers are expecting higher prices in the near
future?
A. The demand for rice will increase.
B. The demand for rice will decrease.
C. The demand for rice will be unaffected.
D. d. The supply of rice will increase.
28. Holding all else constant, a higher price for ski lift tickets would be expected to
A. increase the number of skiers.
B. decrease demand for skis.
C. decrease the demand for other winter recreational activities.
D. decrease the supply of ski resorts.
29. Ceteris paribus is a Latin phrase that literally means

A. "other things being equal."
B. "after this therefore because of this."
C. "to respond slowly to a change in price."
D. "There's no such thing as a free lunch."
30. When the price of a good or service changes,

A. there is a movement along a stable demand curve.
B. demand shifts in the opposite direction.
C. demand shifts in the same direction.
D. d. supply shifts in the opposite direction.
31.
Other things equal, when the price of a good rises, the quantity supplied of the good also
rises. This is
A. the law of increasing costs.
B. the law of diminishing returns.
C. the law of supply.
D. d. the law of demand.
32.. Suppose that there is an increase in input prices. We would expect

A. supply to increase.
B. supply to decrease.
C. supply could increase or decrease.
D. d. supply to remain unchanged.
33.If, at the current price, there is a shortage of a good,

A. the price is below the equilibrium price.
B. the market can be in equilibrium.
C. sellers are producing more than buyers wish to buy.
D. d. All of the above answers are correct.
34. When the price is higher than the equilibrium price,

A. a shortage will exist.
B. buyers desire to purchase more than is produced.
C. sellers desire to produce and sell more than buyers wish to purchase.
D. quantity demanded equals quantity supplied.
35. When there is a shortage in a market,

A. there is downward pressure on price.
B. there is upward pressure on price.
C. the market could still be in equilibrium.
D. d. the price must be above equilibrium.
36.Suppose that a decrease in the price of X results in less of good Y sold. This would mean
that X and Y are
A. complementary goods.
B. substitute goods.
C. unrelated goods.
D. d. normal goods.
37. Which of the following is a determinant of demand?

A. the price of a substitute good
B. the price of a complement good
C. the price of the good next month
D. all of the above
38.When we move up or down a given demand curve,

A. only price is held constant.
B. all nonprice determinants of demand are assumed to be constant.
C. income and the price of the good are held constant.
D. d. all determinants of quantity demanded are held constant.
39.Which of the following would NOT shift the demand curve for a good or service?
A. a change in income
B. a change in the price of a related good
C. a change in expectations about the price of the good or service
D. a change in the price of the good or service
40. The downward-sloping demand curve reflects which of the following?

A. The price is positively related to quantity supplied.
B. There is an inverse relationship between price and quantity demanded.
C. There is a direct relationship between price and quantity demanded.
D. d. When the price falls, buyers willingly buy less.
41. Holding the nonprice determinants of supply constant, a change in price would
A. result in a change in supply.
B. result in a movement along a stable supply curve.
C. result in a shift of demand.
D. have no effect on the quantity supplied.
42. Wheat is the main input in the production of flour. If the price of wheat increases, all else
equal, we would expect
A. the supply of flour to be unaffected.
B. the supply of flour to decrease.
C. the supply of flour to increase.
D. d. the demand for flour to decrease.
43.Suppose that the number of buyers in a market increases and a technological advancement
occurs also. What would we expect to happen in the market?
A. The equilibrium price would increase, but the impact on the amount sold in the market
would be indeterminate.
B. The equilibrium price would decrease, but the impact on the amount sold in the market
would be indeterminate.
C. Both equilibrium price and equilibrium quantity would increase.
D. Equilibrium quantity would increase, but the impact on equilibrium price would be
indeterminate.
44.The firm can achieve equilibrium when its

A. MC = MR
B. MC = AC
C. MR = AR
D. MR = AC
46. The supply curve slopes
a) upwards
b) downwards
c) horizontally
d) vertically
47. Supply is predominantly determined by

a) Income
b) Stock
c) Demand
d) Consumption
48. In case of perfectly elastic supply, the supply curve is

a) slopes upwards
b) horizontal
c) vertical
d) slopes downwards
49. At a given the price, if the cost of production increases because of higher price of raw
materials, the supply
a) increases
b) decreases
c) expands
d) remains the same
50. When demand and supply rise and fall in the same proportion, the equilibrium price
a) increases
b) decreases
c) expands
d) remains the same
51. Contraction of supply is traced by the ________ movement on the supply curve.
a) horizontal
b) upward
c) downward
d) vertical
52. According to _________, supply of a commodity expands if the price of that commodity
increases
a) Law of Demand
b) Law of Supply
c) Law of Equilibrium
d) Law of Price
53. The act of making goods and services is called as

a) Creation
b) Production
c) Processing
d) Supply
54. The selection of methods with which commodities are produced is a subject matter of
a) theory of distribution
b) theory of production
c) theory of creation
d) theory of supply
55. The income which a businessman might expect from the second best alternative use of his
resources is called as
a) Opportunity Cost
b) Accounting cost
c) Real cost
d) Nominal cost
56. The cost which enters the accounts book of the firm are referred as
a) Opportunity Cost
b) Accounting cost
c) Real cost
d) Nominal cost
57. The sum of total fixed costs and total variable costs is called as
a) Total cost
b) Production cost
c) Marginal cost
d) Average cost
58. Variable cost are those costs which vary with the level of
a) working capital
b) Output
c) sales
d) profit
59. The costs of self-owned resources, which are employed by the firm are called as
________
a) Implicit cost
b) Explicit cost
c) Accounting cost
d) Nominal cost
60. The concept of opportunity cost is a tool to measure ________ cost

a) Explicit
b) Implicit
c) Variable
d) Marginal
61. Explicit cost + implicit cost + normal profit = ________ cost

a) Marginal
b) accounting
c) Economic
d) Variable
MCQs
103 – ECONOMIC ANALYSIS FOR BUSINESS DECISIONS
1. In a free-market economy the allocation of resources is determined by:

a. Votes taken by consumers
b. A central planning authority
c. By consumer preferences
d. The level of profits of firms
2. A rational person does not act unless:

a. The action is ethical
b. The action produces marginal costs that exceed marginal benefits
c. The action produces marginal benefits that exceed marginal costs
d. The action makes money for the person
a. Social
b. Political
c. Natural
d. Physical
4. defined economics as a study of mankind in the ordinary business of life.

a. Adam smith
b. Lionel Robbins
c. Samuelson
d. Alfred Marshall
5. The growth of an economy is indicated by an

a. Increase in savings
b. Increase in investment
c. Increase in general prices
d. Increase in national income
6. equals revenue minus all explicit costs.

a. Accounting profit
b. Economic profit
c. Normal profit
d. Loss

a. Marshall
b. J.M.Keynes
c. Adam Smith
d. Karl Marx
8. The ------------------- problem refers to the possibility that owners and their managers may
have different objectives.
a. Company- Manager problem
b. Principal-Agent Problem
c. Firm-Employee problem
d. Problem of different objectives
9. Economic profit refers to------------- minus all relevant costs , both explicit and implicit.
a. Profit
b. Cost
c. Expenses
d. Revenues
10. The interaction of individuals and firms in a market can be described as a -----------------
of money, goods and services and resources through product and factor markets.
a. Constant flow
b. Stable flow
c. Circular Flow
d. Regular Flow
11 ------------------ focuses on the behavior of the individual actors on the economic stage , that
is, firms and individuals and their interaction in markets.
a. Macroeconomics
b. Microeconomics
d. Economics
12. In free market economy, the organization and interaction of producers and consumers is
accomplished through the -------------- system.
a. Price
b. Cost
c. Profit
d. Revenue

activity.
14. The regulatory mechanism of the market system is:

a. Self-interest.
b. Private property.
c. Competition.
d. Specialization.
15. Which of the following is not an economic cost?

a. Wages.
b. Rents.
c. Economic profits.
d. Payments made to the entrepreneur for organizing production
16. From society's point of view the economic function of profits and losses is to:
a. Promote the equal distribution of real assets and wealth.
b. Achieve full employment and price level stability.
c. Contribute to a more equal distribution of income.
d. Reallocate resources from less desired to more desired uses.
17. The invisible hand refers to the:

a. Fact that the U.S. tax system redistributes income from rich to poor.
b. Notion that, under competition, decisions motivated by self-interest promote the social
interest.
c. Tendency of monopolistic sellers to raise prices above competitive levels.
d. Fact that government controls the functioning of the market system.
18. The invisible-hand concept suggests that:

a. Market failures imply the need for a national economic plan.
b. Big businesses are inherently more efficient than small businesses.
c. The competitiveness of a capitalistic market economy invariably diminishes over time.
d. Assuming competition, private and public interests will coincide
19. Two major virtues of the market system are that it:
a. Allocates resources efficiently and allows economic freedom.
b. Results in an equitable personal distribution of income and always maintains full
employment.
c. Results in price level stability and a fair personal distribution of income.
d. Eliminates discrimination and minimizes environmental pollution.
20. The simple circular flow model shows that:

a. Households are on the buying side of both product and resource markets.
b. Businesses are on the selling side of both product and resource markets.
c. Households are on the selling side of the resource market and on the buying side of the
product market.
d. Businesses are on the buying side of the product market and on the selling side of the
resource market.
21. The two basic markets shown by the simple circular flow model are:
a. Capital goods and consumer goods.
b. Free and controlled.
c. Product and resource.
d. Household and business.
22. Which of the following is a limitation of the simple circular flow model?
a. Product markets are ignored.
b. Resource markets are ignored.
c. The determination of product and resource prices is not explained.
d. Households are included, but not businesses.
23. In economics the central problem is:

a. Money.
b. Scarcity.
c. Allocation.
d. Production.

a. The behavior of firms.
b. Economic aggregates.
c. The behavior of the electronics industry.
d. The activities of individual units.
25. Microeconomics is not concerned with the behavior of:

a. Consumers.
b. Aggregate demand.
c. Firms.
d. Industries
26. The total demand for goods and services in an economy is known as:
a. Aggregate demand.
b. Gross national product.
c. Economy-wide demand.
d. National demand
27. Unemployment means that:

a. People are not willing to work at the going wage rate.
b. At the going wage rate, there are people who want to work but cannot find work.
c. There are some people who will not work at the going wage rate.
d. There is excess demand in the labour market.

d. The additional benefit of buying an additional unit of a product
29. The circular flow of goods and incomes shows the relationship between:
a. Firms and households.
b. Goods and services.
c. Income and money.
d. Wages and salaries.
30. In a planned or command economy, all the economic decisions are taken by the:
a. Workers.
b. Consumers.
c. Voters.
d. Government.

a. The richest 10 per cent of the population has had a bigger percentage increase in incomes
over the past 10 years than the poorest 10 per cent.
b. The proportion of people's income paid in taxes is higher under this government than
under the previous one.
d. Inequality in the distribution of income is a more serious problem than unemployment
a. Law of Demand.
b. Law of Supply.
c. Law of Diminishing Marginal Utility.
33. Goods and Services bought and sold in:

a. Product Market.
b. Factor Market.
c. Capital Market
d. Money Market
34. In Product market money flows from:

a. Individual to firm.
b. Business to households.
c. Government to household.
35. In factor market suppliers are:

a. Firms.
b. Households.
c. Government
36. In economic activities which are the outflows:

a. Government spending.
b. Investment.
c. Savings.
37. Indian economy is:

a. Capitalist Economy
b. Socialist Economy
c. Mixed Economy
38. Father of Economics:

a. Lionel Robbins.
b. Adam Smith.
c. Alfred Marshal
39. Implicit Cost added in:

a. Accounting cost.
b. Economic cost.
c. Both
40. Business Economics is also known as………….

b. Economics for Executives
c. Economic analysis for business decisions
d. All the above
41. State whether economics is

a. A positive science only
b. Neither a positive nor normative science
c. A science but not art
d. A science or an art depending on who uses economics and for what purpose
42. The branch of economics wherein mathematics and statistics are used to measure and
analyze economics activities is called……………..
a. Applied Economics
b. Econometrics
c. Statistics
d. Macro Economics.
43. The opportunity cost of a machine which can produce only one product is:
a. Low
b. Infinite
c. High
d. Medium
44. It is defined as a state of knowledge in which one or more alternatives result in a set of
specific outcomes but where the probabilities of the outcomes are neither known nor
meaningful.
a. Risk
b. Uncertainty
c. Peril
45. Opportunity cost is term which describes

a. A bargain for a factor of production
b. Costs related to an optimum level of production
c. Average variable cost
d. None of these
46. It is also known as prescriptive economics

a. Positive Economics
b. Micro economics
c. Normative economics
d. Economics.

a. Opportunity
b. Marginal
c. Total
d. Historical
48. There are ……branches of economics

a. 2
b. 3
c. 4
d. 6
49. It is the study of economics actions of individuals and small groups of individuals.
a. Micro-Economics
b. Macro-Economics
50. An input should be so allocated that the value added by the last unit is the same in all
cases.
a. Opportunity Cost Principle
b. Equi-Marginal Principle
Incremental Principle
c. Discounting Principle
51. The term Èconomics‟ in English language has its origin in------ word.
a. Greek
b. Italic
c. Latin
d. Indian

a. Production
b. Consumption
c. Exchange
d. All of the above
53. It refers to the determination of prices of all goods and services by the interaction of the
forces of demand and supply without any external interference.
a. Product-mechanism
b. Price-mechanism
c. Cost-mechanism
d. None of these
54. The principle reasons behind economic problems

a. Unlimited wants
b. Limited or Scarce of Means
c. Alternatives Uses of Means
d. All of the above
55. Income flow is also known as --- --.

a. Product Flow
b. Money flow
c. Profit flow
d. Cash flow
56. Flows of the factor of production and the goods and services between the different sectors
is - .
a. Real flow
b. Money flow
c. Cash flow
d. Product flow
57. It is also called output flow or real flow

a. Profit flow
b. Cash flow
c. Product flow
d. None of these
58. Accounting profit= ----------- Explicit Costs

a. Total Revenue
b. Total Cost
c. Implicit cost
d. None of these
59. According to Professor S.E.Landsbury, “Firm is an organization that produces and sells
goods with the goal of ----- its profits”.
a. Minimizing
b. Maximizing
c. Optimizing
d. All of the above

d. None of these
61. According to Simon if a firm fails to achieve its target initially results in:
a. A sense of helplessness
b. Search behavior
c. Sacking of its managerial team
d. Appropriate revision of the aspiration level

a. U = S (S,M,I)
b. U = S (S,M)
c. U = f (S,M,I)
d. U = F(S,M,I)
63. It is the difference between total revenue and total economic cost
a. Accounting Profit
b. Economic Profit
c. Gross Profit
d. Net Profit
64. Invisible hand theory is given by----------

a. Lord Robbins
b. Samuelson
c. Marshall
d. Adam Smith
65. Managers are Agent when:
a. Managers and workers.
b. Shareholders and managers.
c. Managers and contractors.
66. Accounting cost include:

a. Owner`s land for company establishment.
b. Depreciation
c. Management skill of a owner

68. Trade-offs are required because wants are unlimited and resources are:
a. Economical.
b. Unlimited
c. Efficient
d. Marginal
e. e. Scarce
69. Economics is the study of:

a. how society manages its unlimited resources.
b. how to reduce our wants until we are satisfied.
c. how society manages its scarce resources.
d. how to fully satisfy our unlimited wants. e. how to avoid having to make trade-offs
70. Which of the following statements regarding the circular-flow diagram is true?
a. If Vijay works for XYZ Solutions Ltd. and receives a salary payment, the transaction
takes place in the market for goods and services.
b. If XYZ Solutions Ltd. sells a military aircraft, the transaction takes place in the market
for factors of production.
d. The factors of production are owned by households.
e. The factors of production are owned by firms.

a. Labour
b. Land
c. Money
d. Capital e. All of these answers are factors of production.
72. Which of the following issues is related to microeconomics?

a. The impact of oil prices on car production
b. The impact of money on inflation
c. The impact of technology on economic growth
d. The impact of the deficit on saving
a. "Environment."
b. "One who participates in a market."
c. "One who manages a household."
d. "Conservation.“
74. Economics deals primarily with the concept of

a. Poverty.
b. Scarcity.
c. Change.
d. Power


d. The mathematical calculations firms make to determine production.
77. In the circular-flow diagram,

a. Firms are sellers in the resource market and the product market.
b. Households are sellers in the resource market.
c. Firms are buyers in the product market.
d. Spending on goods and services flow from firms to households.
78. In the circular-flow diagram
a. Spending on goods and services flow from firms to households.
b. Goods and services flow from households to firms.
c. Factors of production flow from firms to households.
d. Income from factors of production flows from firms to households.

80. Company goals that are concerned with creating employee and customer satisfaction and
maintaining a high degree of social responsibility are called objectives
a. Social
b. Noneconomic
c. Welfare
d. Public Relations
81. The value of an entrepreneur‟s resources that she uses in production are known as:
a. Explicit costs
b. Sunk costs.
c. Operating expenses.
d. Technological expenses.
e. Implicit costs.
82. One of the most important differences between a firm‟s economic profit and its
accounting profit is the subtraction of:
a. Costs incurred when hiring labor, capital, and land.
b. Any explicit cost incurred by the entrepreneur for risk taking.
c. Any implicit charges for the use of capital owned by the entrepreneur.
d. Any taxes on the retained earnings of the firm.
e. The costs of distributing the firm‟s output.
a. Karl Marx.
b. Frank Knight.
c. Joseph Schumpeter.
d. Adam Smith.
84. Which two of the following are characteristics of the „principal-agent‟ problem?
a) Ownership and control in hands of same people
b) Ownership and control in hands of different people
c) Shareholders and managers pursue different objectives
d) Shareholders and managers pursue same objectives
e) Sole traders are the dominant form of business organization
a. b) and e)
b. b. b) and d)
c. c. b) and c)
d. d. a) and e)
e. e. a) and c)
85. Economic profit is .

a. Calculated by subtracting implicit costs of using owner-supplied resources from the
firm's total revenue.
b. a theoretical measure of a firm's performance and has little value in real world decision-
making.
c. Generally larger than accounting profit.
d. Negative when costs exceed revenues.

a. The difference between total revenue and explicit costs.
b. The difference between total revenue and the opportunity cost of all the resources used in
production.
c. The difference between accounting profit and explicit costs.
d. The difference between accounting profit and the opportunity cost of the market-supplied
resources used by the firm.
87. The principal-agent problem arises when…

a. The principal and the agent have different objectives
b. The principal cannot decide whether the firm should seek to maximize the expected
future profits of the firm or maximize the price for which the firm can be sold.
c. The principal cannot enforce the contract with the agent or finds it too costly to monitor
the agent.
d. Both a and c
88. Moral hazard…

a. Occurs when managers pursue profit maximization without regard to the interests of
society in general.
b. Is the cause of principal-agent problems.
c. Occurs only rarely in modern corporations.
d. Exists when either party to a contract has an incentive to cancel the contract.
89. Economic profit is the best measure of a firm's performance because…

a. Economic profit fully accounts for all sources of revenue.
b. Implicit costs are generally too difficult to measure accurately.
c. The opportunity cost of using ALL resources is subtracted from total revenue.
d. Only explicit costs influence managerial decisions since, in general, only explicit costs
can be subtracted from revenue for the purposes of computing taxable profit.
90. Business Economics is also known as

b. Economics for Executive
c. Economic Analysis for Business Decision
d. All the above
91. It is the study of economic actions of individuals and small groups of individuals:
a. Micro – Economics
b. Macro Economics
92. The principal reasons behind economic problems

a. Unlimited Wants
b. Limited or Scarce Resources
c. Alternative uses of Means
d. All the above
93. Invisible hand theory is give by :

a. Lord Robbins
b. Samuelson
c. Marshal
d. Adam Smith
94. The ultimate effect of the "invisible hand" of Adam Smith is that, in a competitive
economy, everyone:
a. Benefits if each acts in his/her own interest.
b. Will increase their profits in a free market.
c. Should act to maximize economic growth.
d. Should act to promote the public interest.
95. The three fundamental questions of economic organization are:
a. When, for whom, and how.
b. How, what, and for whom.
c. Who, how, and when.
d. What, who, and why.
96. „„Economics is the science, which studies human behaviours as a relationship between
ends and scarce means which have alternative uses.‟‟ This definition of Economics is
given by,
a. Lord Robbins
b. Samuelson
c. Alfred Marshal
d. Adam Smith
97. Which of the following is true regarding the circular flow model?
a. Households provide the demand for the factor market and business provide the supply for
the goods and services market.
b. Households provide the demand for the goods and service market and business provides
the supply for the factor market.
c. Households provide the supply for the factor market and business provides the supply for
the goods and service market
d. Households provide both the supply and demand for the goods and services market
98. Income and revenues that are created within a country

a. always will remain within that country
b. Can leave that country only when goods are exported.
c. Can leave that country when goods are imported
d. Can leave that country when capital flows into that country's financial institutions.
99. In a circular flow model, the real variables are:

a. Money that flows from the factor market to the households.
b. Only the goods and services that are produced.
c. Only the resources that are used.
d. Both the goods and services produced and the resources that are used.
100. Money is
a. Backed by gold in Fort Knox
b. The same as income.
101. The development of money as a medium of exchange has facilitated the expansion of
trade because
a. Holding money increases people's income
b. No other mediums of exchange are available
c. Money eliminates the "double coincidence of wants" problem
d. Holding money increases people's wealth
102. As the interest rate falls, people hold money instead of bonds because the
opportunity cost of holding money has .
a. More; fallen
b. More; risen
c. Less; fallen
d. Less; risen
103. The concept of opportunity cost:

a. Suggests a major increase in public health-care spending means an expansion in other
areas will be harder to achieve.
b. Suggests all our wants can be achieved.
c. Would be irrelevant if we eliminated poverty.
d. Is relevant only for a capitalist economy like the United States.
104. Inflation is:

a. A decrease in the overall level of economic activity.
b. An increase in the overall level of economic activity.
c. An increase in the overall price level.
d. A decrease in the overall price level.
105. A recession is:

a. period of declining unemployment.
b. A period of declining prices
c. A period during which aggregate output declines
d. A period of very rapidly declining prices.
106. The statement "The unemployment rate for teens is higher than that for adults" is
a. A normative statement.
b. A political statement.
c. An ethical statement.
d. A positive statement
107. Which of the following is a positive statement?
a. Low rents will restrict the supply of housing.
b. Housing costs too much.
c. Low rents are good because they make apartments more affordable.
d. Owners of apartment buildings ought to be free to charge whatever rent they want.
108. A normative statement is

a. One that does not use the ceteris paribus clause.
b. About what ought to be.
c. Always true.
d. About what is
109. The task of economic science is to discover that are consistent with .
a. Positive statements; normative statements
b. Positive statements; what we observe
c. Normative statements; positive statements
d. Ways to make money; the law
110. Economic models

a. Are better if they include most of the detail of the real economy.
b. Rely on simplification.
c. Do not address questions about the economy.
d. Make no assumptions that have not been prove
111. An economic theory is

a. A generalization that summarizes what we understand about economic choices.
b. A positive statement that cannot use the ceteris paribus clause.
c. Usually more complex than the real world.
d. Always a mathematical, or nonverbal, model.
112. Ceteris paribus is the Latin expression for

a. A statement about the way the economic world ought to be.
b. An expression that means "other things being equal."
c. The (false) statement that what is true of the parts is true of the whole or what is true of
the whole is true of the parts.
d. The error of reasoning that a first event causes a second event because the first event

a. The accounting cost minus the marginal benefit.
b. The highest-valued alternative forgone.
c. The monetary costs of an activity.
d. The accounting cost minus the marginal cost
114. Economics is best defined as the study of how people, businesses, governments, and
societies
a. Make choices to cope with scarcity.
b. Attain wealth.
c. Choose abundance over scarcity.
d. Use their infinite resources.
115. Scarcity requires that people must

a. Trade.
b. Compete.
c. Cooperate.
d. Make choices

117. Entrepreneurs do all of the following EXCEPT

a. Bear risk from business decisions.
b. Own all the other resources.
c. Come up with new ideas about what, how, when and where to produce.
d. Organize labor, land, and capital.
118. Principal Agent Problem is related to…….

a. Managers and Owner s
b. Suppliers and Buyers
c. Producers and Sellers
d. LIC Agents
119. Invisible Hand theory was described by …….

a. Robert Anthony
b. Adam Smith
c. Amartya Sen
d. C.K. Pralhad
120. PV in Unit number one stands for ………
a. Postal Volume
b. Past Value
c. Programmable Value
d. Present Value
121. Which of the following factor is important for demand along other factors?
a. Selling Power
b. Ability to Buy
c. Product Development
d. New product Launch
122. The law of demand states that an increase in the price of a good:
a. Increases the supply of that good.
b. Decreases the quantity demanded for that good.
c. Increases the quantity supplied of that good.
123. The law of supply states that an increase in the price of a good:
a. None of these answers.
b. Increases the quantity supplied of that good.
c. Decreases the demand for that good.
d. Decreases the quantity demanded for that good.
124. If an increase in consumer incomes leads to a decrease in the demand for camping
equipment, then camping equipment is:
a. A normal good.
c. An inferior good.
d. A substitute good
e. A complementary good.
125. Which of the following shifts the demand for watches to the right?
a. An increase in the price of watches
b. None of these answers
c. A decrease in the price of watch batteries if watch batteries and watches are complements
d. A decrease in consumer incomes if watches are a normal good
126. If the price of a good is above the equilibrium price

a. There is a surplus and the price will rise.
b. There is a shortage and the price will fall.
c. There is a shortage and the price will rise.
d. The quantity demanded is equal to the quantity supplied and the price remains
unchanged.
127. If the price of a good is equal to the equilibrium price,

a. There is a shortage and the price will fall.
b. The quantity demanded is equal to the quantity supplied and the price remains
unchanged.
c. There is a surplus and the price will rise.
d. There is a shortage and the price will rise.
128. An inferior good is one for which an increase in income causes a(n)
a. Decrease in supply.
b. Increase in demand.
c. Increase in supply.
d. Decrease in demand
129. If a small percentage increase in the price of a good greatly reduces the quantity demanded
for that good, the demand for that good is
a. Income inelastic.
b. Price inelastic.
c. Price elastic.
d. Unit price elastic.
130. The price elasticity of demand is defined as

a. The percentage change in the quantity demanded divided by the percentage change in
income.
b. The percentage change in income divided by the percentage change in the quantity
demanded.
c. The percentage change in the quantity demanded of a good divided by the percentage
change in the price of that good.
131. In general, a flatter demand curve is more likely to be:

a. Price elastic.
b. Unit price elastic.
d. Price inelastic.
132. In general, a steeper supply curve is more likely to be
a. Price elastic.
d. Price inelastic.
133. Which of the following would cause a demand curve for a good to be price inelastic?
a. The good is a luxury.
b. There are a great number of substitutes for the good.
c. The good is a necessity.
d. The good is an inferior good.
134. If the cross-price elasticity between two goods is negative, the two goods are likely to be:
a. Substitutes.
b. Complements.
c. Necessities.
d. Luxuries
135. If there is excess capacity in a production facility, it is likely that the firm's supply curve
is:
a. Price inelastic
d. Price elastic.
136. If the income elasticity of demand for a good is negative, it must be:
a. An elastic good.
b. An inferior good
c. A normal good.
d. A luxury good.
137. If consumers think that there are very few substitutes for a good, then
a. Supply would tend to be price elastic.
c. Demand would tend to be price inelastic
d. Demand would tend to be price elastic.
138. The sensitivity of the change in quantity demanded to a change in price is called:
a. Income elasticity.
b. Cross-elasticity.
c. Price elasticity of demand.
d. Coefficient of elasticity.
149. A product that is similar to another, and can be consumed in place of it is called
a. A normal good.
b. An inferior good.
c. A complementary good.
d. A substitute good.
140. Two goods are if the quantity consumed of one increases when the price
of the other decreases.
a. Normal
b. Superior
c. Complementary
d. Substitute
141. If input prices increase, all else equal,

a. quantity supplied will decrease.
b. supply will increase.
c. supply will decrease.
d. demand will decrease.

a. A decrease in the price of pesticides.
b. An increase in the demand for wheat.
c. A rise in the price of wheat.
d. An increase in the price of corn.
e. None of the above
143. If the price elasticity of demand for a good is .75, the demand for the good can be
described as:
a. Normal.
b. Elastic.
c. Inferior
d. Inelastic.
144. When the price of a product is increased 10 percent, the quantity demanded decreases
15 percent. In this range of prices, demand for this product is:
a. Elastic
b. Inelastic.
c. Unitary elastic
d. Perfectly elastic
145. Cross elasticity of demand is:

a. Negative for complementary goods
b. Negative for substitute goods.
c. Unitary for inferior goods
d. Positive for inferior goods.
146. A 3 percent increase in the price of tea causes a 6 percent increase in the demand for
coffee. The cross elasticity of demand for coffee with respect to the price of tea is:
a. -0.5
b. +0.5
c. -2.0
d. +2.0
a. Less than 1
b. Equal to zero
c. Infinite
d. 1

a. Is less than its total revenue
b. Is greater than its total revenue
c. Equals its total revenue
d. Is less than its total revenue if its supply curve is inelastic and is greater than its total
149. When Sidney's Sweaters, Inc. makes exactly zero economic profit, Sidney, the owner
a. Makes an income equal to his best alternative forgone income.
b. Will boost output
c. Will shut down in the short run.
d. Is taking a loss
150. A perfectly competitive firm's marginal cost exceeds its marginal revenue at its current
output. To Increase its profit, the firm will
a. Increase its output
b. raise its price
c. lower its price
d. decrease its output.
151. Demand for a commodity refers to
a. Desire for the commodity
b. Need for the commodity
c. Quantity demanded of that commodity
d. Quantity of the commodity demanded at a certain price during any particular of time
152. Demand for a commodity depends on

a. Price of that commodity
b. Price of related goods
c. Income
d. All the above
153. Law of demand establishes

a. Inverse relationship between price and quantity
b. Positive relationship between price and quantity
c. Both
d. none
154. All but one of the following are assumed to remain the same while drawing an individual’s
demand curve for a commodity. Which one is it ?
a. The preference of the individual
b. His monetary income
c. The price of the good under consideration
d. The prices of other good
155. Demand for a product should have the following pre-requisite

a. Ability to buy
b. Willingness
c. Need
d. All of these
156. Cross elasticity of demand between two perfect substitutes will be

a. Law
b. High
c. Zero
d. Infinity
157. Market demand is aggregation of individual demand

a. Vertically
b. Horizontally
c. Both (a) and (b)
d. None
158. HRD deals with functions such as

a. Career development
b. Mentoring
c. Coaching
d. All the above
159. A single point on the demand curve shows

a. Demand and supply relationship
b. Price and supply relationship
c. Price and demand relationship
d. None of these
160. The fall in the price of one commodity leads to fall in demand for other commodity
and vice versa for.
a. Substitutes
b. Complementary
c. Both (a) and (b)
161. Decrease or fall in the price of commodity leads to increase in demand because of
a. Substitution Effect, i.e., Relatively cheaper than related goods
b. Income Effect, i.e., Consumer become better off
c. Both (a) and (b)
d. None of these
162. Generally the demand curve has.

a. A slope downward from left to right
b. A negative slope right
c. Both of these
d. None of these
163. The law of demand can be derived with the help of

a. Law of D.M.U. (Diminishing Marginal Utility)
b. Law of EMU (Equi-Marginal Utility)
c. Any of these two
d. None of these
164. The value of elasticity of demand ranges from.
a. Zero to one
b. One to infinity
c. Zero to infinity
d. None of these
165. When the quantity demanded of goods increases by a larger percentage as compared with
the income of the consumer, income elasticity of demand is high
a. Unitary Income Elasticity
b. Low-Income Elasticity
c. Zero-Income Elasticity
d. High-Income Elasticity
166. The relation between price and supply in law of supply is

a. Direct
b. Inverse
c. Proportional
d. None of these
167. Under perfect competition, price of the product

a. Can be controlled
b. Cannot be controlled
c. Can be controlled within certain limit
168. Perfect competition is a market situation where we have
a. A single seller
b. Two sellers
c. Large number of sellers
d. Few sellers
169. The firm can achieve equilibrium when its

a. MC = MR
b. MC = AC
c. MR = AR
d. MR = AC
170. A firm and industry are one and the same under
a. Perfect competition
b. Duopoly
c. Oligopoly
d. Monopoly
171 Homogeneity of product is characteristic of

a. Monopoly
b. Oligopoly
c. Perfect competition
172. In case of perfect competition, elasticity will be

a. O
b. 2
c. 3
d. Infinity
173. Under which of the following forms of market structure a firm does has no control over
the price of its product?
a. Monopoly
b. Monopolistic competition
c. Oligopoly
d. Perfect competition
174. Who is the price-leader under oligopoly ?

a. any unit with efficient production capabilities
b. there is no firm that can be termed as price leader under oligopoly
c. the largest firm
d. the smallest firm
175. In this one firm assumes the role of price leader and fixes the price of the product for the
entire industry
a. Price leadership
b. Cartel
c. Kinked demand curve
d. None of these
176. It is the art of translating into quantitative terms (rupees and paise) the value of the
product or a unit of a service to customers at point in time
a. Costing
b. Pricing
c. Profit analysis
d. All of the Above
177. For a monopoly, the industry demand curve is the firm's

a. Profit function
b. marginal revenue curve
c. supply curve
d. demand curve
178. If the price elasticity of demand is greater than 1, a monopoly's

a. Marginal revenue is zero
b. Total revenue decreases when the firm lowers its price
c. Marginal revenue is negative
d. Total revenue increases when the firm lowers its price
179. Consumer surplus is

a. Equal to the price minus the marginal cost
b. Less in the case of a single-price monopoly than in the case of a perfectly competitive
industry
c. Zero for a single-price monopolist
d. Positive in the case of a monopolist practicing perfect price discrimination
180. An increase in income will:

a. Lead to a movement along the demand curve
b. Shift the supply curve
c. Shift the demand curve
d. Lead to an extension of demand
181 A shift in supply will have a bigger effect on price than output if demand is
a. Income elastic
b. Income inelastic
c. Price elastic
d. Price inelastic
182. Assuming a downward sloping demand curve and upward sloping supply curve, a higher
equilibrium price may be caused by:
a. A fall in demand
b. An increase in supply
c. Improvements in production technology
d. An increase in demand
183. A movement along the supply curve may be caused by:

a. A change in technology
b. A change in the number of producers
c. A shift in demand
d. A change in costs
184. A subsidy paid to producers

a. Shifts the supply curve
b. Shifts the demand curve
c. Leads to a contraction in supply
d. Leads to an extension of supply
185. Which would definitely not be an example of price discrimination?

a. A theater charges children less than adults for a movie.
b. Universities charge higher tuition for out-of-state residents.
c. A doctor charges for services according to the income of patients.
d. An electric power company charges less for electricity used during off-peak hours
when production costs are lower.n
186. If shortly after Kellogg’s Company has announced price increases on its ready-to-eat
cereals, the other cereal manufacturers announce identical price increases on their
products, this is likely to be:
a. The essence of competition
b. A cartel
c. Price leadership
d. a coincidence.
187. Price discrimination is

a. Charging different prices to different customers because it costs the firm more to serve
some customers than others.
b. Changing the firm’s price frequently to respond to market conditions
c. Charging different prices to different customers when the price differences are not based
on cost differences.
d. Charging the same price to all customers
188. Monopolies and oligopolies are:

a. Price takers, as are competitive firms
b. Price takers, in contrast to competitive firms which are price makers
c. Price makers, in contrast to competitive firms which are price takers.
d. Price makers, as are competitive firms.
189. Concentration ratios may:

a. Overstate the extent of competition because they ignore imported products
b. Understate the extent of competition because they ignore imported products
c. Either overstate or understate the extent of competition because they ignore imported
products.
190. If new firms enter a monopolistically competitive market, the demand curves for the
existing firms will:
a. Shift to the left and become more price inelastic.
b. Shift to the left and there will be no change in price elasticity.
c. Shift to the left and become more price elastic.
d. Shift to the right and there will be no change in price elasticity
191. In the long run, monopolistically competitive firms maximize profit at the output where:
a. They earn zero economic profit.
b. P = MC.
c. Marginal cost = the minimum of the long-run average total cost curve.
192. Suppose that an economy wants to eliminate the resource waste associated with excess
capacity in monopolistically competitive markets. Which of the following actions would
achieve this goal?
a. Allow monopolistically competitive firms to create more significant barriers to entry.
b. Encourage more competition in monopolistically competitive markets.
c. Require all the firms in a given monopolistically competitive market to produce identical
products.
d. Require all the firms in a given monopolistically competitive market to charge the same
price.
193. Which best describes a demand curve?

a. The quantity consumers would like to buy in an ideal world
b. The quantity consumers are willing to sell
c. The quantity consumers are willing and able to buy at each and every income all other
things unchanged
d. The quantity consumers are willing and able to buy at each and every price all other
things unchanged
194. A fall in price:

a. Will cause an inward shift of demand
b. Will cause an outward shift of supply
c. Leads to a movement along a demand curve
d. Leads to a higher level of production
195. Demand for a normal product may shift outwards if:
a. Price decreases
b. The price of a substitute rises
c. The price of a complement rises
d. Income falls
196. According to the law of diminishing marginal utility:

a. Utility is at a maximum with the first unit
b. Increasing units of consumption increase the marginal utility
c. Marginal product will fall as more units are consumed
d. Total utility will rise at a falling rate as more units are consumed
197. If marginal utility is zero:

a. Total utility is zero
b. An additional unit of consumption will decrease total utility
c. An additional unit of consumption will increase total utility
d. Total utility is maximized
198. A decrease in income should:

a. Shift demand for an inferior product inwards
b. Shift demand for an inferior product outwards
c. Shift supply for an inferior product outwards
d. Shift supply for an inferior product inwards.
199. An increase in the price of a complement for product A would:

a. Shift demand for product A outwards
b. Shift demand for product A inwards
c. Shift supply for product A outwards
d. Shift supply for product A inwards
200. An increase in price, all other things unchanged, leads to:

a. Shift demand outwards
b. Shift demand inwards
c. A contraction of demand
d. An extension of demand
201. If a product is a Veblen good:

d. Demand is inversely related to the price of substitutes
202. If a product is an inferior good:

d. Demand is directly related to the price of substitutes
203. Average income increases from £20,000 p.a. to £22,000 p.a. Quantity demanded per year
increases from 5000 to 6000 units. Which of the following is correct?
a. Demand is price inelastic
c. Income elasticity is -2
d. The product is normal
204. The price decreases from £2,000 to £1,800. Quantity demanded per year increases from
5000 to 6000 units. Which of the following is correct?
a. The price elasticity of demand is -2
c. Income elasticity is + 0.5
d. Income elasticity is + 2
205. If the price elasticity of demand is unit then a fall in price:

a. Reduces revenue
b. Leaves revenue unchanged
c. Increases revenue
d. Reduces costs
206. If the cross elasticity of demand is -2:

a. The products are substitutes and demand is cross price elastic
b. The products are substitutes and demand is cross price inelastic
c. The products are complements and demand is cross price elastic
d. The products are complements and demand is cross price inelastic
207. The income elasticity is +2 and income increases by 20%. Sales were 5000 units, what will
they be now?
a. 3000
b. 7000
c. 5500
d. 4500
208. The price elasticity of demand is a negative number this means:
a) Demand is price elastic
b) Demand is price inelastic
c) The demand curve is downward sloping
d) An increase in income will reduce the quantity demanded
209. If demand is price inelastic:

a) An increase in price must raise profits
b) An increase in price decreases revenue
c) An increase in price increases revenue
d) A decrease in price reduces sales
210. For an inferior good:

d. The price elasticity of demand is positive; the income elasticity of demand is positive.
211. For a normal good:

d. The price elasticity of demand is positive; the income elasticity of demand is positive

a. Many interdependent firms sell a homogeneous product.
b. A few firms produce a particular type of product..
c. Many firms produce a particular type of product, but each maintains some independent
control over its own price.
d. A few firms produce all of the market supply of a good.
213. Monopolistically competitive industries are characterized by:

a. Low concentration ratios.
b. Independent production decisions.
c. Low entry barriers.
214. In monopolistic competition, a firm:

a. Has no market power.
b. Captures significant economies of scale
c. Has a downward-sloping demand curve.
d. Has a standardized product that all firms produce.
215. If there are many firms in an industry producing goods that are similar but slightly different,
this is an example of:
a. Perfect competition.
c. Oligopoly.
d. Monopoly
216. Large cities typically have many drug stores which have different qualities of service and
selections of product. The drug store market in big cities can best be classified as:
a. competitive market.
c. Oligopoly.
d. Monopoly
217. A major difference between monopoly and monopolistic competition is:

a. One maximizes profits by setting MR equal to MC, and the other does not.
b. The number of firms in the market.
c. One type of firm has market power, and the other does not.
d. One has a downward-sloping demand curve, and the other does not.
218. Entry into a market characterized by monopolistic competition is generally:

a. Entirely blocked by existing firms.
b. Very easy because few barriers exist.
c. As difficult as in oligopoly.
d. More difficult than entry into monopolized markets.

a. Price leadership
b. Product differentiation
c. Price discrimination.
d. Economies of scale.
220. Product differentiation refers to:

a. Features that make one product appear different from competing products in the same
market.
b. Different prices for the same product in a certain market.
c. The selling of identical products in different markets.
d. The charging of different prices for the same product in different markets.
221. Which of the following is an example of product differentiation?
a. Two bars of soap differ only in their label, but consumers pay 50 paisa more for the label
they recognize.
b. Sugar can be made from sugar beets or sugar cane which consumers cannot
differentiate when looking at sugar.
c. Consumers substitute vans in place of cars because vans accommodate more
passengers.
d. Some sawmills specialize in producing softwood and others specialize in producing
hardwood, but the two types of wood are used for very different purposes.
222. Perfect competition and monopolistic competition are best distinguished by:
a. The degree of product differentiation.
b. The long-run economic profits that are expected.
c. The number of firms in the market.
d. The ease of entry and exit
great change in unit sales because:
a. The demand for its product is typically very price-elastic.
b. Its demand curve is horizontal.
c. Of product differentiation and brand loyalty.
d. Of the gap in its marginal revenue curve.
great change in unit sales because of:.
a. Brand loyalty
b. Inelastic demand.
c. Economies of scale.
d. Large market shares of firms in the market
225. When a monopolistically competitive firm advertises, it is attempting to increase:

a. The demand and decrease the price elasticity of demand for its product.
b. The demand and increase the price elasticity of demand for its product.
c. Long-run profits.
d. Market demand.
226. Brand loyalty usually makes the demand curve for a product:
a. More price elastic.
b. Less price elastic.
c. Unitary elastic.
d. More income elastic.
227. Both monopoly and monopolistic competition:
a. Maximize profit where MR = MC.
b. Use advertising to differentiate their product.
c. Have high concentration ratios.
d. Have high barriers to entry.
228. A monopolistically competitive firm maximizes profits or minimizes losses in the short
run by:
a. Using marginal cost pricing.
b. Producing output at the level where ATC is minimized.
c. Producing output at the level where price equals ATC.
d. Producing output at the level where MC = MR..
229. In monopolistic competition, a firm's demand is tangent to the long-run average cost curve
in the long run because:
a. Barriers to entry are very high.
b. Entry eliminates economic profit, and exit eliminates losses.
c. Advertising is ineffective in differentiating a product.
230. The demand for wheat from farm A is perfectly elastic because wheat from farm A is a(n)
a. Perfect complement to wheat from farm B.
b. Perfect substitute for wheat from farm B.
c. Normal good.
d. Inferior good.
a. Less than 1.
b. Equal to zero.
c. Infinite.
d. 1.
232.The market for fish is perfectly competitive. So, the price elasticity of demand for fish
from a single fishery
a. Sometimes greater than and sometimes less than the elasticity of demand for fish overall.
b. Greater than the elasticity of demand for fish overall.
c. Less than the elasticity of demand for fish overall.
d. Equals the elasticity of demand for fish overall.
233. In perfect competition, the price of the product is determined where the industry
a. Elasticity of supply equals the industry elasticity of demand.
b. Supply curve and industry demand curve intersect.
c. Fixed cost is zero.
d. Average variable cost equals the industry average total cost.
234. Total economic profit is

a. Total revenue minus total opportunity cost.
b. Marginal revenue minus marginal cost.
c. Total revenue divided by total cost.
d. Marginal revenue divided by marginal cost.

a. Less than its total revenue.
b. Greater than its total revenue.
c. Its total revenue.
d. Less than its total revenue if its supply curve is inelastic and is greater than its total
236. Law of Demand explains relation between quantity demanded and ….

a. Quantity supplied
b. Price
c. Need
d. Want
237. Income Elasticity established relation between Income and ……

a. Price
b. b) Supply
c. c) Quantity Demanded
d. Income
238. Market Equilibrium relates to …….

a. Demand & Supply
b. Production and Raw Material
c. Demand and Price
d. Supply and Production
Answers
1. (e) 2. (e) 3. (d) 4. (a) 5. (b) 6. (a) 7. (d) 8. (b) 9. (e) 10. (d)
11. (d) 12. (d) 13. (a) 14. (e) 15. (a) 16. (d) 17. (e) 18. (b) 19. (a) 20. (e)
21. (e) 22. (b) 23. (e) 24. (d) 25. (a) 26. (a) 27. (b) 28. (e) 29. (e) 30. (a)
31. (d) 32, (a) 33. (d) 34. (b) 35. (e) 36. (e) 37. (b) 38. (d) 39. (a) 40. (d)
41. (d) 42. (b) 43. (e) 44. (b) 45. (e) 46. (d) 47. (e) 48. (a) 49. (d) 50. (b)
51. (a) 52. (a) 53. (b) 54. (b) 55. (d) 56. (a) 57. (b) 58. (a) 59. (d) 60. (b)
61. (b) 62. (a) 63. (b) 64. (b) 65. (e) 66. (e) 67. (d) 68. (e) 69. (b) 70. (e)
71. (b) 72. (b) 73. (e) 74. (d) 75. (d) 76. (e) 77. (b) 78. (a) 79. (d) 80. (e)
81. (b) 82. (a) 83. (d) 84. (b) 85. (a) 86. (d) 87. (e) 88. (b) 89. (a) 90. (d)
91. (e) 92. (b) 93. (a) 94. (a) 95. (b) 96. (e) 97. (d) 98. (b) 99. (d) 100. (d)
101.(d) 102.(d) 103.(a) 104.(d) 105.(b) 106.(a) 107.(a) 108.(b) 109.(d) 110.(d)
111.(c) 112.(a) 113.(b) 114.(a) 115.(c) 116.(d) 117.(b) 118.(a) 119.(c) 120.(b)
121.(c) 122.(d) 123.(a) 124.(b) 125.(a) 126.(b) 127.(d) 128.(d) 129.(d) 130.(c)
131.(c) 132.(c) 133.(b) 134.(d) 135.(d) 136.(c) 137.(c) 138.(b) 139.(a) 140.(d)
141.(c) 142.(a) 143.(a) 144.(b) 145.(d) 146.(a) 147.(d) 148.(b) 149.(c) 150.(a)
151.(d) 152.(c) 153.(b) 154.(a) 155.(d) 156.(c) 157.(d) 158.(d) 159.(d) 160.(b)
161.(a) 162.(a) 163.(b) 164.(a) 165.(a) 166.(d) 167.(a) 168.(d) 169.(d) 170.(a)
171.(a) 172.(a) 173.(a) 174.(c) 175.(b) 176.(c) 177.(c) 178.(c) 179.(b) 180.(d)
181.(c) 182.(d) 183.(d) 184.(d) 185.(b) 186.(c) 187.(c) 188.(c) 189.(b) 190.(d)
191.(c) 192.(d) 193.(d) 194.(d) 195.(d) 196.(b) 197.(a) 198.(b) 199.(c) 200.(b)
201.(a) 202.(a) 203.(d) 204.(a) 205.(c) 206.(a) 207.(b) 208.(c) 209.(d) 210.(b)
211.(b) 212.(d) 213.(d) 214.(c) 215.(d) 216.(d) 217.(c) 218.(b) 219.(b) 220.(d)
221.(b) 222.(b) 223.(d) 224.(c) 225.(a) 226.(b) 227.(b) 228.(a) 229.(c) 230.(b)
231.(a) 232.(d) 233.(d) 234(d) 235.(b) 236.(b) 237.(b) 238.(a)
Economic Analysis for Business Decisions
Chapter 1
Basic Concepts of Economics
1. The resources in an economy
(a) Are always fixed? (b) Can never decrease?
(c) Always increase over time (d) Are limited at a moment in time
2. The sacrifice involved when you choose a particular course of action is called:
(a) Alternative (b) Opportunity cost
(c) Consumer Cost (d) Producer cost
3. Which one of the following is not one of the basic economic question?
(a) What to produce? (b) For whom to produce
(c) How to produce? (d) How to minimize economic growth?
4. Economics is the study of
(a) Production technology
(b) Consumption decisions
(c) How society decides what, how and for whom to produce?
(d) The best way to run society
5. The subject matter of economics is:
(a) A physical science (b) A natural science
(c) An exact science (d) A social science
6. In economics the central problem
is
(a) Scarcity (b) Consumption
(c) Money (d) Allocation
7. Indicate below which is NOT a factor of production
(a) Land (b) Capital
(c) A bank Loan (d) Labour
8. The circular flow of money shows the relationship between
(a) Firms and households (b) Income and money
(c) Goods and services (d) Wages and salaries
All in One Multiple Choice Questions 29
9. Who has presented the theory of invisible hand?

(a) David Recardo (b) Philip Kotler
(c) Adam Smith (d) Adam Ohlin
10. What all sectors are there in two sector model?
(a) Bank & Industry (b) Firm & Bank
(c) Household & Government (d) Firm & Household
11. Injection is when ____________ activity takes place in economy.
(a) Import (b) Export
(c) Advertising (d) Tax payment
12. Leakage is when ____________ activity takes place in economy.
(a) Import (b) Export
(c) Advertising (d) Tax payment
13. Which principal of economics studies an increase in cost for one additional unit?
(a) Incremental (b) Marginal (c) Static (d) Opportunity cost
14. Which one in following is not an objective of firm?
(a) Profit Maximization (b) Investment Maximization
(c) Growth Maximization (d) Tax Maximization
15. When a hired person gives priority to individual goal rather than firm’s/owner’s it is considered
as…
(a) Principle agent problem (b) Principle shareholder problem
(c) Manager problem (d) Hired person’s problem
16. Which factor differentiates accounting and economic profit?
(a) Implicit cost (b) Production cost
(c) Labour cost (d) Procurement cost
17. All of the following is purview of micro economics except____________
(a) What to produce? (b) How to produce?
(c) For whom to produce? (d) Is economy growing?
18. Welfare economics deals with:
(a) Whether resources are optimally generated?
(b) How to identify a socially efficient allocation of resources?
(c) For whom to produce resources?
(d) Whether distribution is done on the basis of ability to pay principle?
30 All in One Multiple Choice Questions
19. The “invisible hand” refers to

(a) Fact that the tax system redistributes income from rich to poor.
(b) notion that, under competition, buying and selling decisions motivated by self-interest
promote the social interest
(c) tendency of monopolistic sellers to raise prices above competitive levels
(d) hands of shoplifters caught red-handed by video cameras at stores
20. Which sectors form a three sector model of circular flow?
(a) Household, firm and bank (b) Household, firm, and rest of world
(c) Government, firm and bank (d) Household, government and bank
21. Which of the following is not an example of macro economics?
(a) National income (b) Employment
(c) Net profit of Infosys (d) Poverty
22. What is disposable income?
(a) Total income + taxes (b) Total income – taxes
(c) Total income + subsidies (d) Total income – subsidies
23. Which of the following is an objective of firm?
(a) Salary maximization (b) Interest maximization
(c) Wealth maximization (d) High employee turnover
24. Which of the following is not an objective of firm?
(a) Wealth maximization (b) Profit maximization
(c) Social concern (d) High employee turnover
25. What is maximization?
(a) Increasing profit
(b) Decreasing cost
(c) Increasing desired one at cost of anything
(d) Decreasing quality
26. What is optimization?
(a) Increasing profit without quality
(b) Increasing quality with high cost
(c) Decreasing undesired and increasing desired one.
(d) Decreasing cost
27. What is satisficing?

(a) Aiming for employee turnover
(b) Aiming for decreasing sales turnover
(c) Aiming for reducing economic profit

(d) Aiming for satisfactory results
28. What is principle agent problem?
(a) Conflict between employee and employer
(b) Conflict between employee and dealer
(c) Conflict between firm and government
(d) Conflict between firm and society
29. Economic profit includes ____________.
(a) Implicit and explicit cost (b) Implicit cost
(c) Explicit cost (d) Opportunity cost
30. Accounting profit excludes____________.
(a) Labour cost (b) Explicit cost
(c) Opportunity cost (d) Travelling cost
31. This profit is considered for exit decision of firm ____________.
(a) Economic profit (b) Accounting profit
(c) Gross profit (d) Net profit
32. This profit is considered for calculation of tax liability____________.
(a) Economic profit (b) Accounting profit (c) Abnormal profit (d)
Supernormal profit
33. Accounting profit is determined by ____________.
(a) Sales – cost (b) Sales – opportunity cost
(c) Sales – variable cost (d) Sales – revenue
34. What is national accounting
identity?
(a) Income = production (b) Income = tax liability
(c) Income = cost (d) Income = profit
35. Demand for a product refers to ____________.
(a) Need for a product (b) Desire for a product
(c) Desire to buy a product (d) Desire to buy a product with paying ability
36. Choice in economics is considered as
(a) Human Behaviour for dealing with scarcity
(b) Want
(c) Desire
(d) Purchasing ability
37. Micro economics deals with the problem of
(a) Economy (b) Unemployment

(c) Poverty (d) Firm
38. Who amongst the following is known as father of economics:
(a) Alfred Marshall (b) Adam Smith (c) R. Coase (d) Peter Drucker
39. In which book the theory of invisible hand is described:
(a) The Nation of wealth (b) The wealth of nation
(c) The theory of moral sentiments (d) An enquiry into the nation
40) Existence of profit in market improves:
(a)Cost (b) Employment

(c) Poverty (d) Efficiency of firm
41. Which of the following is true
(a) Accounting profit and economic profit are same
(b) Economic profit is used for calculating tax liability
(c) Accounting profit differs from economic profit
(d) Annual profit excludes implicit cost
42. Which of the following is the term of micro economics?
(a) Firm (b) National income
(c) Union budget (d) Employment
43. Accounting profit is determined by
(a) GAAP (b) GATT
(c) IFRS (d) Economic principles
44. Economic profit is determined by
(a) GAAP (b) GATT
(c) IFRS (d) Economic principles
45. Economics is the term derived from
(a) Japan (b) Greek
(c) Latin (d) India
46. What is market?
(a) Where selling activity takes place
(b) Where purchases take place
(c) Where buyer and seller meet to sell and buy
(d) Where cost of a product is determined
47. What is production function?
(a) Purchasing raw material (b) Purchasing factors of production

(c) Converting output in to input (d) Producing goods and services
48. What is short-run?
(a) All factors of production are flexible
(b) One factor of production is flexible
(c) At least a factor of production is constant
(d) All factors of production are constant
49. What is long-run perspective?
(a) All factors of production are flexible
(b) All factors of production are constant
(c) One factor of production is constant
(d) One factor of production is flexible
50. Which of the following is not an economic activity?
(a) A manager is taking decision of purchasing raw material
(b) An individual is paying tax
(c) Mr Right is taking care of his mother
(d) An agent is purchasing shares for client
Answer Key of Chapter 1
1. (d) 11. (b) 21. (c) 31. (a) 41. (c)
2. (b) 12. (a) 22. (b) 32. (b) 42. (a)
3. (d) 13. (b) 23. (c) 33. (a) 43. (a)
4. (c) 14. (d) 24. (d) 34. (a) 44. (d)
5. (d) 15. (a) 25. (c) 35. (d) 45. (b)
6. (a) 16. (a) 26. (c) 36. (a) 46. (c)
7. (c) 17. (d) 27. (d) 37. (d) 47. (d)
8. (a) 18. (b) 28. (a) 38. (b) 48. (c)
9. (c) 19. (b) 29. (a) 39. (b) 49. (a)
10. (d) 20. (a) 30. (c) 40. (d) 50. (c)
Chapter 2 Demand Analysis and

Forecasting
1. Relationship between price and demand is ____________.

(a) Direct (b) Inverse
(c) Proportionate (d) Positive
2. The meaning of term ceteris paribus is ____________.
(a) Other things being equal (b) Other things are changeable
(c) Other things are different (d) Other things are movable
3. What is demand schedule?
(a) Table that shows relationship between price and quantity demanded
(b) Table showing relationship between price and quantity supplied (c) Table that shows
relationship between demand and income
(d) Table showing relationship between demand and supply
4. What is demand curve?
(a) Shows relationship between price and quantity supplied
(b) Indicates the quantity demanded at each price in a series of prices
(c) Graphs as an upward sloping line
(d) Shows the relationship between income and spending
5. Law of demand states…
(a) There is an inverse relationship between price and quantity demanded
(b) There is no relationship between price and quantity demanded
(c) There is positive relationship between price and quantity demanded
(d) Price changes as per the change in demand
6. Law of supply states ____________.
(a) There is inverse relationship between price and quantity supplied
(b) There is positive relationship between price and income
(c) There is positive relationship between price and quantity supplied
(d) There is positive relationship between supply and demand
7. What is schedule of supply?
(a) Table showing relationship between price and quantity demanded
(b) Table showing relationship price and quantity supplied
(c) Table showing relationship between price and income
(d) Table showing relationship between supply and demand
8. Historical data is used in estimating future demand under…
(a) Survey method (b) Expert opinion method

(c) Statistical method (d) Complete enumeration method
9. An increase in supply, demand remaining constant will change the equilibrium..
(a) Causing a fall in price (b) Causing a backward shift in demand curve
(c) Causing no change in price (d) Causing no change in income
10. The market structure where very few sellers sell slightly different products referred to as…
(a) Perfect competition (b) Pure monopoly
(c) Duopoly (d) Oligopoly
11. Which of the following is an example of an economic barrier to entry?
(a) Network externalities (b) Copyrights
(c) Patent (d) Dumping
12. A monopoly that arises because of economies of scale is referred to
(a) Local monopoly (b) Natural monopoly (c) Network monopoly (d)
Regulated monopoly
13. Which of the following is not a condition of oligopoly?
(a) Each seller can influence the market prices
(b) Each firm must consider the behaviour of its rivals
(c) Each firm faces a perfectly elastic demand curve
(d) Entry into a market is difficult
14. Which one is not the type of elasticity of demand?
(a) Price (b) Consumer preferences
(c) Income (d) Cross
15. When do we say that product is elastic?
(a) No impact of price change on demand
(b) Change of income effects price
(c) Demand changes as per changes in price (d) Demand does not change as per change in
price
16. Which one is not the method of demand forecasting?
(a) Barometric (b) Multiple regression
(c) Moving average (d) Game theory
17. What is profit maximization point?
(a) AR=MR (b) MR=MC
(c) MC=AC (d) AC=MR
18. Which of following is not a characteristic of perfect competition?
(a) Free entry and exit (b) Heterogeneous products

(c) Good market knowledge (d) Price taker
19. What kind of profit firm earns in long-run perfect competition?
(a) Accounting (b) Normal
(c) Supernormal (d) Abnormal
20. Which two curves help to understand revenue and cost?
(a) AR & MC (b) AR & AC
(c) AC & MR (d) MC & MR
21. When a fall in the price of one good reduces the demand for another good, the two goods are
called ____________.
(a) Complimentary goods (b) Substitutes
(c) Normal goods (d) Inferior goods
22. When a fall in the price of one good increases the demand for another good, the two goods
are called
(a) Complimentary goods (b) Substitutes
(c) Normal goods (d) Inferior goods
23. Upward-sloping line relating price to quantity supplied is called as ____________.
(a) Supply curve (b) Demand curve
(c) Supply schedule (d) Supply elasticity
24. Movement along the supply curve caused by a change in the market price of the product is
called as ____________.
(a) Change in supply (b) Change in quantity supplied
(c) Change in supply elasticity (d) Change in prices of products
25. A shift in the supply curve, either to the left or right caused by a change in a determinant other
than price is called as
(a) Change in supply (b) Change in quantity supplied
(c) Change in supply elasticity (d) Change in income elasticity
26. Which of the following is an exception to law of demand?
(a) Inferior goods (b) Bread and butter
(c) Shelter (d) Government taxes
27. Quantity demanded does not responds to change in price is called as
(a) Perfectly elastic (b) Perfectly inelastic
(c) Unitary elastic (d) Unitary inelastic
28. Quantity demanded changes infinitely with any change in price is called as ____________.

29. Quantity demanded changes by the same percentage as the price is called as ____________.
30. Which of the following is not an assumption of perfect competition?
(a) Restricted entry into the industry (b) Many firms
(c) Many buyers (d) Each firm sells an identical product
31. A monopolist is a
(a) Price taker
(b) Price setter
(c) Produces a product that has a close substitute
(d) Must constantly worry about the other firms entering into market
32. Why monopoly earns economic profit in long-run?
(a) Because there is single firm in market
(b) Because the firm protected by barriers to entry
(c) Because there are close substitutes to firm’s product
(d) All the above
33. Price discrimination is the practice of charging different prices to
(a) Different countries because of tariffs and transportation cost
(b) Different customers because the costs of selling are different
(c) Different customers even though cost of selling to each is the same
(d) The same customers because of changes in cost
34. Monopolistic competition is a market structure in which
(a) There are barriers to entry
(b) A small number of firms compete
(c) Firms only compete on product price
(d) Each firm produces a differentiated product
35. In the long-run, in monopolistic competition firm earns ____________.
(a) Normal profit (b) Abnormal profit
(c) Supernormal profit (d) Net profit
36. An oligopoly is a market structure in which there are (a) Many sellers selling a
differentiated product.
(b) Only a few buyers but many sellers.
(c) A few products sold by many sellers.
(d) Only a few sellers selling either an identical or differentiated product.

37. The kinked demand curve model assumes that a firm's rivals will
(a) Follow the firm's price decreases but not its price increases.
(b) Not follow any of the firm's price changes.
(c) Follow any price change the firm makes.
(d) Follow the firm's price increases but not its price decreases.
38. In the short-run, a firm in monopolistic competition produces profit where
(a) MR = MC.
(b) MR = MC and economic profit is equal to zero.
(c) The given market price is equal to MC and economic profit is equal to zero.
(d) The given market price is equal to MC.
39. In monopolistic competition, a firm can determine what price to set for its product because
(a) There are many buyers.
(b) There are many sellers.
(c) The demand for its product is not perfectly elastic.
(d) The demand for its product is perfectly elastic.
40. When a market is in equilibrium,
(a) There is no shortage and no surplus at the equilibrium price.
(b) Everyone has all they want of the commodity in question.
(c) The supply curve has the same slope as the demand curve.
(d) The number of buyers is exactly equal to the number of sellers.
41. When demand increases, the equilibrium price ____________ and the equilibrium quantity
____________.
(a) Falls; increases (b) Rises; increases
(c) Rises; decreases (d) Falls; decreases
42. If the demand for a good is elastic, that means that when price increases (a) The demand will
decrease.
(b) The quantity demanded will decrease by a greater percentage than the price increased.
(c) The quantity demanded will increase.
(d) The quantity demanded will decrease by a smaller percentage than the price increased.
43. If demand is inelastic, an increase in the price will
(a) Not change total revenue.(b) Increase the quantity demanded.
(c) Increase total revenue. (d) Decrease total revenue.
44. If the cross elasticity of demand between coffee and tea is positive, an increase in the price of
tea will shift the demand curve for
(a) Tea leftward. (b) Tea rightward.
(c) Coffee leftward. (d) Coffee rightward.
45. The income elasticity of demand is (a) Always negative.
(b) Always positive.
(c) Negative for a normal good and positive for an inferior good.
(d) Positive for a normal good and negative for an inferior good.
46. Which of the following is a defining characteristic of a perfectly competitive industry?
(a) No restrictions on entry into the industry
(b) Persistent economic profits in the long-run
(c) Advertisements by well-known celebrities
(d) Higher prices being charged for certain name brands
47. Individual firms in perfectly competitive industries are price takers because (a) Each
individual firm is too small to affect the market price.
(b) The government sets all prices.
(c) Firms decide together on the best prices to charge.
(d) Buyers set prices.
48. The firm's goal is to
(a) Maximize its total revenue. (b) Maximize its normal profit.
(c) Maximize its economic profit. (d) Maximize its industry's revenue.
49. barrier to entry is

(a) A brick wall that a firm places around its corporate headquarters.
(b) The result of highly elastic demand.
(c) A natural or legal impediment that makes it difficult for new firms to enter a market.
(d) A necessary condition for perfect competition.
50. If marginal revenue exceeds marginal cost, to increase its profit the firm will
(a) Shut down. (b) Keep its output the same.
(c) Increase its output. (d) Decrease its output.
1. (b) 11. (a) 21. (b) 31. (b) 41. (b)
2. (a) 12. (b) 22. (a) 32. (b) 42. (b)
3. (a) 13. (c) 23. (a) 33. (c) 43. (c)
4. (b) 14. (b) 24. (b) 34. (d) 44. (d)
5. (a) 15. (c) 25. (a) 35. (a) 45. (d)
6. (c) 16. (d) 26. (a) 36. (d) 46. (a)
7. (b) 17. (b) 27. (b) 37. (a) 47. (a)
8. (c) 18. (b) 28. (a) 38. (a) 48. (c)
9. (a) 19. (b) 29. (c) 39. (c) 49. (c)
10. (d) 20. (b) 30. (a) 40. (a) 50. (c)
Chapter 3
Cost Concepts
1. BENEFIT forgiven for an alternative choice is known as ____________.

(a) Loss (b) Opportunity cost
(c) Factor cost (d) Product cost
2. A cost that has already been incurred and thus can not be recovered is called as…
(a) Opportunity cost (b) Sunk cost (c) Direct
cost (d) Deferred cost
3. Which cost is not recorded in the books of accounts?
(a) Explicit cost (b) Implicit cost
(c) Direct cost (d) Factory cost
4. Economic profit includes which
cost?
A
(a) Only Implicit cost (b) Only Opportunity cost
(c) Only Material cost (d) Implicit and explicit
5. Cost volume analysis is also known as____________.
(a) Break-even analysis (b) Regression analysis
(c) Technical analysis (d) Fundamental analysis
6. What is Break-even Point?
(a) No loss no profit situation (b) No profit situation
(c) No loss situation (d) Profit situation
7. Accounting profit excludes
(a) Explicit cost (b) Opportunity cost
(c) Material cost (d) Advertising cost
8. What is incremental cost?
(a) The additional cost for additional quantity
(b) The additional cost for one additional unit
(c) Cost of promotion
(d) Cost of research
9. CVP analysis helps to reach ____________.
(a) Cost minimization point (b) Marginal point
(c) Break-even point (d) Reengineering point
10. Everything manufactured is sold is an assumption of ____________.
(a) ABC analysis (b) XYZ analysis
(c) Fundamental analysis (d) CVP analysis
11. A situation in which there is more than one possible outcome to a decision and the probability
of each specific outcome is known or can be estimated is called as ____________.
(a) Certainty (b) Uncertainty
(c) Risk (d) No risk
12. situation in which there is more than one possible outcome to a decision and the probability of
each specific outcome is not known or can not be estimated is called as…
13. The situation where there is only one possible outcome to a decision and is known precisely is
called as ____________.
14. What is expected value?
(a) Sum of possible outcome (b) Average of possible outcome

(c) Discounted value of outcome (d) Compound value of outcome
15. What is risk management?
(a) Minimization of risk
(b) Maximization of certainty
(c) Identification, assessment and prioritisation of risks
(d) Evaluation of risk
16. Which of the following is not a technique of risk management?
(a) Insurance (b) Diversification (c) Hedging (d) Investing in shares
17. Which of the following is the technique of risk management?
(a) Stock investment (b) Stock shortlisting
(c) Hedging (d) Loan syndication
18. What is hedging?
(a) Improving profitability (b) Increasing investment limit
(c) Strategy of reducing risk (d) Selling of investment
19. What is insurance?

(a) Person transfers the cost of potential loss to another entity in exchange for monetary
compensation.
(b) Increasing risk
(c) Decreasing profit
(d) Purchasing stock
20. What is diversification?
(a) Combining variety of investments in a portfolio
(b) Distribution of profit
(c) Distribution of maturity
(d) Selling investment
21. What helps to protect one’s capital against effects of inflation?
(a) Hedging (b) Insurance
(c) Fixed deposit (d) Real estates
22. What is decision tree?
(a) Graph that uses a branching method to illustrate every possible outcome of a decision.
(b) Taking multiple decisions
(c) Distribution of risk
(d) Distribution of cost
A
23. Which type of node is not a part of decision tree?
(a) Decision node (b) Outcome node
(c) Chance node (d) End node
24. Decision node is represented by
(a) Square (b) Rectangle
(c) Circle (c) Triangle
25. Chance node is represented by
(c) Circle (d) Triangle
26. End node is represented by
(c) Circle (d) Triangle
27. What is marginal cost?
(a) Cost of material (b) Cost of an additional unit
(c) Cost of labour (d) Cost of overheads
28. Who is the regulator of insurance
market?
(a) RBI (b) SEBI
(c) IRDA (d) WTO
29. What is cost?
(a) the amount of money needed to buy, do, or make something
(b) selling price
(c) market price
(d) economic value of an asset
30. What is fixed cost?
(a) Cost which does not remain constant
(b) Cost which does not change
(c) Cost that varies (d) Cost which is flexible
31. What is variable cost?
(a) Cost which changes as per the production change.
(b) Cost which does not change
(c) Cost which remains constant
(d) Cost which does not vary
32. cost that can be directly related to producing specific goods or performing a specific service is
called as ____________.
(a) Indirect cost (b) Selling price

(c) Production cost (d) Direct cost
33. A cost that has occurred but it is not initially shown or reported as a separate cost is called as
____________.
(a) Explicit cost (b) Promotion cost
(c) Total cost (d) Implicit cost
34. A cost that has occurred and is clearly reported as a separate cost is called as ...
(a) Explicit cost (b) Total cost
(c) Selling cost (d) Implicit cost
35. Which of following is not a technique of marginal costing?
(a) PV Ratio (b) BEP
(c) PV analysis (d) Cost sheet
36. Which of the following is an assumption of CVP analysis?
(a) Whatever is produced is sold (b) Sales vary as per demand (c) Sales
prices changes as per supply (d) Everything produced is not sold
37. Which of the following is not an assumption of CVP analysis?
(a) Sales price is constant (b) Sales price varies
(c) Fixed cost is constant (d) Whatever is produced is sold
38. What is contribution?
(a) Sales- Fixed cost (b) Sales – Variable cost
(c) Sales – Profit (d) Sales – total cost
39. Which of the following is true?
(a) Profit = sales – (Variable cost + Fixed Cost)
(b) Profit = sales – contribution
(c) Profit = sales – variable cost
(d) Profit = sales – fixed cost
40. Which of the following is not a part of Break-even Analysis?
(a) Sales (b) Variable cost
(c) Fixed cost (d) Capital
41. What is incremental principle?
(a) Estimating sales prices at increased level
(b) Estimating revenue at increased level
(c) Estimating cost reduction at increased level
A
(d) Estimating the impact of decision alternative on cost & revenue
42. What is incremental revenue?
(a) Total revenue of historical year
(b) Total revenue of current year
(c) Total revenue resulting from a decision
(d) Total estimated revenue
43. Which of following is true?
(a) Decision is profitable if is it increases revenue than cost
(b) Decision is profitable if is reduces cost & revenue
(c) Decision is profitable if it increases cost
(d) Decision is profitable if it reduces cost and total revenue
44. Which of the following is not true about incremental analysis?
(a) Cost & revenue are the components of incremental analysis
(b) Alternative decisions are available
(c) Decision impacts on cost and revenue
(d) Decision does not impacts on cost and revenue
45. Which of following is true?
(a) Marginal cost is cost for increased production
(b) Marginal cost is cost of additional one unit
(c) Marginal cost is cost decreased production (d) Marginal cost is not recorded in
books of accounts
46. Which of the following is not an example of sunk cost?
(a) Rent (b) Research and development cost
(c) Advertising (d) Capital
47. Which of following is not an example of explicit cost?
(a) Labour cost (b) Material cost
(c) Overhead cost (d) Opportunity cost
48. Sales made over and above BEP is known as
(a) Margin of safety (b) Marginal cost
(c) Contribution (d) Surplus margin
49. Point at which total revenue and total cost is equal is called as ____________.
(a) CVP (b) BEP
(c) Marginal point (d) Central point

50. Maturity date of an investment is 23rd November 2016, is an example of ____________.
(a) Uncertainty (b) Certainty
(c) Risk (d) None of the above
1. (b) 11. (c) 21. (a) 31. (a) 41. (d)
2. (b) 12. (b) 22. (a) 32. (d) 42. (c)
3. (b) 13. (a) 23. (b) 33. (d) 43. (a)
4. (d) 14. (b) 24. (a) 34. (a) 44. (d)
5. (a) 15. (c) 25. (c) 35. (d) 45. (b)
6. (a) 16. (d) 26. (d) 36. (a) 46. (d)
7. (b) 17. (c) 27. (b) 37. (b) 47. (d)
8. (a) 18. (c) 28. (c) 38. (b) 48. (a)
9. (c) 19. (a) 29. (a) 39. (a) 49. (b)
10. (d) 20. (a) 30. (b) 40. (d) 50. (b)
Chapter 4 Money and Capital

Markets in India
1. What is money market?

(a) A place where only debt instruments are traded
(b) Bond market
(c) A place where high liquid financial instruments are traded (d) A place where
high maturity financial instruments are traded
2. Who regulates money market?
(a) RBI (b) SEBI (c) IRDA (d) SIDBI
3. Which is not the instrument of money market?
(a) CP (b) CD
(c) T-Bill (d) Fixed Deposit
4. Which of the following is an instrument of money market?
(a) Debentures (b) Preference shares
(c) ADR (d) Bill of Exchange
5. What is the minimum amount limit in Treasury bill?
(a) 26000 (b) 25000
(c) 30000 (d) 100000
6. What is the tenure of T-Bill?
(a) Less than one year (b) More than one year
(c) Two years (d) One year
7. What is bill of exchange?
(a) Unconditional order to pay a sum of money.
(b) Saving certificate with fixed maturity
(c) Unsecured short-term debt instrument
(d) Long-term debt instrument
8. Which of the following is not a party involved in bill of exchange?
(a) Society (b) Drawer (c) Payee (d) Endorsee
9. What is commercial paper?
10. What is the tenure of commercial paper?
(a) 30 days to 270 days (b) 300 days

(c) 360 days (d) 2 years
11. What is certificate of deposit?
12. What is the tenure of certificate of deposit?
(a) 2 years (b) 1.5 years
(c) 7 days to one year (d) 1 day to 365 days
13. CBLO stands for ____________.
(a) Collateralized Borrowing and Lending Obligation
(b) Central borrowing & lending Obligation
(c) Commercial borrowing and liquidity object
(d) Collateral borrowing and legal obligation
14. What is collateralized borrowing and lending obligation?
(a) a money market instrument that represents an obligation between a borrower and a lender
as to the terms and conditions of the loan.
(b) A capital market instrument that represents an obligation between a borrower and a lender
as to the terms and conditions of the loan
(c) A forex market instrument that represents an obligation between a borrower and a lender as
to the terms and conditions of the loan
(d) A share market instrument that represents an obligation between a borrower and a lender as
to the terms and conditions of the loan
15. What is the tenure of CBLO?
(a) More than a year (b) A year
(c) Less than a year (d) 1year to 2 years
16. BOP is ____________.
(a) Record of country’s payments
(b) Record of all economic transactions between country residents and rest of world
(c) Record of payment transactions between country residents and rest of world
(d) Record of all receipts between country residents and rest of world
17. BOP stand for ____________.
(a) Bills of payment (b) Balance of payment
(c) Borrowing for payment (d) Balance of policy
18. Which of the following is an apex institution of Indian economy?

(a) SEBI (b) RBI
(c) SBI (d) IRDA
19. RBI is established in
____________.
(a) 1935 Mumbai (b) 1935 Kolkata
(c) 1937 Mumbai (d) 1937 Calcutta
(b)
20. SEBI stands for ____________.
(a) Social Economic Board of India Securities Economic Board of India
(c) Securities Exchange Board of India(d) Securities Extending Board of India
21. SEBI is established in ____________.
(a) 1991 (b) 1992
(c) 1990 (d) 1993
22. Which of the following is not the function of SEBI?
(a) Issuer (b) Creditor
(c) Regulator (d) Protector
23. Which of the following is not the function of money market?
(a) Promotes liquidity (b) Regulates currency
(c) Mobility (d) Provides funds
24. Which among the following is not the function of SEBI?
(a) Regulating capital market (b) Regulating money market
(c) Regulating credit rating agencies (d) Regulating underwriters
25. Which among the following is function of RBI?
(a) Regulating capital market (b) Regulating money market (c) Regulating goods
market (d) Regulating insurance policies
26. Which among the following is not the function of RBI?
(a) Regulating capital market (b) Regulating currency (c) Regulating
BOP (d) Regulating money market
27. Which among the following is the central bank of India?
(a) RBI (b) SBI
(c) BOI (d) BOM
28. Balance of payment defines the relationship between ____________.
(a) Foreign exchange (b) Local trade
(c) Borrowing and lending (d) Receipts and payments
29. What is capital market?
(a) Financial market dealing with long-term instruments
(b) Financial market dealing with insurance instruments
(c) Financial market dealing with liquid instruments
(d) Financial market dealing with cash instrument
30. What is composition of Capital market?
(a) Primary & secondary market
(b)
(b) Primary and forex market
(c) Secondary and debt market
(d) Secondary and forex market
31. How many companies are considered for calculating BSE index?
(a) 25 (b) 50
(c) 30 (d) 42
32. Who regulates capital market?
(a) RBI SBI
(c) SEBI (d) IRD
33. How many companies are considered for calculating NSE index?
(a) 25 (b) 50
(c) 30 (d) 42
34. Stock exchanges are regulated by ____________.
(a) SEBI (b) BSE
(c) SBI (d) RBI
35. OMO stands for ____________.
(a) Obligation monetary operations
(b) Open market operations
(c) Open money operation
(d) Open monetary operation
36. Which among the following is the stock exchange of India?
(a) NASDAQ (b) HKSE
(c) NSE (d) ESE
37. Who amongst the following is not a part of capital market?
(a) Primary market (b) Secondary market
(c) Debt market (d) Liquid market
38. Who amongst the following is not a part of money market?
(a) Secondary market (b) Liquid instrument market
(c) Insurance market (d) Primary market
39. GDR stand for
(a) Global Depository Receipts (b) Global Debt Receipt
(c) Global Doubtful Receipts (d) Global Depository Regulator
40. ADR stands for
(b)
(a) American Doubtful Receipt (b) American Depository Receipt
(c) American Debt Receipt (d) Asian Debt Receipt
41. What is debenture?
(a) Debt instrument (b) Share instrument
(c) Liquid instrument (d) Depositary instrument
42. What is a share?
(a) Debt instrument (b) Stock
(c) Depositary instrument (d) Insurance instrument
43. What is bond?
(a) Debt instrument (b) Depositary instrument
(c) Share instrument (d) Stock
44. What is hedge fund?
(a) Pool of underlying securities Pool of fixed deposits
(c) Pool of debentures (d) Pool of currencies
45. What is gold ETF?
(a) Units representing in physical gold, which may be in paper or dematerialized form
(b) Units representing in mutual gold
(c) Units representing gold in paper form only (d) Units representing gold in
dematerialized form only
46. Which of the following is not a type of debenture?
(a) Fully convertible
(b) Partially convertible (c) Non-convertible
(d) Mutually convertible
47. What is the core function of capital market?
(a) Provides liquid sources of funds
(b) Provides long-term sources of funds
(c) Regulating mutual funds
(d) Regulates currency
48. What is the core function of money market?
(a) Provides liquid sources of funds
(b) Provides long-term sources of funds
(c) Regulating mutual funds
(d) Regulates currency
(b)
49. What is ADR?
(a) Securities of non U. S. company that trades in U. S market
(b) Securities from U. S. company that trades in U.S. market (c) Securities of Indian
company that trades in U.S. market (d) Securities of U. S. company that trades in Indian
Market
50. What is GDR?
(a) a bank certificate issued in more than one country for shares in a foreign company
(b) a bank certificate issued in one country for shares in Indian company
(c) Securities of Indian company that trades in U.S. market
(d) Securities of U. S. company that trades in Indian Market
1. (c) 11. (b) 21. (b) 31. (c) 41. (a)
2. (a) 12. (d) 22. (b) 32. (c) 42. (b)
3. (d) 13. (a) 23. (b) 33. (c) 43. (a)
4. (d) 14. (a) 24. (b) 34. (a) 44. (a)
5. (b) 15. (c) 25. (b) 35. (b) 45. (a)
6. (a) 16. (b) 26. (a) 36. (c) 46. (d)
7. (a) 17. (b) 27. (a) 37. (d) 47. (b)
8. (a) 18. (b) 28. (a) 38. (c) 48. (a)
9. (c) 19. (b) 29. (a) 39. (a) 49. (a)
10. (a) 20. (c) 30. (a) 40. (b) 50. (a)
Chapter 5 Public Finance

Infrastructure
1. GDP stands for ____________.

(a) Gross Demand of Product (b) Gross Domestic Product
(c) Global Demand of Product (d) 2. GNP Gross Domestic Price
Stands for ____________.
(a) Global Net Product (b) Gross National Price
(c) Gross National Product (d) Global Net Price
3. PPP stands for ____________.
(a) Public private parity (b) Public private performance
(c) Public purchase power (d) Purchase power parity
4. GATT Stands for ____________.
(a) Gross agreement on trade and tariff
(b) General agreement on trade and tariff
(c) General agreement on tariff and trade
(d) Gross agreement on tariff and trade
5. WTO stands for ____________.
(a) World Trade Organisation (b) World Trade Office
(c) World Tourism Organisation (d) World Transportation Organisation
6. WTO was established in ____________.

(a) 1993 (b) 1994
(c) 1995 (c) 1998
7. The headquarter of WTO is in ____________
(a) Singapore (b) USA
(c) UK (d) Switzerland
8. Which of the following is added to national income while calculating personal income?
(a) Transfer payments to individuals (b) Social security contributions
(c) Corporate taxes (d) Undistributed profits
9. Which of the following method/s is/are used to calculate national income in India?
(a) Production method (b) Expenditure method
(c) Income method (d) All the above
10. The national income estimation is the responsibility of
(a) NSSO (b) CSO
(c) Finance Ministry (d) National Income Committee
11. Consider the following statements and identify the right ones.
(i) The data for NI and PCI are collected at current prices.
(ii) They are deflated using the deflator index to get value at constant prices.
(a) (i) only (b) (ii) only
(c) both (d) none
12. The most appropriate measure of a country's economic growth is
(a) GDP (b) NDP
(c) Per capita real income (d) GNP
13. Consider the following statements and identify the right ones.
(i) National income is the monetary value of all final goods and services produced.
(ii) Depreciation is deducted from gross value to get the net value
(a) (i) only (b) (ii) only
(c) both (d) none
14. The net value of GDP after deducting depreciation from GDP is
(a) Net national product (b) Net domestic product
(c) Gross national product (d) Disposable income
15. When depreciation is deducted from GNP, the net value is
(a) Net national product (b) Net domestic product
(c) Gross national product (d) Disposable income
16. The value of NNP at consumer point is
(a) NNP at factor cost (b) NNP at market price
(c) GNP at market price (d) GNP at factor cost
17. The value of NNP at production point is called
(a) NNP at factor cost (b) NNP at market price
(c) GNP at market price (d) GNP at factor cost
18. The value of national income adjusted for inflation is called
(a) Per capita income (b) Disposable income
(c) Inflation rate (d) Real national income
19. The average income of the country
is
(a) Per capita income (b) Disposable income
(c) Inflation rate (d) Real national income
20. Which among the following statement in true ____________.
(a) National Expenditure = National Income
(b) National Expenditure = National Income+ National savings
(c) National Expenditure = National Income + Taxes (d) National Expenditure =
National Income – Taxes
21. Which statement is true?

(a) National Income = National expenditure - Indirect taxes
(b) NI = GNP – NNP
(c) NI = NNP – Indirect taxes
(d) NI = PI
22. How many methods are there to measure the national income ____________.
(a) 1 (b) 5 (c) 3 (d) 4
23. If we compare GDP and GNP, then:
(a) GNP = GDP – net income from abroad
(b) GNP = GDP + net income from abroad
(c) GNP = NNP – net income from abroad (d) GNP = NNP + net income from
abroad
24. It is deducted from GNP to get NNP:
(a) Indirect taxes (b) Depreciation (c) Direct taxes (d) Transfer payment
25. It is added to GDP to get GNP ____________.
(a) allowance (b) Direct taxes (c) Subsidies (d) Net income from abroad
26. Which is among the following has a largest figure ____________.
(a) NNP (b) GNP
(c) PCI (d) PI
27. The largest part of national income goes to ____________.
(a) Consumption (b) Investment
(c) Saving (d) Transfer payment
28. When national income is estimated by expenditure method, we include:
(a) All Govt. Expenditure
(b) All household expenditure
(c) All expenditure of the business sector
(d) All of the above
29. Total value of all final goods and services produced in a country during one year is:
(a) GDP (b) GNP
(c) NNP (d) NI
30. It is not included in estimation of national income:
(a) Illegal income (b) Services of housewife
(c) Imports (d) None of these
31. Which statement among the following is true ____________.

(a) NI = rent + interest + wages + profit
(b) NI = rent + interest + wages + taxes
(c) NI = Govt. expenditure + interest + wages + profit
(d) NI = rent + interest + wages + pensions
32. Determinants of national income are ____________.
(a) Natural resources, human resources, monetary resources (b) Natural resources,
capital resources, monetary resources (c) Natural resources, capital resources, human
resources (d) Natural resources, capital resources, foreign resources
33. What is GDP?
(a) Value of product in financial year.
(b) Value of product in financial year within country
(c) Total consumption and income in a financial year within country
(d) It includes import and export
34. How real GDP is calculated?
(a) Constant price (b) Current Price (c) Cost plus price (d) mark-up
price
35. WTO superseded which organization?
(a) International Trade Organization
(b) General Agreement on Tariff and Trade
(c) General Agreement on Trade and services
(d) International Chamber of Commerce
36. Union budget of India is presented in which month?
(a) January (b) March
(c) February (d) April
37. How many countries are the member of WTO in present?
(a) 23 (b) 130
(c) 160 (d) 159
38. What is factor cost?
(a) MP – Indirect tax + Subsidies (b) MP + Indirect tax + Subsidies
(c) MP + Indirect tax – Subsidies (d) MP – Indirect tax – Subsidies
39. What is market price?
(a) FC + Indirect tax – Subsidies (b) FC + Indirect tax + Subsidies
(c) FC – Indirect tax – Subsidies (d) FC – Indirect tax + Subsidies
40. In which year Indian economy introduced LPG policy?
(a) 1990 (b) 1991

(c) 1947 (d) 2001
41. When GATT was established?
(a) 1945 (b) 1995
(c) 1947 (d) 1950
42. How many countries were the member when GATT was established?
(a) 19 (b) 23
(c) 123 (d) 69
43. Who is the director general of
WTO?
(a) Barak Obama (b) Roberto Azevedo
(c) Pascal Lamy (d) Ban ki Moon
44. Who presents union budget in India?
(a) Prime Minister (b) Home Minister
(c) Commerce Minister (d) Finance Minister
45. Revenue account of budget does not consists of ____________.
(a) Exports (b) Direct Tax
(c) FDI (d) Indirect Tax
46. Capital account of budget
includes
(a) Exports Income (b) Direct Tax
(c) Indirect Tax (d) FDI
48. Revenue deficit is defined as
(a) Expenditure – Income
(b) Income – Expenditure
(c) Planned revenue – Achieved revenue
(d) Planned Revenue – Planned Expenditure
49. Fiscal deficit is defined as
(a) Expenditure > Income (b) Income > Expenditure
(c) Cost > Profit (d) Income = Expenditure
50. Which among the following is not the part of non-planned expenditure of budget?
(a) Interest Payments (b) Rural Development
(c) Subsidies (d) Wages & Salary
51. Which is not the part of planned expenditure of budget?
(a) Electricity Generation (b) Rural Development
(c) Subsidies (d) Road Construction
1. (b) 11. (c) 21. (c) 31. (a) 41. (c)
2. (c) 12. (c) 22. (c) 32. (c) 42. (b)
3. (d) 13. (c) 23. (b) 33. (b) 43. (b)
4. (c) 14. (b) 24. (b) 34. (a) 44. (d)
5. (a) 15. (a) 25. (d) 35. (b) 45. (c)
6. (c) 16. (b) 26. (b) 36. (c) 46. (d)
7. (d) 17. (a) 27. (a) 37. (c) 47. (c)
8. (a) 18. (d) 28. (d) 38. (a) 48. (a)
9. (d) 19. (a) 29. (a) 39. (a) 49. (b)
10. (b) 20. (a) 30. (d) 40. (b) 50. (c)

103 – ECONOMIC ANALYSIS FOR BUSINESS DECISIONS.
a. Social b. Political c. Natural d. Physical
2. ------ defined economics as a study of mankind in the ordinary business of life.

a. Adam smith b. Lionel Robbins c. Samuelson d. Alfred Marshall

a. Marshall b. J. M. Keynes c. Adam Smith d. Karl Marx
4. Economic profit refers to ------------ minus all relevant costs, both explicit and implicit.
a. Profit b. Cost c. Expenses d. Revenues.
5. ----------------- focuses on the behavior of the individual actors on the economic stage, that is,
firms and individuals and their interaction in markets.
a. Macroeconomics b. Microeconomics c. Managerial Economics d. Economics
activity.

a. The behavior of firms. b. Economic aggregates.
c. The behavior of the electronics industry. d. The activities of individual units.
d. The additional benefit of buying an additional unit of a product.

a. The richest 10 per cent of the population has had a bigger percentage increase in incomes over
the past 10 years than the poorest 10 per cent.
b. The proportion of people's income paid in taxes is higher under this government than under
the previous one.
d. Inequality in the distribution of income is a more serious problem than unemployment.
a. Law of Demand. b. Law of Supply. c. Law of Diminishing Marginal Utility. D. None of

above
11. The branch of economics wherein mathematics and statistics are used to measure and analyze
economics activities is called……………..
a. Applied Economics b. Econometrics c. Statistics d. Macro Economics

a. Opportunity b. Marginal c. Total d. Historical

a. Production b. Consumption c. Exchange d. All of the above

d. None of these

a. U = S (S,M,I) b. U = S (S,M) c. U = f (S,M,I) d. U = F(S,M,I)


a. Labour b. Land c. Money d. Capital
a. "Environment." b. "One who participates in a market."
c. "One who manages a household." d. "Conservation.”


d. The mathematical calculations firms make to determine production

a. Karl Marx. b. Frank Knight. c. Joseph Schumpeter. d. Adam Smith.

a. Calculated by subtracting implicit costs of using owner-supplied resources from the firm's
total revenue.
b. a theoretical measure of a firm's performance and has little value in real world decision
making.
c. Generally larger than accounting profit. d. Negative when costs exceed revenues.
23. “Economics is the science, which studies human behaviours as a relationship between ends
and scarce means which have alternative uses.” This definition of Economics is given by,
a. Lord Robbins b. Samuelson c. Alfred Marshal d. Adam Smith
24. Money is
a. Backed by gold in Fort Knox b. The same as income.

a. The accounting cost minus the marginal benefit. b. The highest-valued alternative forgone.
c. The monetary costs of an activity. d. The accounting cost minus the marginal cost

27. Managerial Economics is

a. Dealing only micro aspects b. Only a normative science
c. Deals with practical aspects d. All of the above
28. ______________ demand forecasting is related to the business conditions prevailing in the
economy as a whole
a. Macro level b. Micro level c. Firm Level d. None of these
29. ______________ is the base of marketing planning

a. Demand Estimation b. Demand analysis c. Demand function d. Demand forecasting
30. ______________ is the change in total revenue irrespective of changes in price or due to the
effect of managerial decision on revenue
a. Average revenue b. Total revenue c. Marginal revenue d. Incremental revenue
31. Perfect competition is characterized by

a. large number of buyers and sellers b. homogeneous product
c. free entry and exit of firms d. all of the above
32. The distinction between variable cost and fixed cost is relevant only in
a. long period b. short period c. medium term d. mixed period
33. Purposes of Short term Demand forecasting doesn’t includes;

a. Making a suitable production policy.
b. To reduce the cost of purchasing raw materials and to control inventory.
c. Deciding suitable price policy
d. Planning of a new unit or expansion of existing unit
34. In ______________ approach, the demand for new product is estimated on the basis demand
of existing product
a. Growth curve approach
b. Evolutionary approach.
c. Opinion polling approach
d. Vicarious approach.
35. ______________ Method is also known as Sales-Force – Composite method or collective

opinion method
a. Opinion survey
b. Expert opinion
c. Delphi method
d. Consumer interview method
36. Psychological pricing is also called as;

a. Penetration pricing
b. Skimming pricing
c. Odd pricing
d. None of these
37. In the case of ______________ a small change in price leads to very big change in quantity
demanded
a. Perfectly elastic demand
b. Perfectly inelastic demand
c. Relative elastic demand
d. Unit elastic demand
38. In ______________ approach, on the basis of the growth of an established product, the
demand for the new product is estimated
a. Growth curve approach
b. Evolutionary approach.
c. Opinion polling approach
d. vicarious approach
39. Which one of the following is not a reason for adopting penetration price strategy
a. Product has high price elasticity in the initial stage.
b. The product is accepted by large number of customers.
c. Economies of large scale production available to firm
d. When the buyers are not able to compare the value and utility
40. Car and petrol are
a. Complimentary goods
b. Substitute goods
c. Supplementary goods
d. Reserve goods
41. Cost plus pricing is also called

a. margin pricing
b. full cost pricing
c. mark up pricing
d. all the above
42. The architect of the theory of monopolistic competition

a. Rosenstein Roden
b. JR Hicks
c. Karl Marx
d. Chamberlin
43. The short run production function is called;

a. Returns to scale
b. law of variable proportion
c. Production possibility frontier
d. None of these
44. Which are the characteristics of monopoly?

a. Single seller or producer
b. No close substitutes
c. Inelastic demand curve
d. All of these
45. 13th Finance Commission has been constituted under the chairmanship of:
a. C.Rangarajan
b. Vijay L Kelkar
c. Deepak Parekh
d. Indira Bhargara
46. Want satisfying power of commodity is called

a. Demand
b. Utility
c. Satisfaction
d. Consumption
47. The firm charges price in tune with the industry’s price is called
a. competitive pricing
b. going rate pricing
c. tune pricing
d. target pricing
48. The marginal revenue equation can be derived from the:
a. Demand equation
b. Supply equation
c. Cost equation
d. Price equation
49. Functional relationship between input and output known as

a. Conversion
b. Production function
c. Work in progress
d. Output function
50. In economics ______________ means 'a state of rest 'or 'stability'

a. Depression
b. Equilibrium
c. Maturity
d. Growth
51. Which is the reason of skimming price?

a. Inelastic demand
b. Diversion of market
c. Safer price policy
d. All of these
52. Which one of the following is not an internal factor influencing pricing policy
a. cost
b. objectives
c. marketing mix
d. demand
53. Fixing high price during the introduction is called

a. skimming
b. penetrating
c. full cost pricing
d. target pricing
54. ______________ is situation of severely falling prices and lowest level of economic
activities
a. Boom
b. Recovery
c. Recession
d. Depression
55. Which one of the following is an internal factor influencing pricing

a. demand
b. competition
c. distribution channel
d. product life cycle
56. Under oligopoly a single seller cannot influence significantly
a. market price
b. quantity supplied
c. advertisement cost
d. all the above
57. ______________= R2-R1/Q2-Q1

a. Average revenue
b. Total revenue
c. Marginal revenue
d. Incremental revenue
58. If the commodities are complimentary, cross elasticity will be

a. Negative
b. Positive
c. Zero
d. Any of the above
59. In the oligopoly market there are

a. large no. of firms
b. a few firms
c. a single firm
d. an infinite no. of firms
60. The law of diminishing returns applies more to

a. agriculture
b. industry
c. services
d. commerce
61. The condition for the long run equilibrium of a perfectly competitive firm
a. Price=MC=AC
b. Price=TC
c. MC=AVC
d. MC=MR
62. The properties of indifference curves are:

a. Indifference curve slops downwards from left to right
b. Convex to the point of origin
c. Two indifference curve never cut each other
d. All of these
63. Marginal revenue is ______________ at the quantity that generate maximum total revenue
and negative beyond that point.
a. Zero
b. One
c. +1
d. −1
64. In business cycle concept, the period of "long wave" is of;

a. 25 years
b. 50 years
c. 100 years
d. 200 years
65. Which is the feature of perfect competition?

a. Large number of buyers and sellers
b. Freedom of entry and exit
c. Normal profit in the long run
d. All of these
66. The concept of monopsony was invented by:

a. Marshall
b. AP. Learner
c. Chamberlin
d. Mrs. J. Robinson
67. In business cycle concept, the period (approximately) of "Kit chin cycle" is of:
a. 5 years
b. 10 months
c. 2 years
d. 4 months
68. Which factors is/are influencing price policy?

a. Cost of product
b. Time factor
c. Government policy
d. All of these
69. The no. of firms under oligopoly is

a. 1
b. 2
c. many
d. few
70. A graph indicating different combination of inputs with different level of output is called
a. Iso-cost map
b. BEP map
c. Input-output map
d. Iso-quant map
71. Which of the following is a short run law?

a. Law of constant return to scale
b. Law of increasing return to scale
c. Law of diminishing return
d. None of these
72. Related to production function, MRTS stand for;
a. Marginal revenue and total sales
b. Minimum revenue from total sales
c. Marginal rate of total supply
d. Marginal rate of technical substitution
73. Price discrimination occurs when variation in prices for a product in different markets does
not reflect variation?
a. Costs
b. Price
c. Demand
d. None of these
74. A firm that is the sole seller of a product without close substitutes called:
a. Monopoly
b. Oligopoly
c. Competition
d. Bureaucracy
75. Where boom ends, ______________ starts

a. Recovery
b. Recession
c. Progress
d. Depression
76. "A rupee tomorrow is worth less than a rupee today" relates to
a. Opportunity cost principle
b. Discounting principle
c. Equi‐marginal principle
d. None of these
77. ______________ principle is closely related to the marginal costs and marginal revenue of
economic theory
a. Principle of time perspective
b. Equi‐marginal principle
c. Incremental principle
d. None of these
78. The Giffen goods are ______________ Goods

a. Inferior goods
b. Superior goods
c. Related goods
d. Same goods
79. Demand =Desires+ ______________ + willingness to pay

a. Supply
b. utility
c. Want
d. Purchasing power
80. The author of the book "The General Theory of Employment, Interest and Money"
a. Alfred Marshall
b. Adam Smith
c. J M Keynes
d. A C Pigou
81. Who is regarded as a father of Business Economics

a. Joel Dean
b. Adam Smith
c. J M Keynes
d. Ragnar Frisch
82. Automatic fiscal stabilizers

a. Keep the federal budget balanced
b. Keep the federal high employment budget balanced
c. Help to reduce the severity of recessions and inflationary boom periods
d. Increases structural deficits over the business cycle
83. A usual assumption in real business cycle models is that the economy is populated by a group
of identical individuals and the behavior of the group can then be explained in terms of the
behavior of one individual, called a _____________________
a. Maximizing agent
b. Representative agent
c. Republican agent
d. Informative agent
e. Democratic agent
84. Which of the following statements are correct? According to real business cycle theory,
a. The desirable monetary policy would appear to be one that results in a slow steady
growth in the money supply and, thus stable prices.
b. There is some role for activist monetary stabilization policy of a Keynesian type
c. Changes in aggregate demand cannot impact output
d. Both a and c
85. An example of negative productivity shocks that could cause recessions is

a. A hurricane which destroys capital
b. A decrease in the price of oil
c. Reductions in defense spending
d. Both a and b
86. Which of the following statements are correct

a. Real business cycle theorists remain convinced that the business cycle can be explained
as an equilibrium phenomenon
b. According to real business cycle theorists fluctuations in output come as optimizing
agents respond to real shocks that affect production possibilities
c. Real business cycle theorists consider policies to prevent fluctuations in output
unnecessary
d. All of the above
87. Who gave the first scientific treatment of general equilibrium analysis?
a. Leon Walras c. J.B Say
b. Edward Chamberlain d. K.E Boulding
88. Which of the following is a better measure of economic development?

a. National income
b. Rural consumption
c. Size of exports
d. Employment
89. Direct control refers to:

a. Trade and exchange controls
b. Interference with the operation of the market forces
c. Price and wage controls
d. All of these
90. The income consumption curve generally?

a. Slopes upwards to the right
b. Slopes downwards to the right
c. Slopes upwards to the left
d. Slopes downwards to the left
91. Which of the following shocks have been emphasized most often with respect to real
business cycle story?
a. Shocks to technology
b. Variations in environmental conditions
c. Changes in the real(relative) prices of imported raw materials
d. Changes in tax rates
92. In real business cycle models, business cycles are caused by _________________, while in
new Keynesian model business cycles are caused by _________________
a. Aggregate demand ; Aggregate demand
b. Aggregate demand ; Aggregate supply
c. Aggregate supply; Aggregate demand
d. Fiscal policy ; monetary policy
93. Advocates of real business cycle theories argue that all of the following could cause a
recession except
a. A fall in consumer expectations c. Natural disasters
b. Higher taxation d. Increase in the price of oil
94. Many economists who accept the real business cycle explanations of economic fluctuations
a. Believe that the Sharpe rise in the relative price of imported oil was the central
cause of the deep recession in the United States in the mid-1970s
b. Believe that the restrictive Federal reserve Monetary policy was the central cause of the
deep recession in the United States in the mid-1970s
c. Believe that the Sharpe rise in the relative price of imported oil was not the main cause of
the deep recession in the United States in the mid-1970s
95. The five year plan in India are launched after the approval of
a. The President and Prime Minister
b. The Rajya Sabha
c. The National Development Council (NDC)
d. The Lok Sabha
96. Real business cycle proponents argue that

a. Recessions are caused by movements of output away from the natural rate of output
b. Prices and wages are sticky
c. Macroeconomics should be based on the same assumptions as microeconomics
d. Monetary policy is important in determining recessions
97. In real business cycle models and new classical models

a. Monetary factors are responsible for fluctuations in output and employment
b. Changes in unemployment are involuntary
c. Markets always clear
d. Prices and wages are perfectly flexible
98. The real business cycle theory and the new classical theory agree that
a. Business cycles are driven by changes in Aggregate demand
b. Expectations are formed rationally
c. Imperfect information plays a big role in business cycles
99. The aggregate production function for real business cycle models is shown as
a. Yt=F(Kt,Nt)
b. Yt= Zt F(Kt - Nt)
c. Yt= Zt F(Kt,Nt)
d. Yt=Zt / (Kt,Nt)
100. According to the real business cycle theory business cycles

a. Can be eliminated with appropriate monetary and fiscal policy
b. Are natural and efficient reactions to changes in productivity
c. Do not occur
d. Occur infrequently
VIM102 Name : ______________________________________________________
Marks: 539 Roll No : ______________________________________________________
Duration: 20.0 Minutes Total : ______________________________________________________
Date : ______________________ Signature : ______________________
Q1) Macroeconomics provides an exploration to the functioning of an economy in Marks : 1.0
Id: 38752
1) General 2) Particular
3) Partial 4) Global
Explanation:
Q2) cost measures the sacrifice made for taking a decision Marks : 1.0
Id: 44833
1) Opportunity cost 2) Marginal cost
3) Average cost 4) Economic cost
Explanation:
Q3) Which of the following is incorrect? Marks : 1.0
Id: 44908
1) Perfectly elastic – E= ∞ 2) perfectly inelastic E= 1
3) unitary inelastic E = 1 4) relatively inelastic E < 1
Explanation:
Q4) If marginal cost equals to average total cost Marks : 1.0
Id: 44963
1) Average total cost is falling 2) Average total cost is rising
3) Average total cost is maximized 4) Average total cost is minimized
Explanation:
Q5) In the short period the national income is determined by Marks : 1.0
Id: 45120
1) Aggregate demand and price 2) Aggregate supply and price
3) Aggregate demand and aggregate supply 4) Aggregate Demand only
Explanation:
Q6) EBIT or Operating profit equals Marks : 1.0
Id: 45090
1) Sales revenue + cost of goods sold + all 2) Sales revenue cost of goods sold + all
expenses except for interest and taxes expenses except for interest and taxes
3) Sales revenue all expenses except for 4) Sales revenue cost of goods sold + all
interest and taxes expenses with interest and taxes
Explanation:
Q7) Economists make assumptions Marks : 1.0
Id: 45142
1) To diminish the chance of wrong answers. 2) To make certain that all necessary variables
are included.
3) Because all scientists make assumptions. 4) To make the world easier to understand.
Explanation:
Q8) Kinked demand curve is the characteristic of – Marks : 1.0
Id: 44973
1) Oligopoly 2) Monopoly
3) Perfect competition 4) Monopolistic competition
Explanation:
Q9) According to Robbins economics is Marks : 1.0
Id: 38772
1) Positive and ethical science 2) Positive and unethical science
3) Normative and ethical science 4) Normative and unethical science
Explanation:
Q10) Quantity demanded is always expressed at a given – Marks : 1.0
Id: 44887
1) Income 2) Price
3) Value 4) Supply
Explanation:
Q11) Scarcity is a condition that exists when: Marks : 1.0
Id: 45017
1) there is a fixed supply of resources. 2) there is a large demand for a product.
3) resources are not able to meet the entire 4) the supply is equal to demand.
demand for a product.
Explanation:
Q12) Monopoly firm , in long run earn Marks : 1.0
Id: 38796
1) Normal profit 2) Abnormal profit
3) Normal loss 4) Abnormal loss
Explanation:
Q13) Under method of forecasting firm can obtain the information from door to Marks : 1.0
door survey Id: 44933
1) Consumers survey 2) Complete enumeration survey
3) Delphi technique 4) Sample survey
Explanation:
Q14) A firm under has a regular tendency to show excess capacity Marks : 1.0
Id: 44982
1) Oligopoly 2) Duopoly
Explanation:
Q15) The period of 12th five year plan is Marks : 1.0
Id: 44881
1) 20122017 2) 20122016
3) 20102015 4) 20072012
Explanation:
Q16) The government wants to reduce the consumption of electricity by 5%. The price Marks : 1.0
elasticity of demand for electricity is 0.4. The government should Id: 38763
1) raise the price of electricity by .08%. 2) lower the price of electricity by .4%.
3) raise the price of electricity by 12.5%. 4) raise the price of electricity by 2%.
Explanation:
Q17) If anything flowing from the circular flow is termed as Marks : 1.0
Id: 38759
1) Leakage 2) Injection
3) Flowing 4) Flying
Explanation:
Q18) Money is: Marks : 1.0
Id: 45125
1) Consumer good 2) Capital good
3) Producer good 4) Neither of them
Explanation:
Q19) The basis of micro economic is Marks : 1.0
Id: 44830
1) Price mechanism 2) Full employment
3) National income 4) Price stability
Explanation:
Q20) How prices are determined in the free market? Marks : 1.0
Id: 38792
1) With the help of demand and supply 2) Price and supply
3) Supply and price 4) Managers
Explanation:
Q21) When people have very little time to respond to price changes, demand becomes: Marks : 1.0
Id: 45183
1) More elastic 2) Less elastic
3) Unitary elastic 4) Time does not affect price elasticity
Explanation:
Q22) In case of increase in demand, the demand curve : Marks : 1.0
Id: 45180
1) Shifts leftwards. 2) Shifts rightwards.
3) Will have upward slope 4) Will be horizontal.
Explanation:
Q23) In free enterprise economy basic economic problems are solved with the help of Marks : 1.0
Id: 44837
1) Price mechanism 2) Demand and supply interaction
3) Government 4) Central planning department
Explanation:
Q24) Due to a scarcity of resources, Marks : 1.0
Id: 45139
1) Every society must undertake central planning 2) The government must decide how to allocate
available resources
3) Some members of each society must live in 4) Every society must choose among competing
poverty uses of available resources
Explanation:
Q25) The elasticity of supply is defined as the responsiveness of the quantity supplied of a Marks : 1.0
goods to a change in Id: 44949
1) One of the variable factor on which supply 2) Its income
depends
3) Its price
4) Its cost
Explanation:
Q26) Cross elasticity in monopoly is – Marks : 1.0
Id: 44990
1) One 2) Positive
3) Zero 4) Negative
Explanation:
Q27) In India duopoly exists in the following industry: Marks : 1.0
Id: 45235
1) Heavy Commercial Vehicles 2) Soft Drinks
3) Oral Care Products 4) Detergents
Explanation:
Q28) Which one of the following would be an example of market failure requiring Marks : 1.0
government interference? Id: 45024
1) Competition among businesses drives down 2) Negative externalities are generated by
the price of calculators so low that many business production polluting the
producers go bankrupt environment.
3) Mr. Bhati is offered 50 million per year to play 4) Consumers are influenced by advertising
basketball. convincing them to buy products they do not
need.
Explanation:
Q29)
is the example of mixed economy Marks : 1.0
Id: 44838
1) India 2) USA
3) UK 4) Erstwhile USSR
Explanation:
Q30) If the demand curve is parallel to x axis, then elasticity of demand is Marks : 1.0
Id: 44941
1) Zero 2) One
3) Infinite 4) Greater than one
Explanation:
Q31) Infinite price elasticity is the characteristic of – Marks : 1.0
Id: 44976
1) Perfect competition 2) Monopoly
Explanation:
Q32) The profit which the firm must earn if they are remain in the industry is called Marks : 1.0
Id: 45119
1) Marginal profit 2) Normal profit
3) Equi marginal profit 4) Dividend Procuring
Explanation:
Q33) Which of the alternatives to the modern theory of the firm holds that managers Marks : 1.0
attempt to meet some goal that is defined in terms of a specified level of sales, Id: 45156
profits, growth or market share?
1) Sales maximization model 2) Management utility maximization model
3) Satisficing model 4) Profit maximization model
Explanation:
Q34) Under inductive method the logic proceed from Marks : 1.0
Id: 44872
1) General to particular 2) Positive to normative
3) Normative to positive 4) Particular to general
Explanation:
Q35) Microeconomics is concerned with: Marks : 1.0
Id: 45131
1) The economy as a whole 2) The electronics industry
3) The study of individual economic behavior 4) The interactions within the entire economy
Explanation:
Q36) If the crossprice elasticity between two goods is negative, the two goods are likely Marks : 1.0
to be: Id: 45212
1) Substitutes 2) Complements
3) Necessities 4) Luxuries
Explanation:
Q37) Demand for a normal product may shift outwards if: Marks : 1.0
Id: 45227
1) Price decreases 2) The price of a substitute rises
3) The price of a complement rises 4) Income falls
Explanation:
Q38) In a free market economy, when consumers increase their purchase of a good and Marks : 1.0
the level of exceeds then price tends to rise. Id: 44873
1) Demand, supply 2) Supply, demand
3) Prices, demand 4) Profits, supply
Explanation:
Q39) Which statement is true of the basic economic problem? Marks : 1.0
Id: 45086
1) The problem will exist as long as resources 2) The problem exists only in less developed
are limited and desires are Unlimited. countries.
3) The problem will disappear as production 4) The advancement of technology will cause the
expands. problem to disappear
Explanation:
Q40) Economic cost = cost+ cost. Marks : 1.0
Id: 44846
1) Accounting , Explicit 2) Implicit , explicit
3) Accounting, outlay 4) Explicit, imputed
Explanation:
Q41) Market with one buyer and one seller is called Marks : 1.0
Id: 45000
1) Monospony 2) Monopoly
3) Bilateral monopoly 4) None
Explanation:
Q42) Which of the following cost is not recorded in the books of account? Marks : 1.0
Id: 44834
1) Direct cost 2) Indirect cost
3) Opportunity cost 4) Explicit cost
Explanation:
Q43) Marginal revenue is equal to price for which one of the following types of market Marks : 1.0
structure? Id: 45246
1) Monopoly 2) Perfect Competition
3) Monopolistic 4) Oligopoly
Explanation:
Q44) Err:509 Marks : 1.0
Id: 44816
1) GAAT 2) IMF
3) IBRD 4) None of These
Explanation:
Q45) Which among the followings means the cost of foregone opportunities? Marks : 1.0
Id: 38747
1) Discounting Principle 2) Opportunity Cost
3) Inventory Management 4) Principle of Time Perspective
Explanation:
Q46) is the probable measurement of uncertainty Marks : 1.0
Id: 44835
3) Risk 4) Insurance
Explanation:
Q47) Demand for a commodity is defined as Marks : 1.0
Id: 45218
1) Want for the commodity 2) Quantity demanded for a particular commodity
backed by willingness to pay.
3) Desire for the commodity 4) Quantity demanded
Explanation:
Q48) The Law of Supply states that when the price of a commodity rises, the quantity Marks : 1.0
supplied . Id: 45202
1) Rises. 2) Falls.
3) Does not rise. 4) Does not fall
Explanation:
Q49) Managerial economics basically Marks : 1.0
Id: 38736
1) Positive Economics 2) Normative Economics
3) Positive and Normative both 4) Negative Economics
Explanation:
Q50) Homogeneity of the product is a characteristic feature of Marks : 1.0
Id: 45217
1) Monopoly 2) Perfect competition
3) Monopolistic competition 4) Oligopoly
Explanation:
Q51) The coordinating mechanism in the economy of the price system was described by Marks : 1.0
Adam Smith as : Id: 45016
1) Visible hand 2) Invisible hand
3) Total Revenue 4) Profits
Explanation:
Q52) Full form of FDI is Marks : 1.0
Id: 44879
1) Fast direct investment 2) Foreign direct investment
3) Foreign division in India 4) Food direct Investment
Explanation:
Q53) Under perfect competition, price of the product Marks : 1.0
Id: 45002
1) Can be controlled 2) Cannot be controlled
3) Can be controlled with in certain limit 4) Controlled by firm only
Explanation:
Q54) The value of elasticity of demand ranges from Marks : 1.0
Id: 45280
1) Zero to one 2) One to infinity
3) Always zero 4) Zero to infinity
Explanation:
Q55) Efficient allocation of resources is likely to be achieved under Marks : 1.0
Id: 44995
1) Monopoly 2) Monopolistic competition
3) Perfect competition 4) Oligopoly
Explanation:
Q56) The most basic assumption upon which the foundation of economics is based is that Marks : 1.0
Id: 45075
1) continued technological improvement is 2) private ownership of resources is necessary
necessary to stimulate essential economic for maximum economic growth
growth.
3) the market system is the best of all possible
production systems
4) society's resources are limited and unable to
satisfy unlimited wants
Explanation:
Q57) Economics is Marks : 1.0
Id: 44818
1) Science 2) Art
3) Both a and b 4) None of these
Explanation:
Q58) Price elasticity of cigarette is Marks : 1.0
Id: 44914
1) Less than one 2) More than one
3) One 4) Relatively elastic
Explanation:
Q59) Value maximization theory fails to address the problem of: Marks : 1.0
Id: 45161
1) Risk 2) Uncertainty
3) Sluggish growth 4) Selfserving management
Explanation:
Q60) Which of the following curve is horizontal? Marks : 1.0
Id: 44960
1) Variable cost 2) Fixed cost
3) Marginal cost 4) Total cost
Explanation:
Q61) Interdependencies is the feature of Marks : 1.0
Id: 45164
Explanation:
Q62) As per law of demand the relationship between price and demand is Marks : 1.0
Id: 45213
1) Direct. 2) positive.
3) Proportionate. 4) Inverse.
Explanation:
Q63) If consumer always spend 15% of their income on foods, then income elasticity of Marks : 1.0
demand for food is Id: 38768
1) 1.15 2) 0.15
3) 1 4) Impossible to determine
Explanation:
Q64) If labour has less elastic demand than capital, wages would be ______ than interest Marks : 1.0
Id: 45251
1) Less 2) More
3) Equal 4) None
Explanation:
Q65) Economic problem arises mainly due to specific reasons Marks : 1.0
Id: 45107
1) Human wants are unlimited and to satisfy 2) Human wants only
human wants are scarce
3) Enormous raising population only
4) Unlimited mobility of workers
Explanation:
Q66) Economic progress Marks : 1.0
Id: 45122
1) Reflects that people are achieving higher 2) Requires that individuals work longer hours.
income levels and living _x000D_ standards.
3) Implies scarcity is no longer a problem.
4) Indicates income levels are higher even
though environmental and health _x000D_
conditions have worsened.
Explanation:
Q67) The sensitivity of the change in quantity demanded to a change in price is called Marks : 1.0
Id: 38778
1) Income elasticity. 2) Crosselasticity. Price elasticity of demand.
Coefficient of elasticity.
3) Price elasticity of demand. 4) Coefficient of elasticity.
Explanation:
Q68) The scarcity or scientific or choice making definition of economics is stated by Marks : 1.0
Id: 44821
1) Adam smith 2) Samuelson
3) Robbins 4) Scumpeter
Explanation:
Q69) Income elasticity of demand for diamonds would be : Marks : 1.0
Id: 45252
1) 1 2) 0
3) >1 4) <1
Explanation:
Q70) Opportunity cost of machine producing only one product is Marks : 1.0
Id: 45282
1) Low 2) High
3) Infinite 4) Medium
Explanation:
Q71) Opportunity cost is best defined as: Marks : 1.0
Id: 45066
1) How an economy suffers when in recession? 2) The cost of decision expressed as next best
alternative
3) The cost of decision expressed in monetary 4) The financial costs association with the
terms production of goods and services.
Explanation:
Q72) A firm operating under conditions of perfect competition can: Marks : 1.0
Id: 45181
1) Determine the price of its product. 2) Promote the sales through effective
advertisement.
3) Determine only the size of its output. 4) Capture the market by cutting down the price.
Explanation:
Q73) In which type of economy can each producer allocate his resources based on the Marks : 1.0
demand? Id: 45020
1) Mixed economy 2) Market economy
3) Command economy 4) Regulated economy
Explanation:
Q74) Suppose a firm is selling 5 units of the output at the price of Rs.15 per unit. Now if it Marks : 1.0
wants to sell 6 units instead of 5 units and there by the price of the product falls to Id: 38801
Rs.14 then the marginal revenue will be
1) 14 2) 10
3) 15 4) 9
Explanation:
Q75) The study of agreements of economy is done through: Marks : 1.0
Id: 45117
1) Micro Economics 2) Macro Economics
3) Not Micro but with Macro 4) Theory of population
Explanation:
Q76) If two goods are perfect substitutes for each other , the cross elasticity between them Marks : 1.0
is – Id: 44921
1) Infinite 2) Zero
3) Positive 4) Negative
Explanation:
Q77) A business is said to be making _______ if its revenues exceed the accounting cost Marks : 1.0
Id: 45097
1) An Accounting Profit 2) A Normal Profit
3) An Economic Profit 4) An Abnormal profit
Explanation:
Q78) Which is the method of measuring GDP? Marks : 1.0
Id: 45079
1) Income method 2) Productivity method
3) Product persuasion method 4) Cumulative method
Explanation:
Q79) The discrimination pricing that attempts to take away the entire consumer surplus is Marks : 1.0
called degree price discrimination. Id: 44998
1) First 2) Second
3) Third 4) Fourth
Explanation:
Q80) Which among the following are known as the features of monopoly? Marks : 1.0
Id: 38794
1) Large number of buyers 2) Large number of sellers
3) Single seller 4) Price taker
Explanation:
Q81) Which of the following is the example of complementary goods? Marks : 1.0
Id: 44890
1) Tea and coffee 2) Tea and sugar
3) Ball pen and ink pen 4) Shoes and gold
Explanation:
Q82) In perfect competitive industries are Marks : 1.0
Id: 38790
1) Price taker 2) Price maker
3) Price determinate 4) Price regulator
Explanation:
Q83) Profit is the motive of – Marks : 1.0
Id: 44839
1) Mixed economy 2) Socialistic economy
3) Capitalistic economy 4) Centrally planned economy
Explanation:
Q84) Marginal cost change due to change in Marks : 1.0
Id: 44961
1) Total cost 2) Average cost
3) Variable cost 4) Quantity of output
Explanation:
Q85) Inequality of income is the characteristic of – Marks : 1.0
Id: 44841
1) Capitalist economy 2) Socialistic economy
3) Mixed economy 4) Planning economy
Explanation:
Q86) Suppose a firm decides to increase its output. This may involve a rise in its total cost Marks : 1.0
by 30% and with an increase in output by 15% , then incremental cost is Id: 44869
1) 2% 2) 3%
3) ½ % 4) None of these
Explanation:
Q87) _________ is the study of economic actions of individuals and small groups of Marks : 1.0
individuals. Id: 45037
1) MicroEconomics 2) MacroEconomics
3) Managerial Economics 4) Business Economics
Explanation:
Q88) Economists who are concerned about the behavior of individual households, firms Marks : 1.0
and industries are studying: Id: 45070
1) Nanoeconomics 2) Microeconomics
3) Macroeconomics 4) Neoeconomics
Explanation:
Q89) When consumer’s income increases, demand for an inferior good . Marks : 1.0
Id: 45170
1) Increases. 2) Decreases.
3) Does not change. 4) Changes.
Explanation:
Q90) For core food items demand is ________ _______. Marks : 1.0
Id: 45169
1) More elastic. 2) Less elastic.
3) Unitary elastic. 4) Not elastic.
Explanation:
Q91) Gross profit includes Marks : 1.0
Id: 45089
1) Overhead expenses + interest expense + taxes 2) Overhead expenses + interest expense taxes
and extraordinary items and extraordinary items
3) Overhead expenses interest expense taxes 4) Overhead expenses interest expense + taxes
Explanation:
Q92) In India to some degree perfect competition exists in the following industry: Marks : 1.0
Id: 45237
1) Cement 2) Soaps and detergents
3) Rice Farming 4) Dental Care Products
Explanation:
Q93) What type of relationship exists between the price and quantity demanded? Marks : 1.0
Id: 45260
1) Direct. 2) Inverse.
3) Positive. 4) Normative.
Explanation:
Q94) Economics includes the following economic activity Marks : 1.0
Id: 45285
1) Production 2) Consumption
3) Exchange 4) All of the above
Explanation:
Q95) NNP at market price will be – Marks : 1.0
Id: 45084
1) GNP + cost of capital 2) GNP + cash
3) GNP at market prices – depreciation 4) GNP + dividend
Explanation:
Id: 45288
Explanation:
Q97) Opportunity cost include Marks : 1.0
Id: 44870
1) Implicit cost 2) Explicit cost
3) Both a and b 4) Neither a nor b
Explanation:
Q98) According to law of demand other things being equal , if the price of commodity falls Marks : 1.0
the quantity demanded of it will………………………… Id: 44891
1) Rise 2) Decrease
3) Increase 4) Fall
Explanation:
Q99) From society's point of view, the economic function of profits and losses is to: Marks : 1.0
Id: 45032
1) Promote the equal distribution of real assets 2) Achieve full employment and price level
and wealth stability
3) Contribute to a more equal distribution of 4) Reallocate resources from less desired to
income more desired uses
Explanation:
Q100) General theory of employment, interest, and money propounded by Marks : 1.0
Id: 44862
1) Keynes 2) Marshall
3) Marx 4) Knight
Explanation:
Q101) For the price taking firm – Marks : 1.0
Id: 44971
1) MR < price 2) MR = price
3) MR > price 4) Indeterminate relation between price and MR
Explanation:
Q102) It is the difference between total revenue and total economic cost Marks : 1.0
Id: 45148
1) Accounting Profit 2) Net Profit
3) Gross Profit 4) Economic Profit
Explanation:
Q103) Which best describes a demand curve? Marks : 1.0
Id: 45225
1) The quantity consumers would like to buy in 2) The quantity consumers are willing to sell
an ideal world
3) The quantity consumers are willing and able to
buy at each and every income all other things
unchanged
buy at each and every price all other things
unchanged
Explanation:
Q104) In the case of a straight line demand curve meeting the two axes , the price elasticity Marks : 1.0
of demand at the midpoint of the line would be – Id: 44910
1) Zero 2) One
3) Greater than one 4) Less than one
Explanation:
Q105) Positive aspects of economics is concerned with Marks : 1.0
Id: 44826
1) What ought to be 2) What is
3) Ethical 4) Why economics
Explanation:
Q106) In law of demand, which is dependent and which is independent variable? Marks : 1.0
Id: 38771
1) Price is dependent demand is independent 2) Price is independent demand is dependent
variable
3) Price and demand both dependent 4) Price and demand both independent
Explanation:
Q107) The circular flow of goods and incomes show the Marks : 1.0
Id: 45138
1) Wages and salaries 2) Firms and households
3) Income and money 4) Goods and services
Explanation:
Q108) In perfectly competitive market a firm in the long run operates at Marks : 1.0
Id: 45255
1) AC=MC 2) AR=MR
3) MR=MC 4) P=AR=MR=AC=MC
Explanation:
Q109) Value judgment possible in Marks : 1.0
Id: 44828
1) Positive science 2) Normative science
3) Deductive method 4) Inductive method
Explanation:
Q110) The commodity whose demand is associated with the name of Sir Robert Giffen? Marks : 1.0
Id: 44938
1) Necessary goods 2) Luxury goods
3) Inferior goods 4) Ordinary goods
Explanation:
Q111) Unemployment means that: Marks : 1.0
Id: 38738
1) there is excess demand in the labour market. 2) at the going wage rate, there are people who
want to work but cannot find work
3) people are not willing to work at the going 4) there are some people who will not work at the
wage rate. going wage rate.
Explanation:
Q112) Which market both AR = MR? Marks : 1.0
Id: 38791
1) Competitive 2) Monopoly
Explanation:
Q113) A decrease in the supply of a good will tend to cause: Marks : 1.0
Id: 45197
1) an increase in the equilibrium price and 2) a decrease in the equilibrium price and
quantity quantity
3) a decrease in the equilibrium price and an 4) an increase in the equilibrium price and a
increase in the equilibrium quantity decrease in the equilibrium quantity
Explanation:
Q114) Graphical presentation of demand schedule Marks : 1.0
Id: 38762
1) Demand schedule 2) Demand curve
3) Demand law 4) Law of demand
Explanation:
Q115) “Economics is the enquiry into the nature and causes of wealth of nations” stated Marks : 1.0
by Id: 44822
1) Adam smith 2) Robbins
3) Amertya sen 4) Friderman
Explanation:
Q116) Cross elasticity between shoes and coldrink is – Marks : 1.0
Id: 44920
1) Infinite 2) Greater than zero
3) Greater than zero 4) Zero
Explanation:
Q117) If there is small change in price causes , an infinite change in demand, than elasticity Marks : 1.0
of demand is Id: 38780
1) Equal to zero. 2) Greater than one.
3) Less than one. 4) Equal to infinite
Explanation:
Q118) In case of monopoly, demand curve is same as Marks : 1.0
Id: 44996
1) MR curve 2) AR curve
3) AC curve 4) MC curve
Explanation:
Q119) Economic goods are goods which: Marks : 1.0
Id: 45068
1) Obey the laws of economics 2) Are scarce and limited in supply
3) Are tangible 4) Are intangible
Explanation:
Q120) The income elasticity of demand: Marks : 1.0
Id: 45184
1) is positive for an inferior good 2) is negative for a normal good
3) is negative for an inferior good 4) is zero for an inferior good
Explanation:
Q121) Income flow is also known as Marks : 1.0
Id: 44864
1) Product flow 2) Money flow
3) Profit flow 4) Cash flow
Explanation:
Q122) Variation in demand means_x000D_ _x000D_ Marks : 1.0
Id: 45287
1) Change in demand when price 2) Change in demand when price is constant
changes_x000D_ _x000D_ _x000D_
3) Change in demand when other factor changes 4) All of the above
Explanation:
Q123) The father of economics is Marks : 1.0
Id: 44819
1) Adam smith 2) Marshall
3) Keynes 4) Samuelson
Explanation:
Q124) The opportunity cost of a machine which can be produce only one product is Marks : 1.0
Id: 44866
1) Low 2) Infinite
3) One 4) Large
Explanation:
Q125) Economic profit refers to minus all relevant costs, both explicit and implicit. Marks : 1.0
Id: 45051
1) Profit 2) Cost
3) Expenses 4) Revenue
Explanation:
Q126) Law related to monopoly is – Marks : 1.0
Id: 44999
1) FERA 2) MRTP
3) IDRA 4) FEMA
Explanation:
Q127) The two basic markets shown by the simple circular flow model are Marks : 1.0
Id: 45063
1) Capital goods and consumer goods 2) Free and controlled.
3) Product and resource 4) Household and business
Explanation:
Q128) NNP equals to Marks : 1.0
Id: 45082
1) GNP – dividend 2) GNP – depreciation
3) GNP – gold 4) GNP – cost of capital
Explanation:
Q129) Identify fixed cost from the following – Marks : 1.0
Id: 44959
1) Labour cost 2) Electricity bill
3) Salary of watchman 4) Cost of raw material
Explanation:
Q130) Flows of the factor of production and the goods and services between the different Marks : 1.0
sector is Id: 44865
1) Real flow 2) Money flow
3) Cash flow 4) Product flow
Explanation:
Q131) Micro economic is considered as Marks : 1.0
Id: 44861
1) Static analysis 2) Dynamic analysis
3) Changing analysis 4) None of these
Explanation:
Q132) In a freemarket economy the allocation of resources is determined by Marks : 1.0
Id: 45060
1) Votes taken by consumers 2) A central planning authority
3) By consumer preferences 4) The level of profits of firms
Explanation:
Q133) deals with aggregate economic Marks : 1.0
Id: 44829
1) Micro economic 2) Macro economic
Explanation:
Q134) The demand curve shows Marks : 1.0
Id: 38767
1) the maximum amount consumers are willing to 2) the minimum amount consumers are willing to
pay for particular units of a good pay for particular units of a good
3) the average amount consumers are willing to 4) that consumers want to pay the lowest price
pay for particular units of a good
Explanation:
Q135) Scarcity can be avoided by making: Marks : 1.0
Id: 45069
1) needs unlimited 2) resources limited
3) wants and needs limited 4) wants unlimited
Explanation:
Q136) Cost is also known as explicit cost. Marks : 1.0
Id: 44844
1) Opportunity 2) Accounting
3) Outlay 4) Sunk
Explanation:
Q137) All of the following are the characteristic of perfect competition except Marks : 1.0
Id: 44967
1) Uniform price 2) Large no. of buyers and sellers
3) Differentiated goods 4) Absence of transport coat
Explanation:
Q138) What is the shape of demand curve faced by firm under perfect competition? Marks : 1.0
Id: 44968
1) Horizontal 2) Vertical
3) Positively sloped 4) Negatively sloped
Explanation:
Q139) Economics should be neutral between ends stated by – Marks : 1.0
Id: 44827
1) Robbins 2) Marshall
3) Pigou 4) Adam smith
Explanation:
Q140) The relationship between quantity supplied and price is _____ and the relationship Marks : 1.0
between quantity demanded and price is _____. Id: 45268
1) direct, inverse 2) inverse, direct
3) inverse, inverse 4) direct, direct
Explanation:
Q141) In a__________the decisions of a central planner are replaced by the decisions of Marks : 1.0
millions of firms and households. Id: 45101
1) Market economy 2) Business economy
3) Social economy 4) Plant economy
Explanation:
Q142) Economics is a science which deals with human wants and their satisfaction. Marks : 1.0
Id: 45052
1) Social 2) Political
3) Natural 4) Physical
Explanation:
Q143) Which Of The Following Economic Indicators Show Adverse Effect On The Stock Marks : 1.0
Market? Id: 45130
1) Low Domestic Saving 2) High Foreign Exchange Production
3) High Industrial Production 4) Low Interest Rate
Explanation:
Q144) The sensitivity of the change in quantity consumed of one product to a change in the Marks : 1.0
price of a related product is called Id: 38781
1) Crosselasticity. 2) Substitute elasticity.
3) Complementary elasticity. 4) Price elasticity of demand.
Explanation:
Q145) Law of supply states Marks : 1.0
Id: 38787
1) Inverse relation between price and demand 2) Inverse relation between price and supply
3) Direct relation between price and demand 4) Direct relation between price and supply
Explanation:
Q146) Adam Smith claims that for an economy to achieve mutual gains from voluntary Marks : 1.0
exchange it requires Id: 45023
1) consumers being considerate of their fellow 2) businesses maintaining good will in their
man business relations.
3) self interested behavior by consumers and 4) government interference with the market.
businesses.
Explanation:
Q147) A market with one seller is an example of: Marks : 1.0
Id: 45206
1) Monotony 2) Oligopoly
3) Monopoly 4) Duopoly
Explanation:
Q148) The word ‘economics’ comes from the Greek word for: Marks : 1.0
Id: 45039
1) Environment 2) One who manages a household
3) One who participates in the market 4) Conservation
Explanation:
Q149) When the price of a Giffen good falls, its quantity demanded . Marks : 1.0
Id: 45171
1) Rises. 2) Falls.
Explanation:
Q150) Select the group that best represents the basic factors of production. Marks : 1.0
Id: 45057
1) land, labor, capital, technology 2) land, natural resources, labor, capital
3) land, labor, capital, entrepreneurship 4) land, labor, money, management skills
Explanation:
Q151) Firms which engage in satisficing behavior are likely to be Marks : 1.0
Id: 45159
1) Leading firms in their industry 2) Innovative, risktakers, performing
satisfactorily
3) Conservative, riskaverse and performing 4) Growth maximizes
adequately
Explanation:
Q152) All of the following are determinants of supply EXCEPT: Marks : 1.0
Id: 45210
1) Price 2) Objectives of the firm
3) Income levels 4) Level of technology
Explanation:
Q153) Profits arise because the entrepreneurs introduce innovations stated by Marks : 1.0
Id: 44863
1) Schumpeter 2) Knight
3) Keynes 4) Robbins
Explanation:
Q154) In a free market Marks : 1.0
Id: 45134
1) Governments intervene 2) Governments plan production
3) Governments interfere 4) Prices adjust to reconcile scarcity and desires
Explanation:
Q155) Perfect competition, in long run firms earn Marks : 1.0
Id: 38795
Explanation:
Q156) Liberalization refers to Marks : 1.0
Id: 44884
1) Integration of the world economy 2) Transfer asset from public sector to private
sector
3) Relaxation of previous government restriction 4) All of these
Explanation:
Q157) SEBI stands for Marks : 1.0
Id: 44877
1) Securities and exchange board of India 2) Saving and earning board of India
3) Stock exchange board of India 4) Strategic and economic board of India
Explanation:
Q158) Rational decisionmaking under conditions of scarcity requires individuals to: Marks : 1.0
Id: 45177
1) place a monetary value on everything they do. 2) know the prices of all goods they might
possibly buy.
3) understand that they have to make choices, or 4) be constantly alert to price reductions on
tradeoffs desired products.
Explanation:
Q159) Which of the following laws states that the more a consumer consumes of a product, Marks : 1.0
the less is the utility he derives from the additional consumption? Id: 45261
1) Law of equilibriumMarginal utility. 2) Law of ordinal utility.
3) Law of cardinal utility. 4) Law of diminishing marginal utility.
Explanation:
Q160) The PrincipalAgent Problem arises when… Marks : 1.0
Id: 45031
1) The principal and the agent have different 2) The principal cannot decide whether the firm
objectives should seek to maximize the expected future
profits of the firm or maximize the price for
which the firm can be sold
3) The principal cannot enforce the contract with 4) Both a and c
the agent or finds it too costly to monitor the
agent
Explanation:
Q161) If an increase in consumer income leads to a decrease in the demand for good x, Marks : 1.0
then good x is: Id: 45196
1) a substitute 2) a complementary good
3) a inferior good 4) a normal good
Explanation:
Q162) What are the two sectors in two sector model of ‘circular flow’? Marks : 1.0
Id: 38739
1) Household sector & Business Sector 2) Household sector & Government Sector
3) Household sector & Foreign Sector 4) Household sector & Private Sector
Explanation:
Q163) If the supply of water bottled decreases , the equilibrium price and the Marks : 1.0
equilibrium quantity Id: 44952
1) Increases, decreases 2) Decreases, decreases
3) Decreases, increases 4) Increases, increases
Explanation:
Q164) What does monopolistic competition have in common with monopoly? Marks : 1.0
Id: 45277
1) Mutual interdependence 2) The ability to collude with respect to price
3) A large number of firms 4) A downwardsloping demand curve
Explanation:
Q165) Marginal utility analysis assumes: Marks : 1.0
Id: 45112
1) That utility can be measured 2) That utility cannot be quantified
3) The utility is static 4) None of the above
Explanation:
Q166) Per capita income is associated with Marks : 1.0
Id: 44831
3) Positive science 4) Mixed economy
Explanation:
Q167) The shape of demand curve in case of perfectly elastic is Marks : 1.0
Id: 44906
1) Vertical 2) Downward sloping
3) Horizontal 4) Upward sloping
Explanation:
Q168) Large no. of buyers and sellers are the characteristic of – Marks : 1.0
Id: 44977
Explanation:
Q169) Perfect competition is a market situation characterized by Marks : 1.0
Id: 45215
1) A single seller 2) Limited sellers
3) A large number of sellers 4) A few sellers
Explanation:
Q170) If the demand is more than supply , then the pressure on price will be – Marks : 1.0
Id: 44953
1) Upward 2) Downward
3) Constant 4) None of the above
Explanation:
Q171) The governor of Reserve bank of India is Marks : 1.0
Id: 44883
1) D. subbarao 2) Raghuram govind rajan
3) Bimal jalan 4) None of these
Explanation:
Q172) Elasticity is when the percentage change in quantity demanded is less Marks : 1.0
than the percentage change in price. Id: 44916
3) Greater than zero 4) Less than zero
Explanation:
Q173) Price elasticity of salt is Marks : 1.0
Id: 44907
1) Perfectly elastic 2) Unitary elastic
3) inelastic 4) relatively elastic
Explanation:
Q174) Which of the following features is NOT seen in imperfect competition? Marks : 1.0
Id: 45178
1) Product differentiation 2) Price wars
3) All goods are homogeneous 4) All goods are heterogeneous
Explanation:
Q175) RBI stands for Marks : 1.0
Id: 44876
1) Reverse bank of India 2) River bank of India
3) Reserve bank of investment 4) None of these
Explanation:
Q176) Market demand is aggregation of individual demand Marks : 1.0
Id: 38761
1) Vertically 2) Horizontally
3) Parallel 4) Diagonally
Explanation:
Q177) In perfect competitive firms are Marks : 1.0
Id: 38789
Explanation:
Q178) The interaction of individuals and firms in a market can be described as a Marks : 1.0
of money, goods and services and resources through product and factor markets. Id: 45050
1) Constant Flow 2) Stable Flow
3) Circular Flow 4) Regular Flow
Explanation:
Q179) Accounting profit is arrived at when explicit costs are subtracted from Marks : 1.0
Id: 45145
1) Total revenue 2) Explicit cost
3) Implicit cost 4) Total cost
Explanation:
Q180) With a favourable government policy towards agriculture and good monsoon Marks : 1.0
conditions, the agricultural supply will in spite of average price of agricultural Id: 45175
goods remaining constant.
1) Increase. 2) Decrease.
3) Not change. 4) Either increase or decrease
Explanation:
Q181) Which among the following is economics theory/principles? Marks : 1.0
Id: 38745
1) Law of diminishing marginal utility 2) Newton’s law
3) E= MC2 4) Theory of gravity
Explanation:
Q182) The price elasticity of demand for hamburger is – Marks : 1.0
Id: 44903
1) The change in quantity demanded of 2) The percentage increase in the quantity
hamburger when hamburger increases by 30 demanded of hamburger when the price of
paisa per rupee hamburger falls by 1 per cent per rupee
3) The increase in the price of the hamburger 4) The decrease in the quantity demanded of
when the price of hamburger falls by 10 per hamburger when the price of the hamburger
cent per rupee falls by 1 per cent per rupee
Explanation:
Q183) The "law of demand" is illustrated by a Marks : 1.0
Id: 45247
1) movement along the demand curve. 2) leftward shift of the demand curve.
3) rightward shift of the demand curve. 4) Both answers A and B are correct.
Explanation:
Q184) There is no difference between firm and industry in Marks : 1.0
Id: 44980
Explanation:
Q185) What is the ‘Economic Problem’? Marks : 1.0
Id: 45038
1) The problem that high exchange rates deter 2) Having high levels of unemployment
exports
3) Matching endless wants with limited resources
4) The fact that economies often go into
recession
Explanation:
Q186) A firm enjoys maximum control over the price of its product under Marks : 1.0
Id: 44992
3) Oligopoly 4) Monopolistic competition
Explanation:
Q187) Factors of production are Marks : 1.0
Id: 45151
1) Inputs into the production process. 2) Weather, social, and political conditions that
affect production.
3) The physical relationships between economic 4) The mathematical calculations firms make to
inputs and outputs. determine production.
Explanation:
Q188) Which of the following statements regarding elasticity of demand is TRUE? Marks : 1.0
Id: 45243
1) Elasticity always has a negative value 2) Elasticity can be positive or negative
3) Elasticity always has a positive value 4) Elasticity can never be zero
Explanation:
Q189) National income is Marks : 1.0
Id: 45077
1) The net output of commodities and services 2) The net interest
flowing during a year from the countries
productivity system
3) The dividend
4) The net depreciation
Explanation:
Q190) Inflation refers to: Marks : 1.0
Id: 45126
1) Rising Prices 2) Reduces Money Supply
3) Increased demand 4) Increased supply
Explanation:
Q191) A decrease in income should: Marks : 1.0
Id: 45228
1) Shift demand for an inferior product inwards 2) Shift demand for an inferior product outwards
3) Shift supply for an inferior product outwards 4) Shift supply for an inferior product inwards
Explanation:
Q192) Elasticity of demand is greater than 1 implies that demand is . Marks : 1.0
Id: 45221
1) Elastic. 2) Inelastic.
3) Relatively elastic. 4) Relatively inelastic.
Explanation:
Q193) Single buyer is the characteristic of – Marks : 1.0
Id: 44978
3) Duopoly 4) None of these
Explanation:
Q194) In monopolistic competition, firms achieve some degree of market power: Marks : 1.0
Id: 45186
1) Because of barriers to entry into the industry 2) Because of barriers to exit from the industry
3) By producing differentiated products 4) By virtue of size alone
Explanation:
Q195) A fall in price: Marks : 1.0
Id: 45226
1) Will cause an inward shift of demand 2) Will cause an outward shift of supply
3) Leads to a movement along a demand curve 4) Leads to a higher level of production
Explanation:
Q196) “Money is what Money does “ , was the definition of Money given by : Marks : 1.0
Id: 45124
1) Walker 2) Robbinson
3) Pigou 4) Coulborn
Explanation:
Q197) What is the nature of supply curve? Marks : 1.0
Id: 38788
1) Positive slope 2) Negative slope
3) Natural slope 4) Downward slope
Explanation:
Q198) Because of the Law of Supply, supply curves: Marks : 1.0
Id: 45209
1) slope downward. 2) slope upwards.
3) are perfectly vertical. 4) are perfectly horizontal.
Explanation:
Q199) In economics financial year is called: Marks : 1.0
Id: 45041
1) Accounting Year 2) Financial Year
3) Fiscal Year 4) Monetary Year
Explanation:
Q200) For a monopoly, marginal revenue is equal to Marks : 1.0
Id: 45194
1) The price of the product 2) The amount people buy between two prices
3) The amount people buy at a given price 4) The change in total revenue brought about by
a oneunit increase in quantity sold
Explanation:
Q201) Which one of the following is an example of an externality, a market shortcoming Marks : 1.0
which requires government interference? Id: 45026
1) A majority of Punekar are overweight because 2) Bhati gets paid more than Rs.25 million per
they have unhealthy diets. year to play basketball.
3) Excessive pollution generated by business 4) Successful advertising convinces consumers
production is damaging the environment. to buy products they cannot afford and do not
need.
Explanation:
Q202) Equilibrium refers to a market situation where Marks : 1.0
Id: 44950
1) Quantity supplied is equal to quantity 2) Quantity supplied is greater than quantity
demanded demanded
3) Quantity demanded is at its lowest point 4) Demand curve intersect the supply curve at its
lowest point.
Explanation:
Q203) Meaning of micro economics Marks : 1.0
Id: 38734
1) Study of the general output 2) Study of general employment
3) Study of employment in a particular firm 4) Study of national income
Explanation:
Q204) In perfect competition, D= 20 3pp2 and the supply curve is S= p1, where p is price, Marks : 1.0
D is demand and S is Supply, find the equilibrium price and equilibrium quantity. Id: 45165
1) 4 and 5 2) 3 and 2
3) 6 and 7 4) 5 and 4
Explanation:
Q205) The author of “ An essay on the nature and significance of economic science” – Marks : 1.0
Id: 44857
3) Robbins 4) Hicks and Allen
Explanation:
Q206) If new firms enter a monopolistically competitive market, the demand curves for the Marks : 1.0
existing firms will: Id: 45176
1) Shift to the left and become more price 2) Shift to the left and there will be no change in
inelastic price elasticity
3) Shift to the left and become more price elastic 4) Shift to the right and there will be no change in
price elasticity
Explanation:
Q207) Demand for the commodity depends on Marks : 1.0
Id: 44926
1) Price of the commodity 2) Price of the related goods
3) Income 4) All of the above
Explanation:
Q208) Which among the followings is known as the owners of factors of production in the Marks : 1.0
‘circular flow’? Id: 38740
1) Household 2) Business
3) Government 4) Foreign
Explanation:
Q209) Human wants are – Marks : 1.0
Id: 44823
1) Unlimited 2) Limited
3) Scarce 4) Fully satisfied
Explanation:
Q210) Adam smith’s wealth of nations published in Marks : 1.0
Id: 44859
1) 1776 2) 1931
3) 1808 4) 1775
Explanation:
Q211) If technology improves significantly, it will have a impact on the quantity Marks : 1.0
supplied of a commodity. Id: 45203
1) Positive. 2) Negative.
3) Small. 4) Large.
Explanation:
Q212) Robbins emphasized on – Marks : 1.0
Id: 44824
1) Normative aspect of science 2) Positive aspect of science
3) Negative aspect of science 4) Non Material aspect of science
Explanation:
Q213) Assume that in the market for goods Z there is simultaneous increase in demand and Marks : 1.0
the quantity supplied. the result will be – Id: 44956
1) An increase in equilibrium price and quantity 2) A decrease in equilibrium price and quantity
3) An increase in equilibrium quantity and price 4) Decrease in equilibrium price and quantity
remains same remains same.
Explanation:
Q214) Optimization means Marks : 1.0
Id: 38756
1) Maximization 2) Minimization
3) Maximization of profit 4) It depends, the situation, sometimes
maximization and sometimes minimization
Explanation:
Q215) What is original price of a commodity when price elasticity is 0.71 and demand Marks : 1.0
changes from 20 units to 15 units and new price is Rs. 10. Id: 38769
1) 15 2) 10
3) 8 4) 20
Explanation:
Q216) The word economics derived from – Marks : 1.0
Id: 44817
1) Greek words 2) Italian words
3) Sanskrit words 4) Spanish words
Explanation:
Q217) Product differentiation is the form of Marks : 1.0
Id: 45012
1) Price discrimination 2) Non price competition
3) Collusive oligopoly 4) Price leadership
Explanation:
Q218) The degree of is also known as concentration of economic power. Marks : 1.0
Id: 45013
Explanation:
Q219) When be Analyse the problem of economy as a whole it is a study of : Marks : 1.0
Id: 45116
3) Both Macro and Micro Economics. 4) None of these
Explanation:
Q220) There are branches of economics Marks : 1.0
Id: 44843
1) 2 2) 4
3) 5 4) 3
Explanation:
Q221) If a product is a Veblen good: Marks : 1.0
Id: 45229
1) Demand is inversely related to income 2) Demand is inversely related to price
3) Demand is directly related to price 4) Demand is inversely related to the price of
substitutes
Explanation:
Q222) Income elasticity of necessity goods Marks : 1.0
Id: 44936
3) Less than zero 4) Greater than zero
Explanation:
Q223) If AR = AC, the firm will get Marks : 1.0
Id: 44979
1) Abnormal profit 2) Normal profit
3) Loss 4) No profit no loss
Explanation:
Q224) Theory of investment is a part of – Marks : 1.0
Id: 44860
1) Micro economics 2) Price theory
3) Income theory 4) Positive science
Explanation:
Q225) The supply of a good refers to Marks : 1.0
Id: 38786
1) Actual production of the good 2) Total existing stock of the good
3) Stock available for the sale 4) Amount of the good offered for sale at a
particular price per unit of time
Explanation:
Q226) The demand for Cheerios cereal is more priceelastic than the demand for cereals as Marks : 1.0
a whole. This is best explained by the fact that: Id: 45266
1) Cheerios are a luxury. 2) . cereals are a necessity._x000D_ c.
3) there are more substitutes for Cheerios than 4) consumption of cereals as a whole is greater
for cereals as a whole. than consumption of Cheerios.
Explanation:
Q227) The Law of Supply states that as the price of a product increases: Marks : 1.0
Id: 45242
1) consumers will buy less of the product. 2) sellers will offer less of the product for sale.
3) sellers will offer more of the product for sale. 4) new buyers will enter the market because the
product appears popular.
Explanation:
Q228) The study of economic actions of individuals and small groups of individuals is Marks : 1.0
known as Id: 45284
1) Macroeconomics 2) Microeconomics
3) Both a and b 4) None of the above
Explanation:
Q229) Homogeneous or differentiated product is the feature of – Marks : 1.0
Id: 45003
Explanation:
Q230) Which of the following is a cartel? Marks : 1.0
Id: 44997
1) UNO 2) IMF
3) EEC 4) OPEC
Explanation:
Q231) Kinked demand curve is related to Marks : 1.0
Id: 38799
Explanation:
Q232) Suppose demand is expressed as QD = 300 50P. If we want to make this equation Marks : 1.0
consistent with the typical supply and demand diagram, this equation must be stated Id: 38804
as;
1) P = 300 50Q 2) P = 6 .02Q
3) P = 50 300Q 4) Q = 6 .02P
Explanation:
Q233) Fiscal year of India is recorded as: Marks : 1.0
Id: 45045
1) 1st January to 31st December 2) 1st June to 31st May
3) 1st April to 31st March 4) 1st September to 31st August
Explanation:
Q234) Principal agent problem arises because Marks : 1.0
Id: 45014
1) Objectives of principles are not met by the 2) Objectives of principles are met by the
managers managers
3) Objectives of managers are met by the agents 4) Objectives of managers are not met by the
agents
Explanation:
Q235) Negative sloped with higher elasticity demand curve is related to Marks : 1.0
Id: 44987
1) Perfect competition 2) Mopolistic competition
3) Monopoly 4) Oligopoly
Explanation:
Q236) The firm has no control over the price of the product in which of the following market Marks : 1.0
structures Id: 45279
Explanation:
Q237) Demand for a product is best defined as Marks : 1.0
Id: 45214
1) Various quantities that are demanded by 2) Total quantity of a product demanded at a
consumers particular price in the market during a given
period of time
3) Total quantity of a product demanded during a 4) Various amounts desired by consumers.
given period of time.
Explanation:
Q238) Which of the following is a barrier to entry that typically results in monopoly? Marks : 1.0
Id: 45188
1) The firm controls the entire supply of the raw 2) Production of the industry’s product is subject
material to economies of scale
3) The firm holds an exclusive government 4) Production of this product needs a large
regulation capital investment
Explanation:
Q239) Identify the factor which generally keeps the price elasticity of demand for a good Marks : 1.0
low Id: 44915
1) Variety of uses for that goods 2) Its low price
3) Close substitute for that good 4) High proportion of consumer income spent on
it
Explanation:
Q240) .__________ includes all payment paid to factors of production and opportunity cost. Marks : 1.0
Id: 45262
1) Implicit costs. 2) Explicit costs.
3) Economic costs. 4) Accounting costs.
Explanation:
Q241) The theory of Invisible hand is given by Marks : 1.0
Id: 45055
1) Samuelson 2) Peter Drucker
3) Adam Smith 4) Marshall
Explanation:
Q242) Which of the following is not a micro economic problem? Marks : 1.0
Id: 44836
1) What to produce 2) How to produce
3) For whom to produce 4) Where to produce
Explanation:
Q243) In monopolistic competition, a firm: Marks : 1.0
Id: 45232
1) Has no market power. 2) Captures significant economies of scale
3) Has a downwardsloping demand curve. 4) Has a standardized product that all firms
produce
Explanation:
Q244) The point where the total revenue line crosses the total cost line called Marks : 1.0
Id: 45211
1) Point of inflection 2) Breakeven point
3) Equilibrium point 4) Split of point
Explanation:
Q245) Economics is concerned with: Marks : 1.0
Id: 45065
1) earning as much money as possible. 2) limiting individuals' wants so that our scarce
resources will not be used up.
3) using scarce resources to satisfy virtually 4) using as many workers as possible to produce
limitless material wants and needs. any given level of output.
Explanation:
Q246) Numerical value of relatively inelastic is – Marks : 1.0
Id: 44905
1) Zero 2) Infinite
Explanation:
Q247) The upper portion of kinked demand curve is relatively Marks : 1.0
Id: 45001
1) More inelastic 2) More elastic
3) Less elastic 4) Inelastic
Explanation:
Q248) The president of 13th finance commission is Marks : 1.0
Id: 44882
1) Vijay bhatkar 2) Vijay kelkar
3) P Chidambaram 4) Manmohan singh
Explanation:
Q249) The incomes received by entrepreneurs, by labor, and by the owners of land and of Marks : 1.0
capital resources are, respectively: Id: 45074
1) rents, wages, interest and profits. 2) wages, rents, profits and interest.
3) profits, wages, rents, and interest 4) interest, rents, wages, and profits.
Explanation:
Q250) Managerial economics consists of the use of economic modes of thought to analyze Marks : 1.0
Id: 44868
business situation stated by –
1) Mansfield 2) Spencer
3) McNair and Merriam 4) Adam smith
Explanation:
Q251) Which is correct statement about GNP? Marks : 1.0
Id: 45081
1) Wages + dividend 2) Capital + Assets – depreciation
3) GNP at market price = GDP + cost of capital 4) GNP at factor cost = GNP at market price –
indirect taxes + subsidies
Explanation:
Q252) In the circularflow diagram, Marks : 1.0
Id: 45152
1) Firms are sellers in the resource market and 2) Households are sellers in the resource market
the product market.
3) Firms are buyers in the product market.
4) Spending on goods and services flow from
firms to households.
Explanation:
Q253) Which of the following statement is incorrect? Marks : 1.0
Id: 45103
1) Inflation : An increase in the overall level of 2) Productivity : The amount of goods and
prices in the economy services produced from each hour of a
worker’s time
3) Phillips curve: A curve that show the short run 4) Balance of Payment : which payment is
tradeoff between inflation and unemployment balanced in EXIM policy
Explanation:
Q254) Monopolist charge high price in the market in which elasticity is Marks : 1.0
Id: 45008
1) Small 2) Large
3) Infinite 4) Positive
Explanation:
Q255) Principle deals with the allocation of available resources among the Marks : 1.0
alternative activities. Id: 44871
1) Equi marginal principle 2) Discounting principle
3) Time perspective principle 4) Incremental principle
Explanation:
Q256) When income of a consumer rises, the demand for inferior goods . Marks : 1.0
Id: 45166
1) Rises. 2) Falls.
3) Does not change. 4) Either rises or falls
Explanation:
Q257) Which of the following combination is correct? Marks : 1.0
Id: 44878
1) IMF International monetary fund established 2) WTO World trade organization established in
in 1946 1995
3) IBRD International bank of reconstruction and 4) All of these
development also known as world bank
Explanation:
Q258) A market in which firms can enter and leave so easily that firms in the market face Marks : 1.0
competition from potential entrants is called a Id: 38764
1) Monopoly 2) Cartel
3) Contestable market 4) Limit pricing market
Explanation:
Q259) Which of the following is not the characteristic of a price taker? Marks : 1.0
Id: 44969
1) TR = P* Q 2) AR = PRICE
3) MR =AR =PRICE = DEMAND 4) Negatively sloped demand curve
Explanation:
Q260) The factor of production that organizes economic activity and bears the risk in a Marks : 1.0
business venture is: Id: 45073
1) Labor. 2) Entrepreneur
3) Capital. 4) Land
Explanation:
Q261) There are …………. types of price elasticity. Marks : 1.0
Id: 44904
1) Five 2) Four
3) Four 4) One
Explanation:
Q262) Who advocated economics is a science of choice? Marks : 1.0
Id: 38737
1) Pigou 2) Fisher
3) Robbins 4) Say
Explanation:
Q263) The kinked demand model explained Marks : 1.0
Id: 44989
1) Price flexibility 2) Price rigidity
3) Demand flexibility 4) Demand rigidity
Explanation:
Q264) Assume that when price is Rs. 20 the quantity demanded is 15 units, and when price Marks : 1.0
is increase by Rs. 3, the quantity demanded is 16 units. What is the marginal Id: 44958
revenue?
1) 18 2) 16
3) 12 4) 252
Explanation:
Q265) Which of the following method of forecasting is related to economic indicator? Marks : 1.0
Id: 44944
1) Barometric method 2) Regression
3) Trend projection method 4) Buyers intention method
Explanation:
Q266) Complementary goods like tea and sugar have a ________ cross elasticity: Marks : 1.0
Id: 45185
1) Zero 2) Negative
3) Positive 4) Infinity
Explanation:
Q267) As a rise in the price of ink pen, its effect on ink explained as a Marks : 1.0
Id: 44932
1) Increase in the price of ink 2) Increase in the demand of ink
3) Expansion in the quantity demanded of ink 4) Decrease in the demand of ink
Explanation:
Q268) If the price of orange juice increases, the demand for apple juice will ……… Marks : 1.0
Id: 44901
1) Increase 2) Decrease
3) Remains the same 4) Becomes negative
Explanation:
Q269) Sales maximization means Marks : 1.0
Id: 44848
1) Maximization of total revenue 2) Sale of large quantity of output
3) Increase the selling price 4) Minimize the cost
Explanation:
Q270) Economics is concerned with tradeoffs caused by scarcity. "Tradeoffs" refers to: Marks : 1.0
Id: 45022
1) recycling old goods into new goods to reduce 2) the alternatives given up when making
the scarcity problem. choices.
3) the buying and selling that occurs when 4) the decisions about whether households or
unwanted goods are exchanged for goods that businesses should bear the entire burden of
are desired. the scarcity problem.
Explanation:
Q271) If the proportionate change in demand is exactly equal and proportionate to the Marks : 1.0
change in price than elasticity of demand is Id: 38779
3) Less than one. 4) Equal to one.
Explanation:
Q272) GNP: Marks : 1.0
Id: 45080
1) Is the total of cash, capital, production and 2) Is the total capital
gold
3) Is the total of gold
4) Is the total measure of the flow of goods and
services at market value + income from abroad
Explanation:
Q273) Who is the mother of economics? Marks : 1.0
Id: 38733
1) Resources 2) Wife of Smith
3) Scarcity 4) Money
Explanation:
Q274) EBT or Net Profit Before Tax equals Marks : 1.0
Id: 45091
1) Sales revenue + cost of goods sold +all 2) Sales revenue +cost of goods sold all
expenses except for taxes expenses except for taxes
3) Sales revenue cost of goods sold +all 4) Sales revenue cost of goods sold +all
expenses includes taxes expenses except for taxes
Explanation:
Q275) An economy is said to be efficient if Marks : 1.0
Id: 45153
1) It is possible to produce more of all goods. 2) It is possible to produce more of one good
without producing less of another.
3) It is not possible to produce more of one good 4) It is not possible to produce more of one good
without producing less of another. at any cost
Explanation:
Q276) Petrol and Bikes are: Marks : 1.0
Id: 45207
1) Independent commodities 2) Complementary goods
3) Substitute goods 4) Identical goods
Explanation:
Q277) Which of the following sector is not include in the circular flow of income in a three Marks : 1.0
sector economy. Id: 44867
1) Household 2) Firms
3) Government 4) Foreign market
Explanation:
Q278) Generally the demand curve has Marks : 1.0
Id: 45273
1) A slope downwards from left to right 2) A constant slope
3) A slope upwards from right to left 4) A positive slope
Explanation:
Q279) is the example of mixed economy Marks : 1.0
Id: 45289
1) India 2) USA
Explanation:
Q280) The value of price elasticity of demand ranges from Marks : 1.0
Id: 44929
3) Zero to infinity 4) One to zero
Explanation:
Q281) Managerial economics adopts the scientific approach of economic analysis, but Marks : 1.0
which is not involved with the following? Id: 45105
1) Reasoning for economic events and behaviour 2) Policies of macro economy
of business
Explanation:
Q282) Which of the following is micro aspect? Marks : 1.0
Id: 44832
1) Inflation in the economy 2) Lock out in TELCO
3) Unemployment 4) Depreciate the home currency
Explanation:
Q283) An increase in the demand for a good will tend to cause: Marks : 1.0
Id: 45198
1) a decrease in the equilibrium price and 2) an increase in the equilibrium price and
quantity quantity
3) an increase in the equilibrium price and a 4) a decrease in the equilibrium price and an
decrease in the equilibrium quantity increase in the equilibrium quantity
Explanation:
Q284) Economics is the study of Marks : 1.0
Id: 45135
1) Production technology 2) Consumption decisions
3) How society decides what, how and for whom 4) The best way to run society
to produce
Explanation:
Q285) A monopolistically competitive firm that is incurring a loss will produce as long as Marks : 1.0
the price that the firm charges is sufficient to cover: Id: 45259
1) advertising costs 2) marginal costs
3) fixed costs. 4) variable costs
Explanation:
Q286) When we know the quantity of a product that buyers wish to purchase at each Marks : 1.0
possible price, we know Id: 45133
1) Demand 2) Supply
3) Excess demand 4) Excess supply
Explanation:
Q287) The government unit that wants to achieve "revenue enhancement" will find it Marks : 1.0
considerably more favorable to enact an excise tax on products whose demand is Id: 38782
1) Highly elastic. 2) Relatively elastic.
3) Highly inelastic. 4) Unitary elastic
Explanation:
Q288) When the price of petrol goes up, demand for automobiles decreases. It is implies Marks : 1.0
that the petrol & automobiles are......................... Id: 45258
1) Substitute goods 2) complementary goods
3) Inferior goods 4) Normal goods
Explanation:
Q289) In perfect competition, the price of the product is determined where the industry Marks : 1.0
Id: 45204
1) Elasticity of supply equals the industry 2) Supply curve and industry demand curve
elasticity of demand intersect.
3) Fixed cost is zero. 4) Average variable cost equals the industry
average total cost
Explanation:
Q290) Price discrimination is possible Marks : 1.0
Id: 44983
1) Only under monopoly situation 2) Under any market form
3) Only under monopolistic competition 4) Only under perfect competition
Explanation:
Q291) The regulatory mechanism of the market system is Marks : 1.0
Id: 45062
1) Selfinterest 2) Private property
3) Competition 4) Specialization
Explanation:
Q292) Assume that consumer’s incomes and the number of seller in the market for good A Marks : 1.0
both decrease. Based upon this information, we can conclude, with certainty, that the Id: 44955
equilibrium
1) Price will increase 2) Price will decrease
3) Quantity will increase 4) Quantity will decrease
Explanation:
Q293) Which of the following emphasized on normative aspect of science – Marks : 1.0
Id: 44825
1) Marshall 2) Pigou
3) Adam smith 4) Both a and b
Explanation:
Q294) Which is the correct statement? Marks : 1.0
Id: 45098
1) Accounting profit differs from economic profit 2) No difference between accounting cost and
economic cost.
3) Accounting cost is equal to opportunity cost 4) Opportunity cost is same as Economic Profit.
Explanation:
Q295) The sale of fastrack watch is a common in a situation of – Marks : 1.0
Id: 44991
Explanation:
Q296) Which of the following condition is not an essential condition of pure competition? Marks : 1.0
Id: 44965
1) Large no. of buyers and sellers 2) Homogeneous product
3) Freedom of entry 4) Absence of transport cost
Explanation:
Q297) “Economics is the study of administration of scare resources and of the Marks : 1.0
determinants of income and employments “. This definition of economics is given Id: 45115
by:
1) Robbinson 2) Keynes
3) Marshall 4) Adam Smith
Explanation:
Q298) When the price of a product is increased 10 percent, the quantity demanded Marks : 1.0
decreases 15 percent. In this range of prices, demand for this product is: Id: 45265
3) Crosselastic. 4) Unitary elastic.
Explanation:
Q299) What is income elasticity of demand , when income changes by 20% and demand Marks : 1.0
changes by 40% Id: 44937
1) ½ 2) 2
3) 3 4) 0.33
Explanation:
Q300) Retained Earnings equals Marks : 1.0
Id: 45093
1) Earnings After Tax (or Net Profit After Tax) 2) Earnings After Tax (or Net Profit After Tax) +
payable dividends payable dividends
3) Earnings After Tax + payable dividends 4) Net Profit After Tax + payable dividends
Explanation:
Q301) Test marketing result may not be correct, because Marks : 1.0
Id: 44939
1) Price elasticity of product is high 2) Events during the period not under control
3) Sample does not represent the population 4) Due misguide by panel of experts
where product is introduced
Explanation:
Q302) Triple identity in macroeconomics stands for Marks : 1.0
Id: 38758
1) O= I= E 2) A=B=C
3) X=Y=Z 4) M=N=P
Explanation:
Q303) The demand curve faced by a competitive firm is: Marks : 1.0
Id: 45234
1) Downward sloping, with the same elasticity as 2) Perfectly elastic at the established market
the industry demand curve. price
3) More inelastic than the demand curve faced by 4) Nonexistent.
its competitors.
Explanation:
Q304) A firm operating under conditions of perfect competitions can Marks : 1.0
Id: 45270
1) Determine the price of its product. 2) Capture the market by cutting down the price.
3) Determine only the size of its output. 4) Promote the sales through effective
advertisement.
Explanation:
Q305) Group behavior and interdependence is the characteristic of Marks : 1.0
Id: 45010
Explanation:
Q306) Historical data is used in estimating future demand under Marks : 1.0
Id: 38775
1) Survey method. 2) Expert opinion method.
3) Statistical method. 4) Complete Enumeration method.
Explanation:
Q307) Which profit the firm tries to maximize? Marks : 1.0
Id: 38757
1) Economic profit 2) Account profit
3) Opportunity profit 4) Average profit
Explanation:
Q308) When the full employment is reached it will lead to : Marks : 1.0
Id: 45127
1) Deflation 2) Inflation
3) Market welfare 4) None of them
Explanation:
Q309) The ABC Ltd. produces television . An economist working for the firm predicts that 'if Marks : 1.0
people's incomes rise next year, then the demand for our television will increase. The Id: 45191
accuracy of the economist's prediction depends on whether the television ABC Ltd.
produce:
1) are normal goods 2) have few complementary goods
3) have few substitutes 4) have many complementary goods
Explanation:
Q310) The demand curve of monopoly firm will be – Marks : 1.0
Id: 44974
1) Upward sloping 2) Downward sloping
Explanation:
Q311) An expected increase in future price of a good Marks : 1.0
Id: 45200
1) has no effect on either its demand or its 2) decreases its demand.
supply.
3) increases its demand.
4) increases its supply.
Explanation:
Q312) A firm and industry are same under Marks : 1.0
Id: 45216
Explanation:
Q313) Economic profit = total revenue – Marks : 1.0
Id: 44852
1) Economic cost 2) Implicit cost
3) Explicit cost 4) Accounting cost
Explanation:
Q314) All of the following are the exceptions of the law of demand except Marks : 1.0
Id: 44895
1) Giffen goods 2) Future expectation about prices
3) Demand for necessities 4) Demand for substitute goods
Explanation:
Q315) Consumers are likely to get a variety of goods under Marks : 1.0
Id: 44994
3) Imperfect competition 4) Oligopoly
Explanation:
Q316) Which of the following is not true about perfect competition? Marks : 1.0
Id: 45239
1) The demand curve is also the firm’s marginal 2) The demand curve slopes downwards.
revenue curve.
3) Free entry and exit.
4) Perfect knowledge among buyers and sellers
Explanation:
Q317) When excess demand occurs in an unregulated market, there is a tendency for: Marks : 1.0
Id: 38746
1) price to fall. 2) price to rise.
3) quantity demanded to increase. 4) quantity supplied to decrease.
Explanation:
Q318) Microeconomics is NOT concerned with the behavior of: Marks : 1.0
Id: 45053
1) Consumers 2) Aggregate demand
3) Firms 4) Industries
Explanation:
Q319) If demand increase due to increase in the income of consumer and at the same times Marks : 1.0
supply remains the same. equilibrium price and quantity demanded will be – Id: 44954
1) Increase, decrease 2) Decrease, decrease
3) Increase, increase 4) Decrease , increase
Explanation:
Q320) an economy that allocates resources through the decentralized decisions of many Marks : 1.0
firms and households as they interact in markets for goods and services is called as Id: 45099
1) Market Economy 2) Business Economy
3) Social Economy 4) Economies of Scale
Explanation:
Q321) The kinked demand curve model assumes that a firm's rivals will Marks : 1.0
Id: 38765
1) Follow the firm's price decreases but not its 2) Not follow any of the firm's price changes.
price increases
3) Follow any price change the firm makes.
4) Follow the firm's price increases but not its
price decreases.
Explanation:
Q322) It is defined as the difference between total revenue and total economic cost Marks : 1.0
Id: 45146
1) Economic profit 2) Gross profit
3) Accounting profit 4) Operating profit
Explanation:
Q323) The concept of choice would become irrelevant if Marks : 1.0
Id: 38735
1) capital were eliminated. 2) we were dealing with a very simple, one
person economy
3) scarcity were eliminated. 4) poverty were eliminated.
Explanation:
Q324) In the short run, the monopolist Marks : 1.0
Id: 44984
1) Incurs a loss 2) Abnormal profit
3) Makes a profit 4) Any of the above
Explanation:
Q325) Managerial economics is concerned with the problem of Marks : 1.0
Id: 45054
1) An individual firm. 2) An economy.
3) An industry. 4) Global economy.
Explanation:
Q326) Managerial economics is also called Marks : 1.0
Id: 38741
1) Applied Economics 2) Basic Economics
3) Macro Economics 4) Both ‘a’ and’ b’
Explanation:
Q327) A single point on the demand curve shows Marks : 1.0
Id: 45272
1) Demand and supply relationship 2) Price and demand relationship
3) Price and supply relationship 4) Price and cost relationship
Explanation:
Q328) Which realworld market closely approximates perfect competition Marks : 1.0
Id: 45190
1) most agricultural markets 2) automobile manufacturers
3) state universities 4) cable television services
Explanation:
Q329) NABARD established in – Marks : 1.0
Id: 44885
1) 1982 2) 1970
3) 1999 4) 1975
Explanation:
Q330) Demand curve slope downward from …………….. To ……………………….. . Marks : 1.0
Id: 44894
1) Left, right 2) Right ,left
3) Minimum , maximum 4) Maximum , minimum
Explanation:
Q331) Periods of less than full employment correspond to Marks : 1.0
Id: 44847
1) Points outside the PPF 2) Points inside the PPF
3) Points on the PPF 4) Any of these
Explanation:
Q332) The collapse of communism is evidence of Marks : 1.0
Id: 45035
1) Ceteris paribus 2) Market failure
3) The failure of a mixed economy 4) Government failure
Explanation:
Q333) In economics basic problem is ; Marks : 1.0
Id: 45048
1) Sacrcity 2) Production
3) Allocation 4) Money
Explanation:
Q334) If the local restaurant raises the price of pizza from Rs. 60 and Rs.100 and quantity Marks : 1.0
demanded falls from 700 pizzas to 100 pizzas. the price elasticity is – Id: 44912
1) 1.5 2) 3
3) 3 4) None of these
Explanation:
Q335) Which is one of the future consequences of an increase in the current level of Marks : 1.0
consumption in the India? Id: 44874
1) Slower economic growth in future 2) Greater economic growth in future
3) No change in growth rate 4) Greater capital; accumulation in future
Explanation:
Q336) The study of aggregates of economy is done through : Marks : 1.0
Id: 45111
3) Theory of Population 4) Micro and Macro both
Explanation:
Q337) Monopolistic competition differs from perfect competition primarily because: Marks : 1.0
Id: 45244
1) Barriers to entry in monopolistic competition 2) Product differentiation in monopolistic
competition
3) Advertisement is not necessary in 4) Firm is a price taker in monopolistic
monopolistic competition
Explanation:
Q338) Constrained optimization techniques are not designed to deal with the problem of: Marks : 1.0
Id: 45162
1) Selfserving management 2) Contractual requirements
3) Scarce investment funds 4) Limited availability of essential inputs
Explanation:
Q339) Goods that exhibit direct price demand relationship are called – Marks : 1.0
Id: 44923
1) Normal goods 2) Normal goods
3) Luxury goods 4) Complementary goods
Explanation:
Q340) Which of the following pairs of goods is an example of substitutes? Marks : 1.0
Id: 38784
1) Tea & Sugar 2) Tea & Coffee
3) Pen & Ink 4) Shirt & Trousers
Explanation:
Q341) Quantity demanded and price has a: Marks : 1.0
Id: 45205
1) Positive relationship 2) Constant relationship
3) Negative relationship 4) Zero relationship
Explanation:
Q342) Which statement is not the objective of the firm? Marks : 1.0
Id: 45106
1) Firm’s value Maximization to its shareholders. 2) Firm’s Size Maximization
3) Firm’s Profit Maximization 4) Firm’s Price Maximization
Explanation:
Q343) For what type of good does demand fall with a rise in income levels of household? Marks : 1.0
Id: 44931
1) Inferior goods 2) Substitutes
3) Luxurious 4) Necessities
Explanation:
Q344) What is MR? Marks : 1.0
Id: 38800
1) MR=TRnTRn1. 2) MR=TR/TQ.
3) MR=TR/TC. 4) MR=TR/AC.
Explanation:
Q345) Why do firms engage in price discrimination? Marks : 1.0
Id: 45278
1) To differentiate market segments 2) To gain monopolistic power
3) Keep consumers demand low 4) To make greater profits
Explanation:
Q346) Business economics is also known as _x000D_ _x000D_ Marks : 1.0
Id: 45283
1) Managerial Economics 2) Economics for executives
3) Economic analysis for business decisions 4) All of the above
Explanation:
Q347) Utility refers to – Marks : 1.0
Id: 44854
1) Want satisfying power of goods and service 2) Ethical concept
3) Stock concept 4) Utilization
Explanation:
Q348) GNP is equal to Marks : 1.0
Id: 45078
1) GDP + Interest 2) Wages
3) GDP+ Net factor income from abroad 4) GDP + Net depreciation
Explanation:
Q349) Equilibrium refers to Marks : 1.0
Id: 44856
1) Optimum situation 2) Absence of change in movement
3) Demand is equal to supply 4) All of these
Explanation:
Q350) Material welfare definition of economics stated by Marks : 1.0
Id: 44820
1) J B Say 2) Robbins
Explanation:
Q351) National income was kept somewhere between G.N.P. and N.N.P. by: Marks : 1.0
Id: 45123
1) Pigou 2) Marshall
3) Keynes 4) Adam Smith
Explanation:
Q352) In case the marginal cost of production is zero, the monopolist would produce at the Marks : 1.0
point where price elasticity Id: 45256
1) Unity 2) Zero
Explanation:
Q353) Which of the following is not incorrect? Marks : 1.0
Id: 38776
1) Accounting profit is the excess of accounting 2) Accounting cost is also known as explicit cost.
income over accounting expenses.
3) Economic profit = Total Revenue Economic
cost.
4) All of these
Explanation:
Q354) A firm has a variable cost of rs.1000 at 5 units of output. If fixed cost is Rs.400, what Marks : 1.0
will be the average total cost at 5 units of output? Id: 44964
1) Rs. 240 2) Rs. 120
3) Rs. 280 4) Rs. 60
Explanation:
Q355) Socialist economist like Karl Marx consider profit as Marks : 1.0
Id: 44851
1) Unearned surplus 2) Exploitation of labour
3) Both a and b 4) Uncertainty bearing
Explanation:
Q356) In economics, a firm is said to be making _______ when total revenues equal total Marks : 1.0
costs. Id: 45096
Explanation:
Q357) The principal reason behind economic problems is Marks : 1.0
Id: 45056
1) Limited wants 2) Limited or scarce means
3) Unlimited resources 4) Stable environment
Explanation:
Q358) If a consumption of a product remains unaffected by the change in price of the Marks : 1.0
product, demand for the product is: Id: 45182
1) Kinked 2) Perfectly elastic
3) Perfectly inelastic 4) Unitary elastic
Explanation:
Q359) Which among the following is not an economic problem? Marks : 1.0
Id: 38743
3) Why to produce 4) Relation between mother and child
Explanation:
Q360) Under which of the following forms of market structure does a firm have no control Marks : 1.0
over the price of its product? Id: 44972
Explanation:
Q361) If the demand for the product is independent of the demand for other goods ,it is Marks : 1.0
called is – Id: 44922
1) Derived demand 2) Autonomous demand
3) Industry demand 4) Company demand
Explanation:
Q362) The word economy comes from the Greek word for Marks : 1.0
Id: 45141
1) Environment. 2) One who participates in a market
3) One who manages a household 4) Conservation
Explanation:
Q363) A firm in long run equilibrium under monopolistic competition makes only Marks : 1.0
Id: 44988
1) Normal profits 2) Supernormal profits
3) Loss 4) All of the above
Explanation:
Q364) In monopoly, marginal revenue is: Marks : 1.0
Id: 45187
1) Always equal to price 2) Lower than price for all units other than the
first
3) Less than price at all levels of output and 4) Always greater than price
greater than price at high levels of output
Explanation:
Q365) “Full Employment” assumption is generally made in: Marks : 1.0
Id: 45110
3) Employment theory 4) None of the above
Explanation:
Q366) In economics the central problem is: Marks : 1.0
Id: 45036
1) Money 2) Scarcity
3) Allocation 4) Production
Explanation:
Q367) According to law of demand, there is …………… relationship between price and Marks : 1.0
quantity demanded of the goods. Id: 44889
1) Inverse 2) Direct
3) Legal 4) Negative
Explanation:
Q368) Micro economics is also known as ________: Marks : 1.0
Id: 45019
1) Product theory 2) Price theory
3) Process theory 4) Projection theory
Explanation:
Q369) an economist says that firm practices price discrimination, that firm is: Marks : 1.0
Id: 45275
1) Exploiting the poor 2) Charging different prices for the same good or
service
3) Making great efforts to keep its costs as low as 4) Producing two products, one with decreasing
possible returns to scale and the other with increasing
returns
Explanation:
Q370) Price control is one of the monopoly regulations which is most advantageous for Marks : 1.0
Id: 44985
1) The producer 2) The consumer
3) The government 4) The seller
Explanation:
Q371) Perfect competitive market firm achieves equilibrium when Marks : 1.0
Id: 38793
1) Demand = Supply 2) AR= MR
3) MR=MC 4) AR=MC
Explanation:
Q372) Supply refers to – Marks : 1.0
Id: 44945
1) What firms sell 2) What firms offer for sale
3) Stock maintained by seller 4) Selling of a goods at a profit
Explanation:
Q373) .equals revenue minus all explicit costs. Marks : 1.0
Id: 45061
1) Accounting profit 2) Economic profit
3) Normal profit 4) Loss
Explanation:
Q374) 46. Economic Profit = Total Revenue (___________________________________) Marks : 1.0
Id: 38749
1) Explicit Cost 2) Implicit Cost
3) Explicit Cost + Implicit Cost 4) Explicit Cost –Implicit Cost
Explanation:
Q375) _______economics deals with the determination of national income and output: Marks : 1.0
Id: 45042
1) Micro 2) Price
3) Macro 4) Individual
Explanation:
Q376) Who has written ‘it is not from the benevolence of the butcher, the brewer or the Marks : 1.0
baker that we expect our dinner, but from their regard to their own selfinterest’? Id: 38760
3) Malthus 4) Milton Friedman
Explanation:
Q377) Gross profit equals Marks : 1.0
Id: 45088
1) COGS 2) Sales Revenue minus cost of goods sold
3) Sales Revenue only 4) Sales Revenue plus Profit
Explanation:
Q378) When the price of commodity X rises, the quantity demanded of its substitute good Y Marks : 1.0
keeping the price of Y constant. Id: 45167
1) Rises. 2) Falls
3) Does not change 4) Either rises or falls
Explanation:
Q379) The condition of equilibrium in a firm is Marks : 1.0
Id: 45269
1) MR= MC 2) MR=AC
3) MR=AR 4) MC=AC
Explanation:
Q380) There would be no need to study economics if: Marks : 1.0
Id: 45021
1) there were no government controls on 2) people were free to do whatever they wanted
people's actions. with their lives.
3) there were enough resources to produce all 4) Government controls the economy.
the goods and services people would like to
obtain.
Explanation:
Q381) The price elasticity of demand measures: Marks : 1.0
Id: 45274
1) the slope of a budget curve. 2) the responsiveness of the quantity demanded
to changes in price.
3) how often the price of a good changes. 4) how sensitive the quantity demanded is to
changes in demand.
Explanation:
Q382) The Perfectly Competitive firm’s demand curve coincides with: Marks : 1.0
Id: 45179
1) its average revenue curve and total revenue 2) both its marginal and average revenue curve.
curve.
3) its average revenue curve and total revenue
curve.
4) both its marginal and total revenue curve
Explanation:
Q383) Product differentiation is the feature of Marks : 1.0
Id: 38797
Explanation:
Q384) The basic reason we study economics is because material wants and needs are: Marks : 1.0
Id: 45044
1) Limited and so are resources. 2) Unlimited but resources are not.
3) Limited but resources are not. 4) Unlimited and so are resources.
Explanation:
Q385) Which is the first order condition for the profit of a firm to be maximum? Marks : 1.0
Id: 44970
1) AC = MR 2) MC = MR
3) MR = AR 4) AC = AR
Explanation:
Q386) Adam Smith invisible hands stands for Marks : 1.0
Id: 38753
1) Two opposite market forces of demand and 2) Only demand
supply
3) Only supply
4) Production and Distribution
Explanation:
Q387) Which Of The Following Is/ Are False? Marks : 1.0
Id: 45129
1) With Good Monsoons People’s Purchasing 2) A Low Rate of Interest Is Must for Economic
Power Decreases Development
3) Rate Of Saving Is Important For Growth. 4) A and B
Explanation:
Q388) Which of the following is the reason of leftward ship of demand curve? Marks : 1.0
Id: 44898
1) Rise in the price of substitute 2) Change in taste in favour of this commodity
3) Rise in price of complementary 4) Rise in the income of the consumer
Explanation:
Q389) Demand for electricity power is elastic because – Marks : 1.0
Id: 44940
1) Due to its high price per unit 2) It is essential for life
3) It has many uses 4) It has many substitutes
Explanation:
Q390) Marginal utility analysis assumes that the marginal utility of money: Marks : 1.0
Id: 45113
1) Remains Constant 2) Varies according to consumer behaviour
3) Varies according to price fluctuations 4) Depend on the Inflation
Explanation:
Q391) Macroeconomics is the study of____________________ Marks : 1.0
Id: 45132
1) Individual building blocks in the economy 2) The relationship between different sectors of
the economy
3) Household purchase decisions 4) The economy as a whole
Explanation:
Q392) Items of joint consumption will have ______ cross elasticity Marks : 1.0
Id: 45250
3) Zero 4) None
Explanation:
Q393) Elasticity of demand is defined as the responsiveness of the quantity demanded of a Marks : 1.0
good to …… Id: 44902
1) Change in the price of the goods 2) Change in the income
3) Change in one of the variable on which 4) Change in the population
demand depends
Explanation:
Q394) cost is also known as imputed cost. Marks : 1.0
Id: 45290
1) Opportunity 2) Marginal
3) Total 4) Historical
Explanation:
Q395) Law of demand depends upon Marks : 1.0
Id: 45267
1) Inverse relationship between price & quantity 2) Positive relationship between price & quantity.
3) Both 4) None
Explanation:
Q396) Which of the following involves the study of the overall economy of a country? Marks : 1.0
Id: 45043
1) Nanoeconomics 2) Macroeconomics
3) Microeconomics 4) Neoeconomics
Explanation:
Q397) According to Adam Smith’s theory of the “invisible hand,” businesses will produce Marks : 1.0
the products consumers most desire because Id: 45025
1) this will maximize consumer satisfaction. 2) the government requires them to do so.
3) this will maximize business profits. 4) this will maximize society’s welfare.
Explanation:
Q398) Deductive , Analytical, Abstract method is used by: Marks : 1.0
Id: 45118
1) Classical School 2) NeoClassical School
3) Modern School 4) Ancient School
Explanation:
Q399) It is called as …………………….if_x000D_ Marks : 1.0
Id: 45102
• It explains the working of the economic system as a whole_x000D_
• It’s knowledge is indispensable for the policy makers_x000D_
• It is very useful to the planner for preparing economic plans_x000D_
• It is helpful in international comparison_x000D_ _x000D_
1) Micro economics 2) Macroeconomics
3) Indian economics 4) International economics
Explanation:
Q400) If the price of Pepsi rise, demand of coco cola Marks : 1.0
Id: 44942
3) Rise 4) Fall
Explanation:
Q401) Which of the following is the most accurate statement about economic models? Marks : 1.0
Id: 45143
1) Economic models attempt to mirror reality 2) Economic models are useful, but should not
exactly. be used for policymaking.
3) Economic models cannot be used in the real 4) Economic models omit many details to allow
world because they omit details. us to see what is truly important.
Explanation:
Q402) Product differentiation is a common feature in. Marks : 1.0
Id: 45264
1) Perfect competition. 2) Monopolistic competition.
3) Oligopoly. 4) Monopoly.
Explanation:
Q403) Micro economics is the Marks : 1.0
Id: 45058
Explanation:
Q404) Production possibility curve is Marks : 1.0
Id: 44875
1) Concave to the origin 2) Convex to the origin
3) Straight line when opportunity cost is constant 4) Both a and c
Explanation:
Q405) If a product has more substitutes, demand is highly . Marks : 1.0
Id: 45222
3) Relatively more elastic. 4) Relatively less elastic.
Explanation:
Q406) From society's point of view the economic function of profits and losses is to: Marks : 1.0
Id: 45147
1) Promote the equal distribution of real assets 2) Reallocate resources from less desired to
and wealth more desired uses
3) Achieve full employment and price level 4) Contribute to a more equal distribution of
stability income
Explanation:
Q407) With a fall in an agricultural crop due to bad monsoons, the supply elasticity of Marks : 1.0
agricultural goods will . Id: 45223
1) Fall. 2) Rise.
3) Change. 4) Not change.
Explanation:
Q408) Accounting profit = total revenue – Marks : 1.0
Id: 44853
3) Explicit cost 4) Marginal cost
Explanation:
Q409) Supply curve slope Marks : 1.0
Id: 44947
1) Downward from left to right 2) Upward from left to right
3) Downward from right to left 4) Upward from right to left
Explanation:
Q410) Managerial economic is a “ Fundamental academic subject which seeks to Marks : 1.0
understand and to analyse the problems of business decision taking” – the definition Id: 45085
is given by
1) Savage and Small 2) Adam smith
3) D.C. Hayue 4) Richard Meriam
Explanation:
Q411) Which of the following is an example of a resource constraint? Marks : 1.0
Id: 45158
1) Pollution control laws 2) Inadequate demand
3) Excessive production costs 4) Inadequate financial capital
Explanation:
Q412) Which of the following is not correct? Marks : 1.0
Id: 44943
1) If proportion of income spent on goods 2) If proportion of income spent on goods
remains same as an income is increase, then remains same as an income is decrease, then
income elasticity is one income elasticity is one
3) If proportion income spent on a good increase 4) If proportion income spent on a good increase
as an income increase, then income elasticity as an income increase, then income elasticity
is less than one is greater than one
Explanation:
Q413) Which is NOT the function of Managerial Economist? Marks : 1.0
Id: 45104
1) Controlling the macro economy only 2) Involved with macro and micro economy both
3) Demand estimation and forecasting 4) Directing economic research activity
Explanation:
Q414) Producers' total revenue will decrease if: Marks : 1.0
Id: 45199
1) the price rises and demand is inelastic. 2) income increases and the good is a normal
good.
3) the price rises and demand is elastic. 4) income falls and the good is an inferior good.
Explanation:
Q415) The switch to the use of HFCS from sugar in soft drinks was prompted in large part Marks : 1.0
by its relatively lower price. Assuming a competitive market, what effect would this Id: 38803
change have on the equilibrium price and output for soft drinks?
1) price rises, output falls 2) price falls, output rises
3) price rises, output rises 4) price falls, output falls
Explanation:
Q416) Adam Smith’s theory of the “invisible hand” assumes that Marks : 1.0
Id: 45028
1) businesses will voluntary reduce negative 2) consumers are concerned about maximizing
externalities generated by the production of the welfare of their fellow consumers.
their products
3) selfinterested producers sell their products to
selfinterested consumers.
4) government research is necessary to inform
businesses what consumers most want.
Explanation:
Q417) The Latin phrase ‘Ceterius Paribus’ means: Marks : 1.0
Id: 45018
1) ‘Everything else change simultaneously’ 2) ‘Everything else being equal’
3) ‘Few factors change at same frequency’ 4) ‘All factors change at same frequency’
Explanation:
Q418) The price elasticity of demand is a negative number this means: Marks : 1.0
Id: 45230
1) Demand is price elastic 2) Demand is price inelastic
3) The demand curve is downward sloping 4) An increase in income will reduce the quantity
demanded
Explanation:
Q419) If demand is price inelastic: Marks : 1.0
Id: 45231
1) An increase in price must raise profits 2) An increase in price decreases revenue
3) An increase in price increases revenue 4) A decrease in price reduces sales
Explanation:
Q420) To maximize value, management must: Marks : 1.0
Id: 45160
1) Maximize short run revenue 2) Minimize short run average profit
3) Maximize long run profit 4) Maximize short run profit
Explanation:
Q421) A selfinterest can be well understood as Marks : 1.0
Id: 38755
1) Acting in the way that is most personally 2) Acting in the way that is most beneficial to the
beneficial society
3) Acting in the way that is most beneficial to the 4) Acting in the way that is most beneficial to the
family firm
Explanation:
Q422) If the price of coffee fall the demand for tea will ……………….. Marks : 1.0
Id: 44892
1) Rise 2) Fall
3) decrease 4) constant
Explanation:
Q423) The Law of Demand states that when the price of a commodity falls the quantity Marks : 1.0
demanded keeping all other factors constant. _x000D_ Id: 45220
1) Rises. _x000D_ 2) Falls
3) Is constant._x000D_ 4) Will remain constant. _x000D_
Explanation:
Q424) Multi plant monopolist is an illustration of Marks : 1.0
Id: 45189
1) Price discrimination of first degree 2) Price discrimination of second degree
3) Price discrimination of third degree 4) Natural monopoly
Explanation:
Q425) Which of the following is shut down point Marks : 1.0
Id: 45004
1) AR > AC 2) AR > AVC
3) AR < AVC 4) AR > FC
Explanation:
Q426) Ceteris Paribus is the Latin expression for Marks : 1.0
Id: 45034
1) A statement about the way the economic world 2) An expression that means "other things being
ought to be equal."
3) The (false) statement that what is true of the 4) The error of reasoning that a first event causes
parts is true of the whole or what is true of the a second event because the first event
whole is true of the parts. occurred before the second event.
Explanation:
Q427) To cure the problem of externalities, such as pollution, economists recommend that Marks : 1.0
government Id: 45029
1) regulate polluters 2) pursues a policy of laissezfaire, "hands off"
businesses.
3) determine mandatory limits controlling the 4) use the market mechanism to control
amount of pollution which businesses may undesirable externalities.
generate.
Explanation:
Q428) Demand of commodity refers to Marks : 1.0
Id: 44886
1) Desire for the commodity 2) Need for the commodity
3) Quantity demanded for that commodity 4) Quantity of the commodity demanded at a
certain price during any particular period of
time.
Explanation:
Q429) In case of increase in demand, the demand curve Marks : 1.0
Id: 38773
1) Shifts backwards. 2) Shifts forward.
3) Will have upward slope. 4) Will be horizontal.
Explanation:
Q430) According to profit maximization theory of the firm, management decides Marks : 1.0
Id: 45064
1) Output level which maximizes revenue 2) Output level which minimizes cost
3) Output level which maximizes difference 4) Output level which minimizes revenue
between the two
Explanation:
Q431) The theory of monopolistic competition is developed by Marks : 1.0
Id: 44986
1) E H Chamberlin 2) Robinson
Explanation:
Q432) The modern theory of the firm holds that firms behave in a way that is designed to Marks : 1.0
maximize Id: 45154
1) Profit 2) The value of the firm
3) Monopoly power 4) Total revenue
Explanation:
Q433) The Classical theory of international trade is propounded by : Marks : 1.0
Id: 45128
1) Adam smith 2) Robbinson
3) Pigou 4) Marx
Explanation:
Q434) Change in demand represents Marks : 1.0
Id: 44899
1) Shift of demand curve to left or right 2) Shift of demand curve to left
3) Shift of demand curve to right 4) Expansion and contraction
Explanation:
Q435) In a perfectly competitive market ______________. Marks : 1.0
Id: 45263
1) There are large number of buyers and a small 2) There are a large number of sellers and small
number of sellers. number of buyers.
3) There are a small number of sellers and 4) There are a large number of buyers and
buyers. sellers.
Explanation:
Q436) When the decrease in the price of one good causes the demand for another good to Marks : 1.0
decrease, the goods are: Id: 45254
1) normal. 2) inferior
3) Substitute 4) Complimentary
Explanation:
Q437) If there are many firms in an industry producing goods that are similar but slightly Marks : 1.0
different, this is an example of: Id: 45233
Explanation:
Q438) The tendency for managers to operate a firm in a way that maximizes their personal Marks : 1.0
utility rather than the firm’s profits is referred to as the Id: 45155
1) Consumer utility incentive 2) Principalagent problem
3) Hidden agenda scenario 4) Modigliani Hypothesis
Explanation:
Q439) With a fall in agricultural subsidy, the price of agricultural goods will and the Marks : 1.0
quantity supplied will also keeping all other variables constant. Id: 45224
1) Increase 2) Decrease.
3) Will not increase. 4) Will not decrease.
Explanation:
Q440) If Average revenue = Rs.10 and Average cost = Rs. 7, then Marks : 1.0
Id: 38770
1) Firm get Normal Profit 2) Firm get abnormal Profit
3) Firm face Loss 4) Break even point
Explanation:
Q441) The total demand for goods and services in an economy is known as: Marks : 1.0
Id: 45248
1) aggregate demand 2) gross national product
3) economywide demand. 4) national demand
Explanation:
Q442) Sales revenue after deducting all expenses, including taxes Marks : 1.0
Id: 45092
1) Earnings After Tax 2) Net Profit before Tax
3) Earnings before Tax 4) Gross Profit After Tax
Explanation:
Q443) Negative cross elasticity between any two commodities implies that they are: Marks : 1.0
Id: 45253
1) Complements 2) Substitutes
3) Inferior goods 4) Luxuries
Explanation:
Q444) If electricity demand is inelastic, and electricity charge increase, which of the Marks : 1.0
following is likely to occur? Id: 44925
1) Quantity demanded will fall by a relatively 2) Quantity demanded will rise in the short run
large amount but fall in long run
3) No change in quantity demanded 4) No change in quantity demanded
Explanation:
Q445) When consumption and investment spending together is greater than full Marks : 1.0
employment GNP level, it creates Id: 45121
1) Deficit Financing 2) Deflationary GAP
3) Inflationary GAP
Explanation:
Q446) With a fall in a price of a commodity Marks : 1.0
Id: 44924
1) Consumers real income increase 2) Consumers real income decrease
3) No change real income 4) None of these
Explanation:
Q447) The total revenue curve for a perfectly competitive firm Marks : 1.0
Id: 45257
1) is a vertical line intersecting the horizontal 2) is a horizontal line at the market price
axis
3) starts part way up the vertical axis, sloping
upward in a backwardsS curve
4) is a straight line starting from the origin and
sloping upward
Explanation:
Q448) Goods and Services bought and sold in: Marks : 1.0
Id: 45049
1) Product Market 2) Factor Market
3) Capital Market 4) Money Market
Explanation:
Q449) Value maximization means Marks : 1.0
Id: 44850
1) Profit maximization 2) Sales maximization
3) Wealth maximization 4) Cost minimization
Explanation:
Q450) The demand of which type of goods do not decrease with increase in its price – Marks : 1.0
Id: 44935
1) Comforts 2) Luxury
3) Necessities 4) Capital goods
Explanation:
Q451) Derivative use in the …………………….. Method of price elasticity. Marks : 1.0
Id: 44909
1) Point 2) Outlay
3) Arc 4) Output
Explanation:
Q452) Demand forecasting is made for the Marks : 1.0
Id: 38774
1) For the existing products only. 2) New products only.
3) For both the existing products & for the new 4) For the substitutes only.
products.
Explanation:
Q453) Firm is an organization that produces and sells goods with the goal of maximizing its Marks : 1.0
profits Id: 44849
1) Miller 2) Adam smith
3) Landsbury 4) Marshall
Explanation:
Q454) Sales opinion survey method is also known as Marks : 1.0
Id: 44927
1) Sample survey 2) Experts pinion method
3) Test marketing 4) Reaction survey
Explanation:
Q455) Brand Loyalty usually makes the demand curve for a product: Marks : 1.0
Id: 45195
1) More price elastic 2) Less price elastic
3) Unitary elastic 4) More income elastic
Explanation:
Q456) To accountants, it is a singleperiod metric to determine the value created by a Marks : 1.0
company in one period—usually a year Id: 45094
3) Net Profit 4) Norma Profit
Explanation:
Q457) If elasticity is greater than one, then MR is Marks : 1.0
Id: 45009
1) Positive 2) Zero
3) Negative 4) Negative
Explanation:
Q458) Inflation is: Marks : 1.0
Id: 45249
1) a decrease in the overall level of economic 2) a decrease in the overall price level
activity
3) an increase in the overall price level
4) an increase in the overall level of economic
activity
Explanation:
Q459) cost is also known as explicit cost. Marks : 1.0
Id: 45291
3) Outlay 4) Sunk
Explanation:
Q460) What is the goal of theories? Marks : 1.0
Id: 45150
1) To provide an interesting, but not useful, 2) To help scientists understand how the world
framework of analysis works
3) To demonstrate that the developer of the 4) To provoke stimulating debate in scientific
theory is capable of logical thinking journals
Explanation:
Q461) The crosselasticity of the two complementary goods X and Y is . Marks : 1.0
Id: 45174
3) Direct. 4) Indirect.
Explanation:
Q462) If the price of Pepsi decreases relative to the price of coke and 7up , the demand for Marks : 1.0
Id: 44893
1) Coke will decrease 2) 7 up will decrease
3) Coke and 7up will increase 4) Coke and 7up will decrease
Explanation:
Q463) Economic Analysis for Business Decisions is integration of: Marks : 1.0
Id: 45071
1) Technology, Economics and physical science 2) Economics, decision science and business
management
3) Knowledge and principles 4) Control and conflicts
Explanation:
Q464) Of the following commodities which has the lowest elasticity of demand Marks : 1.0
Id: 38785
1) Car 2) Salt
3) Tea 4) House
Explanation:
Q465) When as a result of increase in price of a good , the total expenditure made on the Marks : 1.0
good falls, we say that price elasticity of demand is – Id: 44913
3) Equal to unity 4) zero
Explanation:
Q466) When an individual spends relatively less proportion of his/her total income on a Marks : 1.0
particular commodity or service, its elasticity of demand is elastic. Id: 45172
1) More. 2) Less.
3) Relatively more. 4) Relatively less.
Explanation:
Q467) Business profit is equal total revenue minus Marks : 1.0
Id: 45157
1) Economic costs 2) Explicit costs
3) Implicit costs 4) Managerial costs
Explanation:
Q468) A market economy based on supply and demand with little or no government control Marks : 1.0
is known as Id: 45015
1) Free economy 2) No economy
3) Restricted economy 4) Only economy
Explanation:
Q469) It is called as______________if _x000D_ • It explains Price Determination_x000D_ • It Marks : 1.0
explains Allocation of Resources_x000D_ • It has Direct Relevance in Business Id: 45100
Decision Making_x000D_ • It serves as a Basis for Prediction
1) Micro economics 2) Macro economics
3) Indian economics 4) Industrial economics
Explanation:
Q470) Economics is defined as: Marks : 1.0
Id: 45040
1) The study of business 2) The study of how society manages its scarce
resources
3) The study of central planning 4) The study of government regulation
Explanation:
Q471) Macroeconomics examines: Marks : 1.0
Id: 45072
1) pricing, profit maximization, and utility 2) employment, output, and inflation.
maximization.
3) the behavior of individual households,
businesses, and government units.
4) firm, Industry and sector
Explanation:
Q472) One of the basic assumptions underlying Adam Smith's theory of the Invisible Hand Marks : 1.0
is that Id: 45027
1) government attempts to maximize power. 2) government planning is necessary to
maximize economic growth.
3) businesses and households are concerned 4) households are unselfish. They attempt to
about their own “selfinterest.” maximize the well being of their fellow citizens.
Explanation:
Q473) Total revenue is maximum when_x000D_ Marks : 1.0
Id: 45281
1) Marginal revenue is positive _x000D_ _x000D_ 2) Marginal revenue is negative
3) Marginal revenue is zero 4) None of the above
Explanation:
Q474) Economics deals primarily with the concept of: Marks : 1.0
Id: 45067
1) Poverty 2) Change
3) Scarcity 4) Power
Explanation:
Q475) Who is the president of planning commission? Marks : 1.0
Id: 44880
1) Prime minister 2) President
3) Governor 4) Finance minister
Explanation:
Q476) A market situation where there are few sellers for the product is called : Marks : 1.0
Id: 45238
1) Pure competition 2) Oligopoly.
3) Monopolistic 4) Monosony.
Explanation:
Q477) The price of beverage increase by 22% and the quantity demanded of it falls by 25%. Marks : 1.0
This indicates that demand for beverage is – Id: 44911
1) Elastic 2) Inelastic
3) Unitary elastic 4) Perfectly elastic
Explanation:
Q478) Microeconomics deals with which of the following? Marks : 1.0
Id: 45140
1) The total output of an economy 2) The measurement of a nation's inflation rate
3) How producers and consumers interact in 4) How tax policies influence economic growth
individual markets
Explanation:
Q479) The crosselasticity of the two substitute goods X and Y is . Marks : 1.0
Id: 45173
Explanation:
Q480) Elasticity between two points calculate in – Marks : 1.0
Id: 44934
1) Cross elasticity 2) Arc elasticity
3) Point elasticity 4) Outlay method
Explanation:
Q481) Movement along the same demand curve shows Marks : 1.0
Id: 44930
1) Expansion of demand 2) Contraction of demand
3) Increase or decrease in demand 4) Expansion and contraction in demand
Explanation:
Q482) When the price of commodity X rises, the quantity demanded of its complementary Marks : 1.0
good Y keeping the price of Y constant. Id: 45168
1) Rises. 2) Falls
Explanation:
Q483) Goods which has a negative income elasticity called as Marks : 1.0
Id: 44919
1) Inferior goods 2) Inferior goods
3) Complementary goods 4) Substitute goods
Explanation:
Q484) Capital goods are those goods Marks : 1.0
Id: 44855
1) Which are consumed by consumer 2) That help in further production
3) That can be consumed number of times 4) That satisfy human wants
Explanation:
Q485) To Adam Smith, the "invisible hand" refers to Marks : 1.0
Id: 45046
1) the government 2) his faith in people's basic human kindness to
their fellow man.
3) the generosity of businesses in a capitalist 4) the free market.
system.
Explanation:
Q486) Which of this is a noncompetitive market? Marks : 1.0
Id: 45245
1) Oligopoly 2) Perfect competition
3) Monopoly 4) Monopolistic
Explanation:
Q487) is the predecessor of WTO. Marks : 1.0
Id: 45059
1) GAAT 2) IMF
Explanation:
Q488) Managerial Economics has a wide scope in Marks : 1.0
Id: 45076
1) Value Engineering 2) Value Engineering Management
3) Value Management 4) Profit Management
Explanation:
Q489) Which of the following sentence is correct? Marks : 1.0
Id: 44948
1) Contraction of supply means upward 2) Expansion of supply means downward
movement of supply curve movement of supply curve
3) Increase in supply means rightward shift of 4) Expansion of supply means upward movement
demand curve of supply curve
Explanation:
Q490) Micro economic is also known as Marks : 1.0
Id: 44858
1) Income theory 2) Profit theory
3) Price theory 4) Cost theory
Explanation:
Q491) The circular flow of goods and incomes shows the relationship between: Marks : 1.0
Id: 45047
1) wages and salaries. 2) firms and households
3) goods and services. 4) income and money.
Explanation:
Q492) The firm can achieve equilibrium when its Marks : 1.0
Id: 45193
1) MC= MR 2) MC= AC
3) ME= AC 4) MR= AR
Explanation:
Q493) The foundation stones from which economic models are built are Marks : 1.0
Id: 45149
1) Economic policies. 2) The legal system.
3) Assumptions. 4) Statistical forecasts
Explanation:
Q494) Uniform price is the feature of – Marks : 1.0
Id: 44981
Explanation:
Q495) There is relationship between price and quantity supplied of the goods. Marks : 1.0
Id: 44946
1) Direct 2) Inverse
3) Constant 4) Fixed
Explanation:
Q496) What is equilibrium price and quantity in the following case? Marks : 1.0
Id: 44951
1) 15,40 2) 35, 20
3) 25, 50 4) None of these
Explanation:
Q497) Marginal revenue is equal to Marks : 1.0
Id: 44957
1) The change in price divided by change in 2) Change in quantity divided by change in price
output
3) The change in P*Q due to one unit change in
output
4) Average price of the goods
Explanation:
Q498) The firm is said to be in equilibrium when – Marks : 1.0
Id: 44966
1) It maximizes its profit 2) Demand is equal to supply
3) It minimizes its losses 4) Demand is at its highest point
Explanation:
Q499) Which method of demand forecasting, firms takes all households into consideration? Marks : 1.0
Id: 38777
1) Complete enumeration survey method 2) Sales force opening method
3) Delphic method 4) Sample survey method
Explanation:
Q500) A cartel is most likely to occur in Marks : 1.0
Id: 45276
1) Perfect competition as firms compete by 2) Monopolistic competition where firms collude
reducing cost to increase profits
3) Monopoly because it faces no competition 4) Oligopoly as firms act together to raise prices
and increase profits
Explanation:
Q501) For the free market to yield optimal results for the production and consumption of Marks : 1.0
good X,dam Smith assumed all of the following would have to exist, except possibly Id: 45030
one. The single exception is
1) competition exists in the production of good X. 2) successful government planning is able to
inform businesses how much of good X
consumers demand.
3) no externalities exist in the production or 4) consumer sovereignty exists.
consumption of good X.
Explanation:
Q502) Freedom of choice is the feature of Marks : 1.0
Id: 44840
Explanation:
Q503) The Definition that Economics is concerned with an enquiry into the nature and Marks : 1.0
causes of wealth of nations is given by: Id: 45114
1) Carl Marx 2) Adam Smith
3) J. E. Cairens 4) Keynes
Explanation:
Q504) A movement along the same demand curve for Samsung mobile is best described as Marks : 1.0
– Id: 44900
1) An increase in demand 2) A decrease in demand
3) A change in quantity demanded 4) A change in demand
Explanation:
Q505) The invisiblehand concept suggests that: Marks : 1.0
Id: 45144
1) Market failures imply the need for a national 2) Big businesses are inherently more efficient
economic plan than small businesses
3) The competitiveness of a capitalistic market 4) Assuming competition, private and public
economy invariably diminishes over time interests will coincide
Explanation:
Q506) The price elasticity of demand for addictive products like cigarettes and alcohol Marks : 1.0
would be: Id: 45236
1) Infinity 2) Less than 1
3) Greater than 1 4) Zero
Explanation:
Q507) Factor that will determine whether advertising by manufacturer will lead to higher Marks : 1.0
sales Id: 45011
1) If demand is elastic 2) If demand is inelastic
3) The product can be differentiated 4) The product is branded
Explanation:
Q508) Perfectly competitive firm can sell all output it wants to Marks : 1.0
Id: 45192
1) By cutting down supply of output 2) By lowering the price it charges to each
additional unit produced
3) By lowering its costs of production 4) Without lowering the price
Explanation:
Q509) Indian railway is the example of – Marks : 1.0
Id: 45006
3) Perfect competition 4) Duopoly
Explanation:
Q510) If the proportion of income spent on a good increase as a income increases , then the Marks : 1.0
income elasticity for that good is – Id: 44917
Explanation:
Q511) The quantity supplied of X and the price of X are related. Marks : 1.0
Id: 45201
1) Positively. 2) Negatively.
3) Directly. 4) Indirectly.
Explanation:
Q512) Generally the demand curve – Marks : 1.0
Id: 44928
1) A slope downward from left to right 2) A slope upward from left to right
3) Has Negative slope 4) Both a and c
Explanation:
Q513) Under perfect competition a firm can produce with Marks : 1.0
Id: 44993
1) An optimum plant 2) An optimum output
3) Maximum profit 4) Identical product at low cost
Explanation:
Q514) A market can accurately be described as Marks : 1.0
Id: 45137
1) A place to buy things 2) A place to sell things
3) The process by which prices adjust to 4) A place where buyers and sellers meet
reconcile the allocation of resources
Explanation:
Q515) Opportunity cost is Marks : 1.0
Id: 45083
1) a cost that cannot be avoided, regardless of 2) that which we forgo, or give up, when we make
what is done in the future a choice or a decision
3) the cost incurred in the past before we make a 4) the additional benefit of buying an additional
decision about what to do in the future. unit of a product
Explanation:
Q516) Increase in consumer’s income leads in the demand for inferior goods to Marks : 1.0
Id: 45271
1) increase 2) decrease
3) remains constant 4) none of the above
Explanation:
Q517) The assumptions that there are a large number of sellers and product homogeneity, Marks : 1.0
in perfect competition it implies that all individual firms are _________: Id: 45240
1) Price movers 2) Price Takers
3) Price givers 4) Price offers
Explanation:
Q518) Economic profit equals: Marks : 1.0
Id: 45163
1) Normal profit plus opportunity costs 2) Business profit minus implicit costs
3) Business profits plus implicit costs 4) Normal profits minus opportunity costs
Explanation:
Q519) To study an individual consumer’s behaviour, we need: Marks : 1.0
Id: 45109
3) Micro and Macro Both 4) Consumer behaviour science
Explanation:
Q520) Price discrimination means Marks : 1.0
Id: 45007
1) Charge different price from different buyer for 2) Charge different price from different buyer for
different product same product
3) Charge different price from different seller for 4) Charge same price from different buyer for
same product same product
Explanation:
Q521) A market structure in which many firms sell products that are similar but not identical Marks : 1.0
is known as – Id: 44975
Explanation:
Q522) Principal agent problem reflects differences in the objectives Marks : 1.0
Id: 45286
1) Owner and Manager _x000D_ b) d) 2) Manager and employees
3) Owner and board of directors 4) Employees and customers _x000D_
Explanation:
Q523) A movement along the demand curve to the left may be caused by: Marks : 1.0
Id: 38748
1) a fall in the number of substitute goods. 2) a rise in the price of inputs.
3) a decrease in supply. 4) a rise in income.
Explanation:
Q524) Invisible hand theory is given by Marks : 1.0
Id: 44845
1) Samuelson 2) Adam smith
Explanation:
Q525) Which of the following is not the factor which determine the demand Marks : 1.0
Id: 44888
1) Level of income 2) Price
3) Supply 4) Fashion
Explanation:
Q526) It is a theoretical measure and denotes the "right" level of profit a business can Marks : 1.0
achieve Id: 45095
1) Optimum Profit 2) Economic Profit
3) Economic Rent 4) Accounting Profit
Explanation:
Q527) Expansion and contraction occurs due to Marks : 1.0
Id: 44896
1) Change in the price of goods concerned 2) Change in the level of income of people
3) Change in the population 4) Change in price of substitute goods
Explanation:
Q528) Which of the following curve is never U shaped? Marks : 1.0
Id: 44962
1) Marginal cost 2) Average variable cost
3) Average total cost 4) Average fixed cost
Explanation:
Q529) The quantity demanded of X and the price of X are related. Marks : 1.0
Id: 45219
3) Directly 4) Indirectly
Explanation:
Q530) All of the following are determinants of demand except: Marks : 1.0
Id: 45241
1) Price 2) Supply
3) Tastes 4) Price of other goods
Explanation:
Q531) Cost is also known as imputed cost. Marks : 1.0
Id: 44842
Explanation:
Q532) Based on the Law of demand, quantity demanded is _________ related to price: Marks : 1.0
Id: 45208
1) Directly 2) Positively
3) Inversely 4) Actually
Explanation:
Q533) Income elasticity for luxurious goods is Marks : 1.0
Id: 44918
3) Less than one 4) Greater than one
Explanation:
Q534) When we analyse the problems of economy as a whole it is a study of: Marks : 1.0
Id: 45108
3) Micro and Macro both 4) None of these
Explanation:
Q535) It is also known as Prescriptive Economics Marks : 1.0
Id: 45033
1) Positive Economics 2) Micro economics
3) Normative economics 4) Economics
Explanation:
Q536) The opportunity cost of a good is Marks : 1.0
Id: 45136
1) The time lost in finding it 2) The quantity of other goods sacrificed to get
another unit of that good
3) The expenditure on the good 4) The loss of interest in using savings
Explanation:
Q537) If the demand curve shift from left to right then it is called as Marks : 1.0
Id: 44897
1) Increase in demand 2) Decrease in demand
3) Expansion in demand 4) Contraction in demand
Explanation:
Q538) First condition of equilibrium is MC = MR and second condition is should Marks : 1.0
cut from . Id: 45005
1) MC curve, MR curve, above 2) MC curve, MR curve, below
3) MR curve, MC curve, below 4) MR curve, MC curve, above
Explanation:
Q539) Basic price – Marks : 1.0
Id: 45087
1) Is the valuation of the product of the firm 2) Is the determination of cost of product of the
firm
3) Is the determination of the companies price 4) Is a cost price
level
Explanation:
VIM102 Name : ______________________________________________________
Marks: 539 Roll No : ______________________________________________________
Duration: 20.0 Minutes Total : ______________________________________________________
Date : ______________________ Signature : ______________________
Q1) Macroeconomics provides an exploration to the functioning of an economy in Marks : 1.0
Id: 38752
1) General 2) Particular
3) Partial 4) Global
Explanation:
Q2) cost measures the sacrifice made for taking a decision Marks : 1.0
Id: 44833
3) Average cost 4) Economic cost
Explanation:
Q3) Which of the following is incorrect? Marks : 1.0
Id: 44908
1) Perfectly elastic – E= ∞ 2) perfectly inelastic E= 1
3) unitary inelastic E = 1 4) relatively inelastic E < 1
Explanation:
Q4) If marginal cost equals to average total cost Marks : 1.0
Id: 44963
1) Average total cost is falling 2) Average total cost is rising
3) Average total cost is maximized 4) Average total cost is minimized
Explanation:
Q5) In the short period the national income is determined by Marks : 1.0
Id: 45120
1) Aggregate demand and price 2) Aggregate supply and price
3) Aggregate demand and aggregate supply 4) Aggregate Demand only
Explanation:
Q6) EBIT or Operating profit equals Marks : 1.0
Id: 45090
1) Sales revenue + cost of goods sold + all 2) Sales revenue cost of goods sold + all
expenses except for interest and taxes expenses except for interest and taxes
3) Sales revenue all expenses except for 4) Sales revenue cost of goods sold + all
interest and taxes expenses with interest and taxes
Explanation:
Q7) Economists make assumptions Marks : 1.0
Id: 45142
1) To diminish the chance of wrong answers. 2) To make certain that all necessary variables
are included.
3) Because all scientists make assumptions. 4) To make the world easier to understand.
Explanation:
Q8) Kinked demand curve is the characteristic of – Marks : 1.0
Id: 44973
Explanation:
Q9) According to Robbins economics is Marks : 1.0
Id: 38772
1) Positive and ethical science 2) Positive and unethical science
3) Normative and ethical science 4) Normative and unethical science
Explanation:
Q10) Quantity demanded is always expressed at a given – Marks : 1.0
Id: 44887
1) Income 2) Price
3) Value 4) Supply
Explanation:
Q11) Scarcity is a condition that exists when: Marks : 1.0
Id: 45017
1) there is a fixed supply of resources. 2) there is a large demand for a product.
3) resources are not able to meet the entire 4) the supply is equal to demand.
demand for a product.
Explanation:
Q12) Monopoly firm , in long run earn Marks : 1.0
Id: 38796
Explanation:
Q13) Under method of forecasting firm can obtain the information from door to Marks : 1.0
door survey Id: 44933
1) Consumers survey 2) Complete enumeration survey
3) Delphi technique 4) Sample survey
Explanation:
Q14) A firm under has a regular tendency to show excess capacity Marks : 1.0
Id: 44982
Explanation:
Q15) The period of 12th five year plan is Marks : 1.0
Id: 44881
1) 20122017 2) 20122016
3) 20102015 4) 20072012
Explanation:
Q16) The government wants to reduce the consumption of electricity by 5%. The price Marks : 1.0
elasticity of demand for electricity is 0.4. The government should Id: 38763
1) raise the price of electricity by .08%. 2) lower the price of electricity by .4%.
3) raise the price of electricity by 12.5%. 4) raise the price of electricity by 2%.
Explanation:
Q17) If anything flowing from the circular flow is termed as Marks : 1.0
Id: 38759
1) Leakage 2) Injection
3) Flowing 4) Flying
Explanation:
Q18) Money is: Marks : 1.0
Id: 45125
1) Consumer good 2) Capital good
3) Producer good 4) Neither of them
Explanation:
Q19) The basis of micro economic is Marks : 1.0
Id: 44830
1) Price mechanism 2) Full employment
3) National income 4) Price stability
Explanation:
Q20) How prices are determined in the free market? Marks : 1.0
Id: 38792
1) With the help of demand and supply 2) Price and supply
3) Supply and price 4) Managers
Explanation:
Q21) When people have very little time to respond to price changes, demand becomes: Marks : 1.0
Id: 45183
1) More elastic 2) Less elastic
3) Unitary elastic 4) Time does not affect price elasticity
Explanation:
Q22) In case of increase in demand, the demand curve : Marks : 1.0
Id: 45180
1) Shifts leftwards. 2) Shifts rightwards.
3) Will have upward slope 4) Will be horizontal.
Explanation:
Q23) In free enterprise economy basic economic problems are solved with the help of Marks : 1.0
Id: 44837
1) Price mechanism 2) Demand and supply interaction
3) Government 4) Central planning department
Explanation:
Q24) Due to a scarcity of resources, Marks : 1.0
Id: 45139
1) Every society must undertake central planning 2) The government must decide how to allocate
available resources
3) Some members of each society must live in 4) Every society must choose among competing
poverty uses of available resources
Explanation:
Q25) The elasticity of supply is defined as the responsiveness of the quantity supplied of a Marks : 1.0
goods to a change in Id: 44949
1) One of the variable factor on which supply 2) Its income
depends
3) Its price
4) Its cost
Explanation:
Q26) Cross elasticity in monopoly is – Marks : 1.0
Id: 44990
1) One 2) Positive
3) Zero 4) Negative
Explanation:
Q27) In India duopoly exists in the following industry: Marks : 1.0
Id: 45235
1) Heavy Commercial Vehicles 2) Soft Drinks
3) Oral Care Products 4) Detergents
Explanation:
Q28) Which one of the following would be an example of market failure requiring Marks : 1.0
government interference? Id: 45024
1) Competition among businesses drives down 2) Negative externalities are generated by
the price of calculators so low that many business production polluting the
producers go bankrupt environment.
3) Mr. Bhati is offered 50 million per year to play 4) Consumers are influenced by advertising
basketball. convincing them to buy products they do not
need.
Explanation:
Q29)
is the example of mixed economy Marks : 1.0
Id: 44838
1) India 2) USA
Explanation:
Q30) If the demand curve is parallel to x axis, then elasticity of demand is Marks : 1.0
Id: 44941
1) Zero 2) One
3) Infinite 4) Greater than one
Explanation:
Q31) Infinite price elasticity is the characteristic of – Marks : 1.0
Id: 44976
Explanation:
Q32) The profit which the firm must earn if they are remain in the industry is called Marks : 1.0
Id: 45119
1) Marginal profit 2) Normal profit
3) Equi marginal profit 4) Dividend Procuring
Explanation:
Q33) Which of the alternatives to the modern theory of the firm holds that managers Marks : 1.0
attempt to meet some goal that is defined in terms of a specified level of sales, Id: 45156
profits, growth or market share?
1) Sales maximization model 2) Management utility maximization model
3) Satisficing model 4) Profit maximization model
Explanation:
Q34) Under inductive method the logic proceed from Marks : 1.0
Id: 44872
1) General to particular 2) Positive to normative
3) Normative to positive 4) Particular to general
Explanation:
Q35) Microeconomics is concerned with: Marks : 1.0
Id: 45131
1) The economy as a whole 2) The electronics industry
3) The study of individual economic behavior 4) The interactions within the entire economy
Explanation:
Q36) If the crossprice elasticity between two goods is negative, the two goods are likely Marks : 1.0
to be: Id: 45212
1) Substitutes 2) Complements
3) Necessities 4) Luxuries
Explanation:
Q37) Demand for a normal product may shift outwards if: Marks : 1.0
Id: 45227
1) Price decreases 2) The price of a substitute rises
3) The price of a complement rises 4) Income falls
Explanation:
Q38) In a free market economy, when consumers increase their purchase of a good and Marks : 1.0
the level of exceeds then price tends to rise. Id: 44873
1) Demand, supply 2) Supply, demand
3) Prices, demand 4) Profits, supply
Explanation:
Q39) Which statement is true of the basic economic problem? Marks : 1.0
Id: 45086
1) The problem will exist as long as resources 2) The problem exists only in less developed
are limited and desires are Unlimited. countries.
3) The problem will disappear as production 4) The advancement of technology will cause the
expands. problem to disappear
Explanation:
Q40) Economic cost = cost+ cost. Marks : 1.0
Id: 44846
1) Accounting , Explicit 2) Implicit , explicit
3) Accounting, outlay 4) Explicit, imputed
Explanation:
Q41) Market with one buyer and one seller is called Marks : 1.0
Id: 45000
3) Bilateral monopoly 4) None
Explanation:
Q42) Which of the following cost is not recorded in the books of account? Marks : 1.0
Id: 44834
1) Direct cost 2) Indirect cost
3) Opportunity cost 4) Explicit cost
Explanation:
Q43) Marginal revenue is equal to price for which one of the following types of market Marks : 1.0
structure? Id: 45246
1) Monopoly 2) Perfect Competition
Explanation:
Q44) Err:509 Marks : 1.0
Id: 44816
1) GAAT 2) IMF
Explanation:
Q45) Which among the followings means the cost of foregone opportunities? Marks : 1.0
Id: 38747
1) Discounting Principle 2) Opportunity Cost
3) Inventory Management 4) Principle of Time Perspective
Explanation:
Id: 44835
Explanation:
Q47) Demand for a commodity is defined as Marks : 1.0
Id: 45218
1) Want for the commodity 2) Quantity demanded for a particular commodity
backed by willingness to pay.
3) Desire for the commodity 4) Quantity demanded
Explanation:
Q48) The Law of Supply states that when the price of a commodity rises, the quantity Marks : 1.0
supplied . Id: 45202
1) Rises. 2) Falls.
3) Does not rise. 4) Does not fall
Explanation:
Q49) Managerial economics basically Marks : 1.0
Id: 38736
1) Positive Economics 2) Normative Economics
3) Positive and Normative both 4) Negative Economics
Explanation:
Q50) Homogeneity of the product is a characteristic feature of Marks : 1.0
Id: 45217
Explanation:
Q51) The coordinating mechanism in the economy of the price system was described by Marks : 1.0
Adam Smith as : Id: 45016
1) Visible hand 2) Invisible hand
3) Total Revenue 4) Profits
Explanation:
Q52) Full form of FDI is Marks : 1.0
Id: 44879
1) Fast direct investment 2) Foreign direct investment
3) Foreign division in India 4) Food direct Investment
Explanation:
Q53) Under perfect competition, price of the product Marks : 1.0
Id: 45002
1) Can be controlled 2) Cannot be controlled
3) Can be controlled with in certain limit 4) Controlled by firm only
Explanation:
Q54) The value of elasticity of demand ranges from Marks : 1.0
Id: 45280
3) Always zero 4) Zero to infinity
Explanation:
Q55) Efficient allocation of resources is likely to be achieved under Marks : 1.0
Id: 44995
Explanation:
Q56) The most basic assumption upon which the foundation of economics is based is that Marks : 1.0
Id: 45075
1) continued technological improvement is 2) private ownership of resources is necessary
necessary to stimulate essential economic for maximum economic growth
growth.
3) the market system is the best of all possible
production systems
4) society's resources are limited and unable to
satisfy unlimited wants
Explanation:
Q57) Economics is Marks : 1.0
Id: 44818
1) Science 2) Art
3) Both a and b 4) None of these
Explanation:
Q58) Price elasticity of cigarette is Marks : 1.0
Id: 44914
1) Less than one 2) More than one
3) One 4) Relatively elastic
Explanation:
Q59) Value maximization theory fails to address the problem of: Marks : 1.0
Id: 45161
1) Risk 2) Uncertainty
3) Sluggish growth 4) Selfserving management
Explanation:
Q60) Which of the following curve is horizontal? Marks : 1.0
Id: 44960
1) Variable cost 2) Fixed cost
3) Marginal cost 4) Total cost
Explanation:
Q61) Interdependencies is the feature of Marks : 1.0
Id: 45164
Explanation:
Q62) As per law of demand the relationship between price and demand is Marks : 1.0
Id: 45213
1) Direct. 2) positive.
3) Proportionate. 4) Inverse.
Explanation:
Q63) If consumer always spend 15% of their income on foods, then income elasticity of Marks : 1.0
demand for food is Id: 38768
1) 1.15 2) 0.15
3) 1 4) Impossible to determine
Explanation:
Q64) If labour has less elastic demand than capital, wages would be ______ than interest Marks : 1.0
Id: 45251
1) Less 2) More
3) Equal 4) None
Explanation:
Q65) Economic problem arises mainly due to specific reasons Marks : 1.0
Id: 45107
1) Human wants are unlimited and to satisfy 2) Human wants only
human wants are scarce
3) Enormous raising population only
4) Unlimited mobility of workers
Explanation:
Q66) Economic progress Marks : 1.0
Id: 45122
1) Reflects that people are achieving higher 2) Requires that individuals work longer hours.
income levels and living _x000D_ standards.
3) Implies scarcity is no longer a problem.
4) Indicates income levels are higher even
though environmental and health _x000D_
conditions have worsened.
Explanation:
Q67) The sensitivity of the change in quantity demanded to a change in price is called Marks : 1.0
Id: 38778
1) Income elasticity. 2) Crosselasticity. Price elasticity of demand.
Coefficient of elasticity.
3) Price elasticity of demand. 4) Coefficient of elasticity.
Explanation:
Q68) The scarcity or scientific or choice making definition of economics is stated by Marks : 1.0
Id: 44821
1) Adam smith 2) Samuelson
3) Robbins 4) Scumpeter
Explanation:
Q69) Income elasticity of demand for diamonds would be : Marks : 1.0
Id: 45252
1) 1 2) 0
3) >1 4) <1
Explanation:
Q70) Opportunity cost of machine producing only one product is Marks : 1.0
Id: 45282
1) Low 2) High
3) Infinite 4) Medium
Explanation:
Q71) Opportunity cost is best defined as: Marks : 1.0
Id: 45066
1) How an economy suffers when in recession? 2) The cost of decision expressed as next best
alternative
3) The cost of decision expressed in monetary 4) The financial costs association with the
terms production of goods and services.
Explanation:
Q72) A firm operating under conditions of perfect competition can: Marks : 1.0
Id: 45181
1) Determine the price of its product. 2) Promote the sales through effective
advertisement.
3) Determine only the size of its output. 4) Capture the market by cutting down the price.
Explanation:
Q73) In which type of economy can each producer allocate his resources based on the Marks : 1.0
demand? Id: 45020
1) Mixed economy 2) Market economy
3) Command economy 4) Regulated economy
Explanation:
Q74) Suppose a firm is selling 5 units of the output at the price of Rs.15 per unit. Now if it Marks : 1.0
wants to sell 6 units instead of 5 units and there by the price of the product falls to Id: 38801
Rs.14 then the marginal revenue will be
1) 14 2) 10
3) 15 4) 9
Explanation:
Q75) The study of agreements of economy is done through: Marks : 1.0
Id: 45117
3) Not Micro but with Macro 4) Theory of population
Explanation:
Q76) If two goods are perfect substitutes for each other , the cross elasticity between them Marks : 1.0
is – Id: 44921
1) Infinite 2) Zero
Explanation:
Q77) A business is said to be making _______ if its revenues exceed the accounting cost Marks : 1.0
Id: 45097
Explanation:
Q78) Which is the method of measuring GDP? Marks : 1.0
Id: 45079
1) Income method 2) Productivity method
3) Product persuasion method 4) Cumulative method
Explanation:
Q79) The discrimination pricing that attempts to take away the entire consumer surplus is Marks : 1.0
called degree price discrimination. Id: 44998
1) First 2) Second
3) Third 4) Fourth
Explanation:
Q80) Which among the following are known as the features of monopoly? Marks : 1.0
Id: 38794
1) Large number of buyers 2) Large number of sellers
3) Single seller 4) Price taker
Explanation:
Q81) Which of the following is the example of complementary goods? Marks : 1.0
Id: 44890
1) Tea and coffee 2) Tea and sugar
3) Ball pen and ink pen 4) Shoes and gold
Explanation:
Q82) In perfect competitive industries are Marks : 1.0
Id: 38790
Explanation:
Q83) Profit is the motive of – Marks : 1.0
Id: 44839
1) Mixed economy 2) Socialistic economy
3) Capitalistic economy 4) Centrally planned economy
Explanation:
Q84) Marginal cost change due to change in Marks : 1.0
Id: 44961
1) Total cost 2) Average cost
3) Variable cost 4) Quantity of output
Explanation:
Q85) Inequality of income is the characteristic of – Marks : 1.0
Id: 44841
Explanation:
Q86) Suppose a firm decides to increase its output. This may involve a rise in its total cost Marks : 1.0
by 30% and with an increase in output by 15% , then incremental cost is Id: 44869
1) 2% 2) 3%
3) ½ % 4) None of these
Explanation:
Q87) _________ is the study of economic actions of individuals and small groups of Marks : 1.0
individuals. Id: 45037
1) MicroEconomics 2) MacroEconomics
3) Managerial Economics 4) Business Economics
Explanation:
Q88) Economists who are concerned about the behavior of individual households, firms Marks : 1.0
and industries are studying: Id: 45070
1) Nanoeconomics 2) Microeconomics
3) Macroeconomics 4) Neoeconomics
Explanation:
Q89) When consumer’s income increases, demand for an inferior good . Marks : 1.0
Id: 45170
1) Increases. 2) Decreases.
Explanation:
Q90) For core food items demand is ________ _______. Marks : 1.0
Id: 45169
1) More elastic. 2) Less elastic.
3) Unitary elastic. 4) Not elastic.
Explanation:
Q91) Gross profit includes Marks : 1.0
Id: 45089
1) Overhead expenses + interest expense + taxes 2) Overhead expenses + interest expense taxes
3) Overhead expenses interest expense taxes 4) Overhead expenses interest expense + taxes
Explanation:
Q92) In India to some degree perfect competition exists in the following industry: Marks : 1.0
Id: 45237
1) Cement 2) Soaps and detergents
3) Rice Farming 4) Dental Care Products
Explanation:
Q93) What type of relationship exists between the price and quantity demanded? Marks : 1.0
Id: 45260
1) Direct. 2) Inverse.
3) Positive. 4) Normative.
Explanation:
Q94) Economics includes the following economic activity Marks : 1.0
Id: 45285
1) Production 2) Consumption
3) Exchange 4) All of the above
Explanation:
Q95) NNP at market price will be – Marks : 1.0
Id: 45084
1) GNP + cost of capital 2) GNP + cash
3) GNP at market prices – depreciation 4) GNP + dividend
Explanation:
Id: 45288
Explanation:
Q97) Opportunity cost include Marks : 1.0
Id: 44870
1) Implicit cost 2) Explicit cost
3) Both a and b 4) Neither a nor b
Explanation:
Q98) According to law of demand other things being equal , if the price of commodity falls Marks : 1.0
the quantity demanded of it will………………………… Id: 44891
1) Rise 2) Decrease
3) Increase 4) Fall
Explanation:
Q99) From society's point of view, the economic function of profits and losses is to: Marks : 1.0
Id: 45032
1) Promote the equal distribution of real assets 2) Achieve full employment and price level
and wealth stability
3) Contribute to a more equal distribution of 4) Reallocate resources from less desired to
income more desired uses
Explanation:
Q100) General theory of employment, interest, and money propounded by Marks : 1.0
Id: 44862
1) Keynes 2) Marshall
3) Marx 4) Knight
Explanation:
Q101) For the price taking firm – Marks : 1.0
Id: 44971
1) MR < price 2) MR = price
3) MR > price 4) Indeterminate relation between price and MR
Explanation:
Q102) It is the difference between total revenue and total economic cost Marks : 1.0
Id: 45148
1) Accounting Profit 2) Net Profit
Explanation:
Q103) Which best describes a demand curve? Marks : 1.0
Id: 45225
1) The quantity consumers would like to buy in 2) The quantity consumers are willing to sell
an ideal world
buy at each and every income all other things
unchanged
buy at each and every price all other things
unchanged
Explanation:
Q104) In the case of a straight line demand curve meeting the two axes , the price elasticity Marks : 1.0
of demand at the midpoint of the line would be – Id: 44910
1) Zero 2) One
Explanation:
Q105) Positive aspects of economics is concerned with Marks : 1.0
Id: 44826
1) What ought to be 2) What is
3) Ethical 4) Why economics
Explanation:
Q106) In law of demand, which is dependent and which is independent variable? Marks : 1.0
Id: 38771
1) Price is dependent demand is independent 2) Price is independent demand is dependent
variable
3) Price and demand both dependent 4) Price and demand both independent
Explanation:
Q107) The circular flow of goods and incomes show the Marks : 1.0
Id: 45138
1) Wages and salaries 2) Firms and households
3) Income and money 4) Goods and services
Explanation:
Q108) In perfectly competitive market a firm in the long run operates at Marks : 1.0
Id: 45255
1) AC=MC 2) AR=MR
3) MR=MC 4) P=AR=MR=AC=MC
Explanation:
Q109) Value judgment possible in Marks : 1.0
Id: 44828
1) Positive science 2) Normative science
3) Deductive method 4) Inductive method
Explanation:
Q110) The commodity whose demand is associated with the name of Sir Robert Giffen? Marks : 1.0
Id: 44938
1) Necessary goods 2) Luxury goods
3) Inferior goods 4) Ordinary goods
Explanation:
Q111) Unemployment means that: Marks : 1.0
Id: 38738
1) there is excess demand in the labour market. 2) at the going wage rate, there are people who
want to work but cannot find work
3) people are not willing to work at the going 4) there are some people who will not work at the
wage rate. going wage rate.
Explanation:
Q112) Which market both AR = MR? Marks : 1.0
Id: 38791
1) Competitive 2) Monopoly
Explanation:
Q113) A decrease in the supply of a good will tend to cause: Marks : 1.0
Id: 45197
1) an increase in the equilibrium price and 2) a decrease in the equilibrium price and
quantity quantity
3) a decrease in the equilibrium price and an 4) an increase in the equilibrium price and a
increase in the equilibrium quantity decrease in the equilibrium quantity
Explanation:
Q114) Graphical presentation of demand schedule Marks : 1.0
Id: 38762
1) Demand schedule 2) Demand curve
3) Demand law 4) Law of demand
Explanation:
Q115) “Economics is the enquiry into the nature and causes of wealth of nations” stated Marks : 1.0
by Id: 44822
1) Adam smith 2) Robbins
3) Amertya sen 4) Friderman
Explanation:
Q116) Cross elasticity between shoes and coldrink is – Marks : 1.0
Id: 44920
1) Infinite 2) Greater than zero
3) Greater than zero 4) Zero
Explanation:
Q117) If there is small change in price causes , an infinite change in demand, than elasticity Marks : 1.0
of demand is Id: 38780
3) Less than one. 4) Equal to infinite
Explanation:
Q118) In case of monopoly, demand curve is same as Marks : 1.0
Id: 44996
1) MR curve 2) AR curve
3) AC curve 4) MC curve
Explanation:
Q119) Economic goods are goods which: Marks : 1.0
Id: 45068
1) Obey the laws of economics 2) Are scarce and limited in supply
3) Are tangible 4) Are intangible
Explanation:
Q120) The income elasticity of demand: Marks : 1.0
Id: 45184
1) is positive for an inferior good 2) is negative for a normal good
3) is negative for an inferior good 4) is zero for an inferior good
Explanation:
Q121) Income flow is also known as Marks : 1.0
Id: 44864
1) Product flow 2) Money flow
3) Profit flow 4) Cash flow
Explanation:
Q122) Variation in demand means_x000D_ _x000D_ Marks : 1.0
Id: 45287
1) Change in demand when price 2) Change in demand when price is constant
changes_x000D_ _x000D_ _x000D_
3) Change in demand when other factor changes 4) All of the above
Explanation:
Q123) The father of economics is Marks : 1.0
Id: 44819
3) Keynes 4) Samuelson
Explanation:
Q124) The opportunity cost of a machine which can be produce only one product is Marks : 1.0
Id: 44866
1) Low 2) Infinite
3) One 4) Large
Explanation:
Q125) Economic profit refers to minus all relevant costs, both explicit and implicit. Marks : 1.0
Id: 45051
1) Profit 2) Cost
3) Expenses 4) Revenue
Explanation:
Q126) Law related to monopoly is – Marks : 1.0
Id: 44999
1) FERA 2) MRTP
3) IDRA 4) FEMA
Explanation:
Q127) The two basic markets shown by the simple circular flow model are Marks : 1.0
Id: 45063
1) Capital goods and consumer goods 2) Free and controlled.
3) Product and resource 4) Household and business
Explanation:
Q128) NNP equals to Marks : 1.0
Id: 45082
1) GNP – dividend 2) GNP – depreciation
3) GNP – gold 4) GNP – cost of capital
Explanation:
Q129) Identify fixed cost from the following – Marks : 1.0
Id: 44959
1) Labour cost 2) Electricity bill
3) Salary of watchman 4) Cost of raw material
Explanation:
Q130) Flows of the factor of production and the goods and services between the different Marks : 1.0
sector is Id: 44865
1) Real flow 2) Money flow
3) Cash flow 4) Product flow
Explanation:
Q131) Micro economic is considered as Marks : 1.0
Id: 44861
1) Static analysis 2) Dynamic analysis
3) Changing analysis 4) None of these
Explanation:
Q132) In a freemarket economy the allocation of resources is determined by Marks : 1.0
Id: 45060
1) Votes taken by consumers 2) A central planning authority
3) By consumer preferences 4) The level of profits of firms
Explanation:
Q133) deals with aggregate economic Marks : 1.0
Id: 44829
Explanation:
Q134) The demand curve shows Marks : 1.0
Id: 38767
1) the maximum amount consumers are willing to 2) the minimum amount consumers are willing to
pay for particular units of a good pay for particular units of a good
3) the average amount consumers are willing to 4) that consumers want to pay the lowest price
pay for particular units of a good
Explanation:
Q135) Scarcity can be avoided by making: Marks : 1.0
Id: 45069
1) needs unlimited 2) resources limited
3) wants and needs limited 4) wants unlimited
Explanation:
Q136) Cost is also known as explicit cost. Marks : 1.0
Id: 44844
3) Outlay 4) Sunk
Explanation:
Q137) All of the following are the characteristic of perfect competition except Marks : 1.0
Id: 44967
1) Uniform price 2) Large no. of buyers and sellers
3) Differentiated goods 4) Absence of transport coat
Explanation:
Q138) What is the shape of demand curve faced by firm under perfect competition? Marks : 1.0
Id: 44968
3) Positively sloped 4) Negatively sloped
Explanation:
Q139) Economics should be neutral between ends stated by – Marks : 1.0
Id: 44827
1) Robbins 2) Marshall
3) Pigou 4) Adam smith
Explanation:
Q140) The relationship between quantity supplied and price is _____ and the relationship Marks : 1.0
between quantity demanded and price is _____. Id: 45268
1) direct, inverse 2) inverse, direct
3) inverse, inverse 4) direct, direct
Explanation:
Q141) In a__________the decisions of a central planner are replaced by the decisions of Marks : 1.0
millions of firms and households. Id: 45101
1) Market economy 2) Business economy
3) Social economy 4) Plant economy
Explanation:
Q142) Economics is a science which deals with human wants and their satisfaction. Marks : 1.0
Id: 45052
1) Social 2) Political
3) Natural 4) Physical
Explanation:
Q143) Which Of The Following Economic Indicators Show Adverse Effect On The Stock Marks : 1.0
Market? Id: 45130
1) Low Domestic Saving 2) High Foreign Exchange Production
3) High Industrial Production 4) Low Interest Rate
Explanation:
Q144) The sensitivity of the change in quantity consumed of one product to a change in the Marks : 1.0
price of a related product is called Id: 38781
1) Crosselasticity. 2) Substitute elasticity.
3) Complementary elasticity. 4) Price elasticity of demand.
Explanation:
Q145) Law of supply states Marks : 1.0
Id: 38787
1) Inverse relation between price and demand 2) Inverse relation between price and supply
3) Direct relation between price and demand 4) Direct relation between price and supply
Explanation:
Q146) Adam Smith claims that for an economy to achieve mutual gains from voluntary Marks : 1.0
exchange it requires Id: 45023
1) consumers being considerate of their fellow 2) businesses maintaining good will in their
man business relations.
3) self interested behavior by consumers and 4) government interference with the market.
businesses.
Explanation:
Q147) A market with one seller is an example of: Marks : 1.0
Id: 45206
1) Monotony 2) Oligopoly
Explanation:
Q148) The word ‘economics’ comes from the Greek word for: Marks : 1.0
Id: 45039
1) Environment 2) One who manages a household
3) One who participates in the market 4) Conservation
Explanation:
Q149) When the price of a Giffen good falls, its quantity demanded . Marks : 1.0
Id: 45171
1) Rises. 2) Falls.
Explanation:
Q150) Select the group that best represents the basic factors of production. Marks : 1.0
Id: 45057
1) land, labor, capital, technology 2) land, natural resources, labor, capital
3) land, labor, capital, entrepreneurship 4) land, labor, money, management skills
Explanation:
Q151) Firms which engage in satisficing behavior are likely to be Marks : 1.0
Id: 45159
1) Leading firms in their industry 2) Innovative, risktakers, performing
satisfactorily
3) Conservative, riskaverse and performing 4) Growth maximizes
adequately
Explanation:
Q152) All of the following are determinants of supply EXCEPT: Marks : 1.0
Id: 45210
1) Price 2) Objectives of the firm
3) Income levels 4) Level of technology
Explanation:
Q153) Profits arise because the entrepreneurs introduce innovations stated by Marks : 1.0
Id: 44863
1) Schumpeter 2) Knight
3) Keynes 4) Robbins
Explanation:
Q154) In a free market Marks : 1.0
Id: 45134
1) Governments intervene 2) Governments plan production
3) Governments interfere 4) Prices adjust to reconcile scarcity and desires
Explanation:
Q155) Perfect competition, in long run firms earn Marks : 1.0
Id: 38795
Explanation:
Q156) Liberalization refers to Marks : 1.0
Id: 44884
1) Integration of the world economy 2) Transfer asset from public sector to private
sector
3) Relaxation of previous government restriction 4) All of these
Explanation:
Q157) SEBI stands for Marks : 1.0
Id: 44877
1) Securities and exchange board of India 2) Saving and earning board of India
3) Stock exchange board of India 4) Strategic and economic board of India
Explanation:
Q158) Rational decisionmaking under conditions of scarcity requires individuals to: Marks : 1.0
Id: 45177
1) place a monetary value on everything they do. 2) know the prices of all goods they might
possibly buy.
3) understand that they have to make choices, or 4) be constantly alert to price reductions on
tradeoffs desired products.
Explanation:
Q159) Which of the following laws states that the more a consumer consumes of a product, Marks : 1.0
the less is the utility he derives from the additional consumption? Id: 45261
1) Law of equilibriumMarginal utility. 2) Law of ordinal utility.
3) Law of cardinal utility. 4) Law of diminishing marginal utility.
Explanation:
Q160) The PrincipalAgent Problem arises when… Marks : 1.0
Id: 45031
1) The principal and the agent have different 2) The principal cannot decide whether the firm
objectives should seek to maximize the expected future
profits of the firm or maximize the price for
which the firm can be sold
3) The principal cannot enforce the contract with 4) Both a and c
the agent or finds it too costly to monitor the
agent
Explanation:
Q161) If an increase in consumer income leads to a decrease in the demand for good x, Marks : 1.0
then good x is: Id: 45196
1) a substitute 2) a complementary good
3) a inferior good 4) a normal good
Explanation:
Q162) What are the two sectors in two sector model of ‘circular flow’? Marks : 1.0
Id: 38739
1) Household sector & Business Sector 2) Household sector & Government Sector
3) Household sector & Foreign Sector 4) Household sector & Private Sector
Explanation:
Q163) If the supply of water bottled decreases , the equilibrium price and the Marks : 1.0
equilibrium quantity Id: 44952
1) Increases, decreases 2) Decreases, decreases
3) Decreases, increases 4) Increases, increases
Explanation:
Q164) What does monopolistic competition have in common with monopoly? Marks : 1.0
Id: 45277
1) Mutual interdependence 2) The ability to collude with respect to price
3) A large number of firms 4) A downwardsloping demand curve
Explanation:
Q165) Marginal utility analysis assumes: Marks : 1.0
Id: 45112
1) That utility can be measured 2) That utility cannot be quantified
3) The utility is static 4) None of the above
Explanation:
Q166) Per capita income is associated with Marks : 1.0
Id: 44831
3) Positive science 4) Mixed economy
Explanation:
Q167) The shape of demand curve in case of perfectly elastic is Marks : 1.0
Id: 44906
1) Vertical 2) Downward sloping
3) Horizontal 4) Upward sloping
Explanation:
Q168) Large no. of buyers and sellers are the characteristic of – Marks : 1.0
Id: 44977
Explanation:
Q169) Perfect competition is a market situation characterized by Marks : 1.0
Id: 45215
1) A single seller 2) Limited sellers
3) A large number of sellers 4) A few sellers
Explanation:
Q170) If the demand is more than supply , then the pressure on price will be – Marks : 1.0
Id: 44953
1) Upward 2) Downward
3) Constant 4) None of the above
Explanation:
Q171) The governor of Reserve bank of India is Marks : 1.0
Id: 44883
1) D. subbarao 2) Raghuram govind rajan
3) Bimal jalan 4) None of these
Explanation:
Q172) Elasticity is when the percentage change in quantity demanded is less Marks : 1.0
than the percentage change in price. Id: 44916
Explanation:
Q173) Price elasticity of salt is Marks : 1.0
Id: 44907
1) Perfectly elastic 2) Unitary elastic
3) inelastic 4) relatively elastic
Explanation:
Q174) Which of the following features is NOT seen in imperfect competition? Marks : 1.0
Id: 45178
1) Product differentiation 2) Price wars
3) All goods are homogeneous 4) All goods are heterogeneous
Explanation:
Q175) RBI stands for Marks : 1.0
Id: 44876
1) Reverse bank of India 2) River bank of India
3) Reserve bank of investment 4) None of these
Explanation:
Q176) Market demand is aggregation of individual demand Marks : 1.0
Id: 38761
1) Vertically 2) Horizontally
3) Parallel 4) Diagonally
Explanation:
Q177) In perfect competitive firms are Marks : 1.0
Id: 38789
Explanation:
Q178) The interaction of individuals and firms in a market can be described as a Marks : 1.0
of money, goods and services and resources through product and factor markets. Id: 45050
1) Constant Flow 2) Stable Flow
3) Circular Flow 4) Regular Flow
Explanation:
Q179) Accounting profit is arrived at when explicit costs are subtracted from Marks : 1.0
Id: 45145
1) Total revenue 2) Explicit cost
3) Implicit cost 4) Total cost
Explanation:
Q180) With a favourable government policy towards agriculture and good monsoon Marks : 1.0
conditions, the agricultural supply will in spite of average price of agricultural Id: 45175
goods remaining constant.
1) Increase. 2) Decrease.
3) Not change. 4) Either increase or decrease
Explanation:
Q181) Which among the following is economics theory/principles? Marks : 1.0
Id: 38745
1) Law of diminishing marginal utility 2) Newton’s law
3) E= MC2 4) Theory of gravity
Explanation:
Q182) The price elasticity of demand for hamburger is – Marks : 1.0
Id: 44903
1) The change in quantity demanded of 2) The percentage increase in the quantity
hamburger when hamburger increases by 30 demanded of hamburger when the price of
paisa per rupee hamburger falls by 1 per cent per rupee
3) The increase in the price of the hamburger 4) The decrease in the quantity demanded of
when the price of hamburger falls by 10 per hamburger when the price of the hamburger
cent per rupee falls by 1 per cent per rupee
Explanation:
Q183) The "law of demand" is illustrated by a Marks : 1.0
Id: 45247
1) movement along the demand curve. 2) leftward shift of the demand curve.
3) rightward shift of the demand curve. 4) Both answers A and B are correct.
Explanation:
Q184) There is no difference between firm and industry in Marks : 1.0
Id: 44980
Explanation:
Q185) What is the ‘Economic Problem’? Marks : 1.0
Id: 45038
1) The problem that high exchange rates deter 2) Having high levels of unemployment
exports
3) Matching endless wants with limited resources
4) The fact that economies often go into
recession
Explanation:
Q186) A firm enjoys maximum control over the price of its product under Marks : 1.0
Id: 44992
Explanation:
Q187) Factors of production are Marks : 1.0
Id: 45151
1) Inputs into the production process. 2) Weather, social, and political conditions that
affect production.
3) The physical relationships between economic 4) The mathematical calculations firms make to
inputs and outputs. determine production.
Explanation:
Q188) Which of the following statements regarding elasticity of demand is TRUE? Marks : 1.0
Id: 45243
1) Elasticity always has a negative value 2) Elasticity can be positive or negative
3) Elasticity always has a positive value 4) Elasticity can never be zero
Explanation:
Q189) National income is Marks : 1.0
Id: 45077
1) The net output of commodities and services 2) The net interest
flowing during a year from the countries
productivity system
3) The dividend
4) The net depreciation
Explanation:
Q190) Inflation refers to: Marks : 1.0
Id: 45126
1) Rising Prices 2) Reduces Money Supply
3) Increased demand 4) Increased supply
Explanation:
Q191) A decrease in income should: Marks : 1.0
Id: 45228
1) Shift demand for an inferior product inwards 2) Shift demand for an inferior product outwards
3) Shift supply for an inferior product outwards 4) Shift supply for an inferior product inwards
Explanation:
Q192) Elasticity of demand is greater than 1 implies that demand is . Marks : 1.0
Id: 45221
3) Relatively elastic. 4) Relatively inelastic.
Explanation:
Q193) Single buyer is the characteristic of – Marks : 1.0
Id: 44978
3) Duopoly 4) None of these
Explanation:
Q194) In monopolistic competition, firms achieve some degree of market power: Marks : 1.0
Id: 45186
1) Because of barriers to entry into the industry 2) Because of barriers to exit from the industry
3) By producing differentiated products 4) By virtue of size alone
Explanation:
Q195) A fall in price: Marks : 1.0
Id: 45226
1) Will cause an inward shift of demand 2) Will cause an outward shift of supply
3) Leads to a movement along a demand curve 4) Leads to a higher level of production
Explanation:
Q196) “Money is what Money does “ , was the definition of Money given by : Marks : 1.0
Id: 45124
1) Walker 2) Robbinson
3) Pigou 4) Coulborn
Explanation:
Q197) What is the nature of supply curve? Marks : 1.0
Id: 38788
1) Positive slope 2) Negative slope
3) Natural slope 4) Downward slope
Explanation:
Q198) Because of the Law of Supply, supply curves: Marks : 1.0
Id: 45209
1) slope downward. 2) slope upwards.
3) are perfectly vertical. 4) are perfectly horizontal.
Explanation:
Q199) In economics financial year is called: Marks : 1.0
Id: 45041
1) Accounting Year 2) Financial Year
3) Fiscal Year 4) Monetary Year
Explanation:
Q200) For a monopoly, marginal revenue is equal to Marks : 1.0
Id: 45194
1) The price of the product 2) The amount people buy between two prices
3) The amount people buy at a given price 4) The change in total revenue brought about by
a oneunit increase in quantity sold
Explanation:
Q201) Which one of the following is an example of an externality, a market shortcoming Marks : 1.0
which requires government interference? Id: 45026
1) A majority of Punekar are overweight because 2) Bhati gets paid more than Rs.25 million per
they have unhealthy diets. year to play basketball.
3) Excessive pollution generated by business 4) Successful advertising convinces consumers
production is damaging the environment. to buy products they cannot afford and do not
need.
Explanation:
Q202) Equilibrium refers to a market situation where Marks : 1.0
Id: 44950
1) Quantity supplied is equal to quantity 2) Quantity supplied is greater than quantity
demanded demanded
3) Quantity demanded is at its lowest point 4) Demand curve intersect the supply curve at its
lowest point.
Explanation:
Q203) Meaning of micro economics Marks : 1.0
Id: 38734
Explanation:
Q204) In perfect competition, D= 20 3pp2 and the supply curve is S= p1, where p is price, Marks : 1.0
D is demand and S is Supply, find the equilibrium price and equilibrium quantity. Id: 45165
1) 4 and 5 2) 3 and 2
3) 6 and 7 4) 5 and 4
Explanation:
Q205) The author of “ An essay on the nature and significance of economic science” – Marks : 1.0
Id: 44857
3) Robbins 4) Hicks and Allen
Explanation:
Q206) If new firms enter a monopolistically competitive market, the demand curves for the Marks : 1.0
existing firms will: Id: 45176
1) Shift to the left and become more price 2) Shift to the left and there will be no change in
inelastic price elasticity
3) Shift to the left and become more price elastic 4) Shift to the right and there will be no change in
price elasticity
Explanation:
Q207) Demand for the commodity depends on Marks : 1.0
Id: 44926
1) Price of the commodity 2) Price of the related goods
3) Income 4) All of the above
Explanation:
Q208) Which among the followings is known as the owners of factors of production in the Marks : 1.0
‘circular flow’? Id: 38740
1) Household 2) Business
3) Government 4) Foreign
Explanation:
Q209) Human wants are – Marks : 1.0
Id: 44823
1) Unlimited 2) Limited
3) Scarce 4) Fully satisfied
Explanation:
Q210) Adam smith’s wealth of nations published in Marks : 1.0
Id: 44859
1) 1776 2) 1931
3) 1808 4) 1775
Explanation:
Q211) If technology improves significantly, it will have a impact on the quantity Marks : 1.0
supplied of a commodity. Id: 45203
3) Small. 4) Large.
Explanation:
Q212) Robbins emphasized on – Marks : 1.0
Id: 44824
1) Normative aspect of science 2) Positive aspect of science
3) Negative aspect of science 4) Non Material aspect of science
Explanation:
Q213) Assume that in the market for goods Z there is simultaneous increase in demand and Marks : 1.0
the quantity supplied. the result will be – Id: 44956
1) An increase in equilibrium price and quantity 2) A decrease in equilibrium price and quantity
3) An increase in equilibrium quantity and price 4) Decrease in equilibrium price and quantity
remains same remains same.
Explanation:
Q214) Optimization means Marks : 1.0
Id: 38756
1) Maximization 2) Minimization
3) Maximization of profit 4) It depends, the situation, sometimes
maximization and sometimes minimization
Explanation:
Q215) What is original price of a commodity when price elasticity is 0.71 and demand Marks : 1.0
changes from 20 units to 15 units and new price is Rs. 10. Id: 38769
1) 15 2) 10
3) 8 4) 20
Explanation:
Q216) The word economics derived from – Marks : 1.0
Id: 44817
1) Greek words 2) Italian words
3) Sanskrit words 4) Spanish words
Explanation:
Q217) Product differentiation is the form of Marks : 1.0
Id: 45012
1) Price discrimination 2) Non price competition
3) Collusive oligopoly 4) Price leadership
Explanation:
Q218) The degree of is also known as concentration of economic power. Marks : 1.0
Id: 45013
Explanation:
Q219) When be Analyse the problem of economy as a whole it is a study of : Marks : 1.0
Id: 45116
3) Both Macro and Micro Economics. 4) None of these
Explanation:
Q220) There are branches of economics Marks : 1.0
Id: 44843
1) 2 2) 4
3) 5 4) 3
Explanation:
Q221) If a product is a Veblen good: Marks : 1.0
Id: 45229
1) Demand is inversely related to income 2) Demand is inversely related to price
3) Demand is directly related to price 4) Demand is inversely related to the price of
substitutes
Explanation:
Q222) Income elasticity of necessity goods Marks : 1.0
Id: 44936
Explanation:
Q223) If AR = AC, the firm will get Marks : 1.0
Id: 44979
1) Abnormal profit 2) Normal profit
3) Loss 4) No profit no loss
Explanation:
Q224) Theory of investment is a part of – Marks : 1.0
Id: 44860
1) Micro economics 2) Price theory
3) Income theory 4) Positive science
Explanation:
Q225) The supply of a good refers to Marks : 1.0
Id: 38786
1) Actual production of the good 2) Total existing stock of the good
3) Stock available for the sale 4) Amount of the good offered for sale at a
particular price per unit of time
Explanation:
Q226) The demand for Cheerios cereal is more priceelastic than the demand for cereals as Marks : 1.0
a whole. This is best explained by the fact that: Id: 45266
1) Cheerios are a luxury. 2) . cereals are a necessity._x000D_ c.
3) there are more substitutes for Cheerios than 4) consumption of cereals as a whole is greater
for cereals as a whole. than consumption of Cheerios.
Explanation:
Q227) The Law of Supply states that as the price of a product increases: Marks : 1.0
Id: 45242
1) consumers will buy less of the product. 2) sellers will offer less of the product for sale.
3) sellers will offer more of the product for sale. 4) new buyers will enter the market because the
product appears popular.
Explanation:
Q228) The study of economic actions of individuals and small groups of individuals is Marks : 1.0
known as Id: 45284
1) Macroeconomics 2) Microeconomics
3) Both a and b 4) None of the above
Explanation:
Q229) Homogeneous or differentiated product is the feature of – Marks : 1.0
Id: 45003
Explanation:
Q230) Which of the following is a cartel? Marks : 1.0
Id: 44997
1) UNO 2) IMF
3) EEC 4) OPEC
Explanation:
Q231) Kinked demand curve is related to Marks : 1.0
Id: 38799
Explanation:
Q232) Suppose demand is expressed as QD = 300 50P. If we want to make this equation Marks : 1.0
consistent with the typical supply and demand diagram, this equation must be stated Id: 38804
as;
1) P = 300 50Q 2) P = 6 .02Q
3) P = 50 300Q 4) Q = 6 .02P
Explanation:
Q233) Fiscal year of India is recorded as: Marks : 1.0
Id: 45045
1) 1st January to 31st December 2) 1st June to 31st May
3) 1st April to 31st March 4) 1st September to 31st August
Explanation:
Q234) Principal agent problem arises because Marks : 1.0
Id: 45014
1) Objectives of principles are not met by the 2) Objectives of principles are met by the
managers managers
3) Objectives of managers are met by the agents 4) Objectives of managers are not met by the
agents
Explanation:
Q235) Negative sloped with higher elasticity demand curve is related to Marks : 1.0
Id: 44987
1) Perfect competition 2) Mopolistic competition
Explanation:
Q236) The firm has no control over the price of the product in which of the following market Marks : 1.0
structures Id: 45279
Explanation:
Q237) Demand for a product is best defined as Marks : 1.0
Id: 45214
1) Various quantities that are demanded by 2) Total quantity of a product demanded at a
consumers particular price in the market during a given
period of time
3) Total quantity of a product demanded during a 4) Various amounts desired by consumers.
given period of time.
Explanation:
Q238) Which of the following is a barrier to entry that typically results in monopoly? Marks : 1.0
Id: 45188
1) The firm controls the entire supply of the raw 2) Production of the industry’s product is subject
material to economies of scale
3) The firm holds an exclusive government 4) Production of this product needs a large
regulation capital investment
Explanation:
Q239) Identify the factor which generally keeps the price elasticity of demand for a good Marks : 1.0
low Id: 44915
1) Variety of uses for that goods 2) Its low price
3) Close substitute for that good 4) High proportion of consumer income spent on
it
Explanation:
Q240) .__________ includes all payment paid to factors of production and opportunity cost. Marks : 1.0
Id: 45262
1) Implicit costs. 2) Explicit costs.
3) Economic costs. 4) Accounting costs.
Explanation:
Q241) The theory of Invisible hand is given by Marks : 1.0
Id: 45055
1) Samuelson 2) Peter Drucker
Explanation:
Q242) Which of the following is not a micro economic problem? Marks : 1.0
Id: 44836
3) For whom to produce 4) Where to produce
Explanation:
Q243) In monopolistic competition, a firm: Marks : 1.0
Id: 45232
1) Has no market power. 2) Captures significant economies of scale
3) Has a downwardsloping demand curve. 4) Has a standardized product that all firms
produce
Explanation:
Q244) The point where the total revenue line crosses the total cost line called Marks : 1.0
Id: 45211
1) Point of inflection 2) Breakeven point
3) Equilibrium point 4) Split of point
Explanation:
Q245) Economics is concerned with: Marks : 1.0
Id: 45065
1) earning as much money as possible. 2) limiting individuals' wants so that our scarce
resources will not be used up.
3) using scarce resources to satisfy virtually 4) using as many workers as possible to produce
limitless material wants and needs. any given level of output.
Explanation:
Q246) Numerical value of relatively inelastic is – Marks : 1.0
Id: 44905
1) Zero 2) Infinite
Explanation:
Q247) The upper portion of kinked demand curve is relatively Marks : 1.0
Id: 45001
1) More inelastic 2) More elastic
3) Less elastic 4) Inelastic
Explanation:
Q248) The president of 13th finance commission is Marks : 1.0
Id: 44882
1) Vijay bhatkar 2) Vijay kelkar
3) P Chidambaram 4) Manmohan singh
Explanation:
Q249) The incomes received by entrepreneurs, by labor, and by the owners of land and of Marks : 1.0
capital resources are, respectively: Id: 45074
1) rents, wages, interest and profits. 2) wages, rents, profits and interest.
3) profits, wages, rents, and interest 4) interest, rents, wages, and profits.
Explanation:
Q250) Managerial economics consists of the use of economic modes of thought to analyze Marks : 1.0
Id: 44868
business situation stated by –
1) Mansfield 2) Spencer
3) McNair and Merriam 4) Adam smith
Explanation:
Q251) Which is correct statement about GNP? Marks : 1.0
Id: 45081
1) Wages + dividend 2) Capital + Assets – depreciation
3) GNP at market price = GDP + cost of capital 4) GNP at factor cost = GNP at market price –
indirect taxes + subsidies
Explanation:
Q252) In the circularflow diagram, Marks : 1.0
Id: 45152
1) Firms are sellers in the resource market and 2) Households are sellers in the resource market
the product market.
3) Firms are buyers in the product market.
4) Spending on goods and services flow from
firms to households.
Explanation:
Q253) Which of the following statement is incorrect? Marks : 1.0
Id: 45103
1) Inflation : An increase in the overall level of 2) Productivity : The amount of goods and
prices in the economy services produced from each hour of a
worker’s time
3) Phillips curve: A curve that show the short run 4) Balance of Payment : which payment is
tradeoff between inflation and unemployment balanced in EXIM policy
Explanation:
Q254) Monopolist charge high price in the market in which elasticity is Marks : 1.0
Id: 45008
1) Small 2) Large
3) Infinite 4) Positive
Explanation:
Q255) Principle deals with the allocation of available resources among the Marks : 1.0
alternative activities. Id: 44871
1) Equi marginal principle 2) Discounting principle
3) Time perspective principle 4) Incremental principle
Explanation:
Q256) When income of a consumer rises, the demand for inferior goods . Marks : 1.0
Id: 45166
1) Rises. 2) Falls.
3) Does not change. 4) Either rises or falls
Explanation:
Q257) Which of the following combination is correct? Marks : 1.0
Id: 44878
1) IMF International monetary fund established 2) WTO World trade organization established in
in 1946 1995
3) IBRD International bank of reconstruction and 4) All of these
development also known as world bank
Explanation:
Q258) A market in which firms can enter and leave so easily that firms in the market face Marks : 1.0
competition from potential entrants is called a Id: 38764
1) Monopoly 2) Cartel
3) Contestable market 4) Limit pricing market
Explanation:
Q259) Which of the following is not the characteristic of a price taker? Marks : 1.0
Id: 44969
1) TR = P* Q 2) AR = PRICE
3) MR =AR =PRICE = DEMAND 4) Negatively sloped demand curve
Explanation:
Q260) The factor of production that organizes economic activity and bears the risk in a Marks : 1.0
business venture is: Id: 45073
1) Labor. 2) Entrepreneur
3) Capital. 4) Land
Explanation:
Q261) There are …………. types of price elasticity. Marks : 1.0
Id: 44904
1) Five 2) Four
3) Four 4) One
Explanation:
Q262) Who advocated economics is a science of choice? Marks : 1.0
Id: 38737
1) Pigou 2) Fisher
3) Robbins 4) Say
Explanation:
Q263) The kinked demand model explained Marks : 1.0
Id: 44989
1) Price flexibility 2) Price rigidity
3) Demand flexibility 4) Demand rigidity
Explanation:
Q264) Assume that when price is Rs. 20 the quantity demanded is 15 units, and when price Marks : 1.0
is increase by Rs. 3, the quantity demanded is 16 units. What is the marginal Id: 44958
revenue?
1) 18 2) 16
3) 12 4) 252
Explanation:
Q265) Which of the following method of forecasting is related to economic indicator? Marks : 1.0
Id: 44944
1) Barometric method 2) Regression
3) Trend projection method 4) Buyers intention method
Explanation:
Q266) Complementary goods like tea and sugar have a ________ cross elasticity: Marks : 1.0
Id: 45185
1) Zero 2) Negative
3) Positive 4) Infinity
Explanation:
Q267) As a rise in the price of ink pen, its effect on ink explained as a Marks : 1.0
Id: 44932
1) Increase in the price of ink 2) Increase in the demand of ink
3) Expansion in the quantity demanded of ink 4) Decrease in the demand of ink
Explanation:
Q268) If the price of orange juice increases, the demand for apple juice will ……… Marks : 1.0
Id: 44901
3) Remains the same 4) Becomes negative
Explanation:
Q269) Sales maximization means Marks : 1.0
Id: 44848
1) Maximization of total revenue 2) Sale of large quantity of output
3) Increase the selling price 4) Minimize the cost
Explanation:
Q270) Economics is concerned with tradeoffs caused by scarcity. "Tradeoffs" refers to: Marks : 1.0
Id: 45022
1) recycling old goods into new goods to reduce 2) the alternatives given up when making
the scarcity problem. choices.
3) the buying and selling that occurs when 4) the decisions about whether households or
unwanted goods are exchanged for goods that businesses should bear the entire burden of
are desired. the scarcity problem.
Explanation:
Q271) If the proportionate change in demand is exactly equal and proportionate to the Marks : 1.0
change in price than elasticity of demand is Id: 38779
3) Less than one. 4) Equal to one.
Explanation:
Q272) GNP: Marks : 1.0
Id: 45080
1) Is the total of cash, capital, production and 2) Is the total capital
gold
3) Is the total of gold
4) Is the total measure of the flow of goods and
services at market value + income from abroad
Explanation:
Q273) Who is the mother of economics? Marks : 1.0
Id: 38733
1) Resources 2) Wife of Smith
3) Scarcity 4) Money
Explanation:
Q274) EBT or Net Profit Before Tax equals Marks : 1.0
Id: 45091
1) Sales revenue + cost of goods sold +all 2) Sales revenue +cost of goods sold all
expenses except for taxes expenses except for taxes
3) Sales revenue cost of goods sold +all 4) Sales revenue cost of goods sold +all
expenses includes taxes expenses except for taxes
Explanation:
Q275) An economy is said to be efficient if Marks : 1.0
Id: 45153
1) It is possible to produce more of all goods. 2) It is possible to produce more of one good
without producing less of another.
3) It is not possible to produce more of one good 4) It is not possible to produce more of one good
without producing less of another. at any cost
Explanation:
Q276) Petrol and Bikes are: Marks : 1.0
Id: 45207
1) Independent commodities 2) Complementary goods
3) Substitute goods 4) Identical goods
Explanation:
Q277) Which of the following sector is not include in the circular flow of income in a three Marks : 1.0
sector economy. Id: 44867
1) Household 2) Firms
3) Government 4) Foreign market
Explanation:
Q278) Generally the demand curve has Marks : 1.0
Id: 45273
1) A slope downwards from left to right 2) A constant slope
3) A slope upwards from right to left 4) A positive slope
Explanation:
Q279) is the example of mixed economy Marks : 1.0
Id: 45289
1) India 2) USA
Explanation:
Q280) The value of price elasticity of demand ranges from Marks : 1.0
Id: 44929
3) Zero to infinity 4) One to zero
Explanation:
Q281) Managerial economics adopts the scientific approach of economic analysis, but Marks : 1.0
which is not involved with the following? Id: 45105
1) Reasoning for economic events and behaviour 2) Policies of macro economy
of business
Explanation:
Q282) Which of the following is micro aspect? Marks : 1.0
Id: 44832
1) Inflation in the economy 2) Lock out in TELCO
3) Unemployment 4) Depreciate the home currency
Explanation:
Q283) An increase in the demand for a good will tend to cause: Marks : 1.0
Id: 45198
1) a decrease in the equilibrium price and 2) an increase in the equilibrium price and
quantity quantity
3) an increase in the equilibrium price and a 4) a decrease in the equilibrium price and an
decrease in the equilibrium quantity increase in the equilibrium quantity
Explanation:
Q284) Economics is the study of Marks : 1.0
Id: 45135
1) Production technology 2) Consumption decisions
3) How society decides what, how and for whom 4) The best way to run society
to produce
Explanation:
Q285) A monopolistically competitive firm that is incurring a loss will produce as long as Marks : 1.0
the price that the firm charges is sufficient to cover: Id: 45259
1) advertising costs 2) marginal costs
3) fixed costs. 4) variable costs
Explanation:
Q286) When we know the quantity of a product that buyers wish to purchase at each Marks : 1.0
possible price, we know Id: 45133
1) Demand 2) Supply
3) Excess demand 4) Excess supply
Explanation:
Q287) The government unit that wants to achieve "revenue enhancement" will find it Marks : 1.0
considerably more favorable to enact an excise tax on products whose demand is Id: 38782
1) Highly elastic. 2) Relatively elastic.
3) Highly inelastic. 4) Unitary elastic
Explanation:
Q288) When the price of petrol goes up, demand for automobiles decreases. It is implies Marks : 1.0
that the petrol & automobiles are......................... Id: 45258
1) Substitute goods 2) complementary goods
3) Inferior goods 4) Normal goods
Explanation:
Q289) In perfect competition, the price of the product is determined where the industry Marks : 1.0
Id: 45204
1) Elasticity of supply equals the industry 2) Supply curve and industry demand curve
elasticity of demand intersect.
3) Fixed cost is zero. 4) Average variable cost equals the industry
average total cost
Explanation:
Q290) Price discrimination is possible Marks : 1.0
Id: 44983
1) Only under monopoly situation 2) Under any market form
3) Only under monopolistic competition 4) Only under perfect competition
Explanation:
Q291) The regulatory mechanism of the market system is Marks : 1.0
Id: 45062
1) Selfinterest 2) Private property
3) Competition 4) Specialization
Explanation:
Q292) Assume that consumer’s incomes and the number of seller in the market for good A Marks : 1.0
both decrease. Based upon this information, we can conclude, with certainty, that the Id: 44955
equilibrium
1) Price will increase 2) Price will decrease
3) Quantity will increase 4) Quantity will decrease
Explanation:
Q293) Which of the following emphasized on normative aspect of science – Marks : 1.0
Id: 44825
3) Adam smith 4) Both a and b
Explanation:
Q294) Which is the correct statement? Marks : 1.0
Id: 45098
1) Accounting profit differs from economic profit 2) No difference between accounting cost and
economic cost.
3) Accounting cost is equal to opportunity cost 4) Opportunity cost is same as Economic Profit.
Explanation:
Q295) The sale of fastrack watch is a common in a situation of – Marks : 1.0
Id: 44991
Explanation:
Q296) Which of the following condition is not an essential condition of pure competition? Marks : 1.0
Id: 44965
1) Large no. of buyers and sellers 2) Homogeneous product
3) Freedom of entry 4) Absence of transport cost
Explanation:
Q297) “Economics is the study of administration of scare resources and of the Marks : 1.0
determinants of income and employments “. This definition of economics is given Id: 45115
by:
1) Robbinson 2) Keynes
3) Marshall 4) Adam Smith
Explanation:
Q298) When the price of a product is increased 10 percent, the quantity demanded Marks : 1.0
decreases 15 percent. In this range of prices, demand for this product is: Id: 45265
3) Crosselastic. 4) Unitary elastic.
Explanation:
Q299) What is income elasticity of demand , when income changes by 20% and demand Marks : 1.0
changes by 40% Id: 44937
1) ½ 2) 2
3) 3 4) 0.33
Explanation:
Q300) Retained Earnings equals Marks : 1.0
Id: 45093
1) Earnings After Tax (or Net Profit After Tax) 2) Earnings After Tax (or Net Profit After Tax) +
payable dividends payable dividends
3) Earnings After Tax + payable dividends 4) Net Profit After Tax + payable dividends
Explanation:
Q301) Test marketing result may not be correct, because Marks : 1.0
Id: 44939
1) Price elasticity of product is high 2) Events during the period not under control
3) Sample does not represent the population 4) Due misguide by panel of experts
where product is introduced
Explanation:
Q302) Triple identity in macroeconomics stands for Marks : 1.0
Id: 38758
1) O= I= E 2) A=B=C
3) X=Y=Z 4) M=N=P
Explanation:
Q303) The demand curve faced by a competitive firm is: Marks : 1.0
Id: 45234
1) Downward sloping, with the same elasticity as 2) Perfectly elastic at the established market
the industry demand curve. price
3) More inelastic than the demand curve faced by 4) Nonexistent.
its competitors.
Explanation:
Q304) A firm operating under conditions of perfect competitions can Marks : 1.0
Id: 45270
1) Determine the price of its product. 2) Capture the market by cutting down the price.
3) Determine only the size of its output. 4) Promote the sales through effective
advertisement.
Explanation:
Q305) Group behavior and interdependence is the characteristic of Marks : 1.0
Id: 45010
Explanation:
Q306) Historical data is used in estimating future demand under Marks : 1.0
Id: 38775
1) Survey method. 2) Expert opinion method.
3) Statistical method. 4) Complete Enumeration method.
Explanation:
Q307) Which profit the firm tries to maximize? Marks : 1.0
Id: 38757
1) Economic profit 2) Account profit
3) Opportunity profit 4) Average profit
Explanation:
Q308) When the full employment is reached it will lead to : Marks : 1.0
Id: 45127
1) Deflation 2) Inflation
3) Market welfare 4) None of them
Explanation:
Q309) The ABC Ltd. produces television . An economist working for the firm predicts that 'if Marks : 1.0
people's incomes rise next year, then the demand for our television will increase. The Id: 45191
accuracy of the economist's prediction depends on whether the television ABC Ltd.
produce:
1) are normal goods 2) have few complementary goods
3) have few substitutes 4) have many complementary goods
Explanation:
Q310) The demand curve of monopoly firm will be – Marks : 1.0
Id: 44974
1) Upward sloping 2) Downward sloping
Explanation:
Q311) An expected increase in future price of a good Marks : 1.0
Id: 45200
1) has no effect on either its demand or its 2) decreases its demand.
supply.
3) increases its demand.
4) increases its supply.
Explanation:
Q312) A firm and industry are same under Marks : 1.0
Id: 45216
Explanation:
Q313) Economic profit = total revenue – Marks : 1.0
Id: 44852
3) Explicit cost 4) Accounting cost
Explanation:
Q314) All of the following are the exceptions of the law of demand except Marks : 1.0
Id: 44895
1) Giffen goods 2) Future expectation about prices
3) Demand for necessities 4) Demand for substitute goods
Explanation:
Q315) Consumers are likely to get a variety of goods under Marks : 1.0
Id: 44994
3) Imperfect competition 4) Oligopoly
Explanation:
Q316) Which of the following is not true about perfect competition? Marks : 1.0
Id: 45239
1) The demand curve is also the firm’s marginal 2) The demand curve slopes downwards.
revenue curve.
3) Free entry and exit.
4) Perfect knowledge among buyers and sellers
Explanation:
Q317) When excess demand occurs in an unregulated market, there is a tendency for: Marks : 1.0
Id: 38746
1) price to fall. 2) price to rise.
3) quantity demanded to increase. 4) quantity supplied to decrease.
Explanation:
Q318) Microeconomics is NOT concerned with the behavior of: Marks : 1.0
Id: 45053
1) Consumers 2) Aggregate demand
3) Firms 4) Industries
Explanation:
Q319) If demand increase due to increase in the income of consumer and at the same times Marks : 1.0
supply remains the same. equilibrium price and quantity demanded will be – Id: 44954
1) Increase, decrease 2) Decrease, decrease
3) Increase, increase 4) Decrease , increase
Explanation:
Q320) an economy that allocates resources through the decentralized decisions of many Marks : 1.0
firms and households as they interact in markets for goods and services is called as Id: 45099
1) Market Economy 2) Business Economy
3) Social Economy 4) Economies of Scale
Explanation:
Q321) The kinked demand curve model assumes that a firm's rivals will Marks : 1.0
Id: 38765
1) Follow the firm's price decreases but not its 2) Not follow any of the firm's price changes.
price increases
3) Follow any price change the firm makes.
4) Follow the firm's price increases but not its
price decreases.
Explanation:
Q322) It is defined as the difference between total revenue and total economic cost Marks : 1.0
Id: 45146
1) Economic profit 2) Gross profit
3) Accounting profit 4) Operating profit
Explanation:
Q323) The concept of choice would become irrelevant if Marks : 1.0
Id: 38735
1) capital were eliminated. 2) we were dealing with a very simple, one
person economy
3) scarcity were eliminated. 4) poverty were eliminated.
Explanation:
Q324) In the short run, the monopolist Marks : 1.0
Id: 44984
1) Incurs a loss 2) Abnormal profit
3) Makes a profit 4) Any of the above
Explanation:
Q325) Managerial economics is concerned with the problem of Marks : 1.0
Id: 45054
1) An individual firm. 2) An economy.
3) An industry. 4) Global economy.
Explanation:
Q326) Managerial economics is also called Marks : 1.0
Id: 38741
1) Applied Economics 2) Basic Economics
3) Macro Economics 4) Both ‘a’ and’ b’
Explanation:
Q327) A single point on the demand curve shows Marks : 1.0
Id: 45272
1) Demand and supply relationship 2) Price and demand relationship
3) Price and supply relationship 4) Price and cost relationship
Explanation:
Q328) Which realworld market closely approximates perfect competition Marks : 1.0
Id: 45190
1) most agricultural markets 2) automobile manufacturers
3) state universities 4) cable television services
Explanation:
Q329) NABARD established in – Marks : 1.0
Id: 44885
1) 1982 2) 1970
3) 1999 4) 1975
Explanation:
Q330) Demand curve slope downward from …………….. To ……………………….. . Marks : 1.0
Id: 44894
1) Left, right 2) Right ,left
3) Minimum , maximum 4) Maximum , minimum
Explanation:
Q331) Periods of less than full employment correspond to Marks : 1.0
Id: 44847
1) Points outside the PPF 2) Points inside the PPF
3) Points on the PPF 4) Any of these
Explanation:
Q332) The collapse of communism is evidence of Marks : 1.0
Id: 45035
1) Ceteris paribus 2) Market failure
3) The failure of a mixed economy 4) Government failure
Explanation:
Q333) In economics basic problem is ; Marks : 1.0
Id: 45048
1) Sacrcity 2) Production
3) Allocation 4) Money
Explanation:
Q334) If the local restaurant raises the price of pizza from Rs. 60 and Rs.100 and quantity Marks : 1.0
demanded falls from 700 pizzas to 100 pizzas. the price elasticity is – Id: 44912
1) 1.5 2) 3
3) 3 4) None of these
Explanation:
Q335) Which is one of the future consequences of an increase in the current level of Marks : 1.0
consumption in the India? Id: 44874
1) Slower economic growth in future 2) Greater economic growth in future
3) No change in growth rate 4) Greater capital; accumulation in future
Explanation:
Q336) The study of aggregates of economy is done through : Marks : 1.0
Id: 45111
3) Theory of Population 4) Micro and Macro both
Explanation:
Q337) Monopolistic competition differs from perfect competition primarily because: Marks : 1.0
Id: 45244
1) Barriers to entry in monopolistic competition 2) Product differentiation in monopolistic
competition
3) Advertisement is not necessary in 4) Firm is a price taker in monopolistic
monopolistic competition
Explanation:
Q338) Constrained optimization techniques are not designed to deal with the problem of: Marks : 1.0
Id: 45162
1) Selfserving management 2) Contractual requirements
3) Scarce investment funds 4) Limited availability of essential inputs
Explanation:
Q339) Goods that exhibit direct price demand relationship are called – Marks : 1.0
Id: 44923
1) Normal goods 2) Normal goods
3) Luxury goods 4) Complementary goods
Explanation:
Q340) Which of the following pairs of goods is an example of substitutes? Marks : 1.0
Id: 38784
1) Tea & Sugar 2) Tea & Coffee
3) Pen & Ink 4) Shirt & Trousers
Explanation:
Q341) Quantity demanded and price has a: Marks : 1.0
Id: 45205
1) Positive relationship 2) Constant relationship
3) Negative relationship 4) Zero relationship
Explanation:
Q342) Which statement is not the objective of the firm? Marks : 1.0
Id: 45106
1) Firm’s value Maximization to its shareholders. 2) Firm’s Size Maximization
3) Firm’s Profit Maximization 4) Firm’s Price Maximization
Explanation:
Q343) For what type of good does demand fall with a rise in income levels of household? Marks : 1.0
Id: 44931
1) Inferior goods 2) Substitutes
3) Luxurious 4) Necessities
Explanation:
Q344) What is MR? Marks : 1.0
Id: 38800
1) MR=TRnTRn1. 2) MR=TR/TQ.
3) MR=TR/TC. 4) MR=TR/AC.
Explanation:
Q345) Why do firms engage in price discrimination? Marks : 1.0
Id: 45278
1) To differentiate market segments 2) To gain monopolistic power
3) Keep consumers demand low 4) To make greater profits
Explanation:
Q346) Business economics is also known as _x000D_ _x000D_ Marks : 1.0
Id: 45283
1) Managerial Economics 2) Economics for executives
3) Economic analysis for business decisions 4) All of the above
Explanation:
Q347) Utility refers to – Marks : 1.0
Id: 44854
1) Want satisfying power of goods and service 2) Ethical concept
3) Stock concept 4) Utilization
Explanation:
Q348) GNP is equal to Marks : 1.0
Id: 45078
1) GDP + Interest 2) Wages
3) GDP+ Net factor income from abroad 4) GDP + Net depreciation
Explanation:
Q349) Equilibrium refers to Marks : 1.0
Id: 44856
1) Optimum situation 2) Absence of change in movement
3) Demand is equal to supply 4) All of these
Explanation:
Q350) Material welfare definition of economics stated by Marks : 1.0
Id: 44820
1) J B Say 2) Robbins
Explanation:
Q351) National income was kept somewhere between G.N.P. and N.N.P. by: Marks : 1.0
Id: 45123
1) Pigou 2) Marshall
3) Keynes 4) Adam Smith
Explanation:
Q352) In case the marginal cost of production is zero, the monopolist would produce at the Marks : 1.0
point where price elasticity Id: 45256
1) Unity 2) Zero
Explanation:
Q353) Which of the following is not incorrect? Marks : 1.0
Id: 38776
1) Accounting profit is the excess of accounting 2) Accounting cost is also known as explicit cost.
income over accounting expenses.
3) Economic profit = Total Revenue Economic
cost.
4) All of these
Explanation:
Q354) A firm has a variable cost of rs.1000 at 5 units of output. If fixed cost is Rs.400, what Marks : 1.0
will be the average total cost at 5 units of output? Id: 44964
1) Rs. 240 2) Rs. 120
3) Rs. 280 4) Rs. 60
Explanation:
Q355) Socialist economist like Karl Marx consider profit as Marks : 1.0
Id: 44851
1) Unearned surplus 2) Exploitation of labour
3) Both a and b 4) Uncertainty bearing
Explanation:
Q356) In economics, a firm is said to be making _______ when total revenues equal total Marks : 1.0
costs. Id: 45096
Explanation:
Q357) The principal reason behind economic problems is Marks : 1.0
Id: 45056
1) Limited wants 2) Limited or scarce means
3) Unlimited resources 4) Stable environment
Explanation:
Q358) If a consumption of a product remains unaffected by the change in price of the Marks : 1.0
product, demand for the product is: Id: 45182
1) Kinked 2) Perfectly elastic
3) Perfectly inelastic 4) Unitary elastic
Explanation:
Q359) Which among the following is not an economic problem? Marks : 1.0
Id: 38743
3) Why to produce 4) Relation between mother and child
Explanation:
Q360) Under which of the following forms of market structure does a firm have no control Marks : 1.0
over the price of its product? Id: 44972
Explanation:
Q361) If the demand for the product is independent of the demand for other goods ,it is Marks : 1.0
called is – Id: 44922
1) Derived demand 2) Autonomous demand
3) Industry demand 4) Company demand
Explanation:
Q362) The word economy comes from the Greek word for Marks : 1.0
Id: 45141
1) Environment. 2) One who participates in a market
3) One who manages a household 4) Conservation
Explanation:
Q363) A firm in long run equilibrium under monopolistic competition makes only Marks : 1.0
Id: 44988
1) Normal profits 2) Supernormal profits
3) Loss 4) All of the above
Explanation:
Q364) In monopoly, marginal revenue is: Marks : 1.0
Id: 45187
1) Always equal to price 2) Lower than price for all units other than the
first
3) Less than price at all levels of output and 4) Always greater than price
greater than price at high levels of output
Explanation:
Q365) “Full Employment” assumption is generally made in: Marks : 1.0
Id: 45110
3) Employment theory 4) None of the above
Explanation:
Q366) In economics the central problem is: Marks : 1.0
Id: 45036
1) Money 2) Scarcity
3) Allocation 4) Production
Explanation:
Q367) According to law of demand, there is …………… relationship between price and Marks : 1.0
quantity demanded of the goods. Id: 44889
1) Inverse 2) Direct
3) Legal 4) Negative
Explanation:
Q368) Micro economics is also known as ________: Marks : 1.0
Id: 45019
1) Product theory 2) Price theory
3) Process theory 4) Projection theory
Explanation:
Q369) an economist says that firm practices price discrimination, that firm is: Marks : 1.0
Id: 45275
1) Exploiting the poor 2) Charging different prices for the same good or
service
3) Making great efforts to keep its costs as low as 4) Producing two products, one with decreasing
possible returns to scale and the other with increasing
returns
Explanation:
Q370) Price control is one of the monopoly regulations which is most advantageous for Marks : 1.0
Id: 44985
1) The producer 2) The consumer
3) The government 4) The seller
Explanation:
Q371) Perfect competitive market firm achieves equilibrium when Marks : 1.0
Id: 38793
1) Demand = Supply 2) AR= MR
3) MR=MC 4) AR=MC
Explanation:
Q372) Supply refers to – Marks : 1.0
Id: 44945
1) What firms sell 2) What firms offer for sale
3) Stock maintained by seller 4) Selling of a goods at a profit
Explanation:
Q373) .equals revenue minus all explicit costs. Marks : 1.0
Id: 45061
1) Accounting profit 2) Economic profit
3) Normal profit 4) Loss
Explanation:
Q374) 46. Economic Profit = Total Revenue (___________________________________) Marks : 1.0
Id: 38749
1) Explicit Cost 2) Implicit Cost
3) Explicit Cost + Implicit Cost 4) Explicit Cost –Implicit Cost
Explanation:
Q375) _______economics deals with the determination of national income and output: Marks : 1.0
Id: 45042
1) Micro 2) Price
3) Macro 4) Individual
Explanation:
Q376) Who has written ‘it is not from the benevolence of the butcher, the brewer or the Marks : 1.0
baker that we expect our dinner, but from their regard to their own selfinterest’? Id: 38760
3) Malthus 4) Milton Friedman
Explanation:
Q377) Gross profit equals Marks : 1.0
Id: 45088
1) COGS 2) Sales Revenue minus cost of goods sold
3) Sales Revenue only 4) Sales Revenue plus Profit
Explanation:
Q378) When the price of commodity X rises, the quantity demanded of its substitute good Y Marks : 1.0
keeping the price of Y constant. Id: 45167
1) Rises. 2) Falls
Explanation:
Q379) The condition of equilibrium in a firm is Marks : 1.0
Id: 45269
1) MR= MC 2) MR=AC
3) MR=AR 4) MC=AC
Explanation:
Q380) There would be no need to study economics if: Marks : 1.0
Id: 45021
1) there were no government controls on 2) people were free to do whatever they wanted
people's actions. with their lives.
3) there were enough resources to produce all 4) Government controls the economy.
the goods and services people would like to
obtain.
Explanation:
Q381) The price elasticity of demand measures: Marks : 1.0
Id: 45274
1) the slope of a budget curve. 2) the responsiveness of the quantity demanded
to changes in price.
3) how often the price of a good changes. 4) how sensitive the quantity demanded is to
changes in demand.
Explanation:
Q382) The Perfectly Competitive firm’s demand curve coincides with: Marks : 1.0
Id: 45179
1) its average revenue curve and total revenue 2) both its marginal and average revenue curve.
curve.
3) its average revenue curve and total revenue
curve.
4) both its marginal and total revenue curve
Explanation:
Q383) Product differentiation is the feature of Marks : 1.0
Id: 38797
Explanation:
Q384) The basic reason we study economics is because material wants and needs are: Marks : 1.0
Id: 45044
1) Limited and so are resources. 2) Unlimited but resources are not.
3) Limited but resources are not. 4) Unlimited and so are resources.
Explanation:
Q385) Which is the first order condition for the profit of a firm to be maximum? Marks : 1.0
Id: 44970
1) AC = MR 2) MC = MR
3) MR = AR 4) AC = AR
Explanation:
Q386) Adam Smith invisible hands stands for Marks : 1.0
Id: 38753
1) Two opposite market forces of demand and 2) Only demand
supply
3) Only supply
4) Production and Distribution
Explanation:
Q387) Which Of The Following Is/ Are False? Marks : 1.0
Id: 45129
1) With Good Monsoons People’s Purchasing 2) A Low Rate of Interest Is Must for Economic
Power Decreases Development
3) Rate Of Saving Is Important For Growth. 4) A and B
Explanation:
Q388) Which of the following is the reason of leftward ship of demand curve? Marks : 1.0
Id: 44898
1) Rise in the price of substitute 2) Change in taste in favour of this commodity
3) Rise in price of complementary 4) Rise in the income of the consumer
Explanation:
Q389) Demand for electricity power is elastic because – Marks : 1.0
Id: 44940
1) Due to its high price per unit 2) It is essential for life
3) It has many uses 4) It has many substitutes
Explanation:
Q390) Marginal utility analysis assumes that the marginal utility of money: Marks : 1.0
Id: 45113
1) Remains Constant 2) Varies according to consumer behaviour
3) Varies according to price fluctuations 4) Depend on the Inflation
Explanation:
Q391) Macroeconomics is the study of____________________ Marks : 1.0
Id: 45132
1) Individual building blocks in the economy 2) The relationship between different sectors of
the economy
3) Household purchase decisions 4) The economy as a whole
Explanation:
Q392) Items of joint consumption will have ______ cross elasticity Marks : 1.0
Id: 45250
3) Zero 4) None
Explanation:
Q393) Elasticity of demand is defined as the responsiveness of the quantity demanded of a Marks : 1.0
good to …… Id: 44902
1) Change in the price of the goods 2) Change in the income
3) Change in one of the variable on which 4) Change in the population
demand depends
Explanation:
Q394) cost is also known as imputed cost. Marks : 1.0
Id: 45290
Explanation:
Q395) Law of demand depends upon Marks : 1.0
Id: 45267
1) Inverse relationship between price & quantity 2) Positive relationship between price & quantity.
3) Both 4) None
Explanation:
Q396) Which of the following involves the study of the overall economy of a country? Marks : 1.0
Id: 45043
1) Nanoeconomics 2) Macroeconomics
3) Microeconomics 4) Neoeconomics
Explanation:
Q397) According to Adam Smith’s theory of the “invisible hand,” businesses will produce Marks : 1.0
the products consumers most desire because Id: 45025
1) this will maximize consumer satisfaction. 2) the government requires them to do so.
3) this will maximize business profits. 4) this will maximize society’s welfare.
Explanation:
Q398) Deductive , Analytical, Abstract method is used by: Marks : 1.0
Id: 45118
1) Classical School 2) NeoClassical School
3) Modern School 4) Ancient School
Explanation:
Q399) It is called as …………………….if_x000D_ Marks : 1.0
Id: 45102
• It explains the working of the economic system as a whole_x000D_
• It’s knowledge is indispensable for the policy makers_x000D_
• It is very useful to the planner for preparing economic plans_x000D_
• It is helpful in international comparison_x000D_ _x000D_
1) Micro economics 2) Macroeconomics
3) Indian economics 4) International economics
Explanation:
Q400) If the price of Pepsi rise, demand of coco cola Marks : 1.0
Id: 44942
3) Rise 4) Fall
Explanation:
Q401) Which of the following is the most accurate statement about economic models? Marks : 1.0
Id: 45143
1) Economic models attempt to mirror reality 2) Economic models are useful, but should not
exactly. be used for policymaking.
3) Economic models cannot be used in the real 4) Economic models omit many details to allow
world because they omit details. us to see what is truly important.
Explanation:
Q402) Product differentiation is a common feature in. Marks : 1.0
Id: 45264
3) Oligopoly. 4) Monopoly.
Explanation:
Q403) Micro economics is the Marks : 1.0
Id: 45058
Explanation:
Q404) Production possibility curve is Marks : 1.0
Id: 44875
1) Concave to the origin 2) Convex to the origin
3) Straight line when opportunity cost is constant 4) Both a and c
Explanation:
Q405) If a product has more substitutes, demand is highly . Marks : 1.0
Id: 45222
3) Relatively more elastic. 4) Relatively less elastic.
Explanation:
Q406) From society's point of view the economic function of profits and losses is to: Marks : 1.0
Id: 45147
1) Promote the equal distribution of real assets 2) Reallocate resources from less desired to
and wealth more desired uses
3) Achieve full employment and price level 4) Contribute to a more equal distribution of
stability income
Explanation:
Q407) With a fall in an agricultural crop due to bad monsoons, the supply elasticity of Marks : 1.0
agricultural goods will . Id: 45223
1) Fall. 2) Rise.
3) Change. 4) Not change.
Explanation:
Q408) Accounting profit = total revenue – Marks : 1.0
Id: 44853
3) Explicit cost 4) Marginal cost
Explanation:
Q409) Supply curve slope Marks : 1.0
Id: 44947
1) Downward from left to right 2) Upward from left to right
3) Downward from right to left 4) Upward from right to left
Explanation:
Q410) Managerial economic is a “ Fundamental academic subject which seeks to Marks : 1.0
understand and to analyse the problems of business decision taking” – the definition Id: 45085
is given by
1) Savage and Small 2) Adam smith
3) D.C. Hayue 4) Richard Meriam
Explanation:
Q411) Which of the following is an example of a resource constraint? Marks : 1.0
Id: 45158
1) Pollution control laws 2) Inadequate demand
3) Excessive production costs 4) Inadequate financial capital
Explanation:
Q412) Which of the following is not correct? Marks : 1.0
Id: 44943
1) If proportion of income spent on goods 2) If proportion of income spent on goods
remains same as an income is increase, then remains same as an income is decrease, then
income elasticity is one income elasticity is one
3) If proportion income spent on a good increase 4) If proportion income spent on a good increase
as an income increase, then income elasticity as an income increase, then income elasticity
is less than one is greater than one
Explanation:
Q413) Which is NOT the function of Managerial Economist? Marks : 1.0
Id: 45104
1) Controlling the macro economy only 2) Involved with macro and micro economy both
3) Demand estimation and forecasting 4) Directing economic research activity
Explanation:
Q414) Producers' total revenue will decrease if: Marks : 1.0
Id: 45199
1) the price rises and demand is inelastic. 2) income increases and the good is a normal
good.
3) the price rises and demand is elastic. 4) income falls and the good is an inferior good.
Explanation:
Q415) The switch to the use of HFCS from sugar in soft drinks was prompted in large part Marks : 1.0
by its relatively lower price. Assuming a competitive market, what effect would this Id: 38803
change have on the equilibrium price and output for soft drinks?
1) price rises, output falls 2) price falls, output rises
3) price rises, output rises 4) price falls, output falls
Explanation:
Q416) Adam Smith’s theory of the “invisible hand” assumes that Marks : 1.0
Id: 45028
1) businesses will voluntary reduce negative 2) consumers are concerned about maximizing
externalities generated by the production of the welfare of their fellow consumers.
their products
3) selfinterested producers sell their products to
selfinterested consumers.
4) government research is necessary to inform
businesses what consumers most want.
Explanation:
Q417) The Latin phrase ‘Ceterius Paribus’ means: Marks : 1.0
Id: 45018
1) ‘Everything else change simultaneously’ 2) ‘Everything else being equal’
3) ‘Few factors change at same frequency’ 4) ‘All factors change at same frequency’
Explanation:
Q418) The price elasticity of demand is a negative number this means: Marks : 1.0
Id: 45230
1) Demand is price elastic 2) Demand is price inelastic
3) The demand curve is downward sloping 4) An increase in income will reduce the quantity
demanded
Explanation:
Q419) If demand is price inelastic: Marks : 1.0
Id: 45231
1) An increase in price must raise profits 2) An increase in price decreases revenue
3) An increase in price increases revenue 4) A decrease in price reduces sales
Explanation:
Q420) To maximize value, management must: Marks : 1.0
Id: 45160
1) Maximize short run revenue 2) Minimize short run average profit
3) Maximize long run profit 4) Maximize short run profit
Explanation:
Q421) A selfinterest can be well understood as Marks : 1.0
Id: 38755
1) Acting in the way that is most personally 2) Acting in the way that is most beneficial to the
beneficial society
3) Acting in the way that is most beneficial to the 4) Acting in the way that is most beneficial to the
family firm
Explanation:
Q422) If the price of coffee fall the demand for tea will ……………….. Marks : 1.0
Id: 44892
1) Rise 2) Fall
3) decrease 4) constant
Explanation:
Q423) The Law of Demand states that when the price of a commodity falls the quantity Marks : 1.0
demanded keeping all other factors constant. _x000D_ Id: 45220
1) Rises. _x000D_ 2) Falls
3) Is constant._x000D_ 4) Will remain constant. _x000D_
Explanation:
Q424) Multi plant monopolist is an illustration of Marks : 1.0
Id: 45189
1) Price discrimination of first degree 2) Price discrimination of second degree
3) Price discrimination of third degree 4) Natural monopoly
Explanation:
Q425) Which of the following is shut down point Marks : 1.0
Id: 45004
1) AR > AC 2) AR > AVC
3) AR < AVC 4) AR > FC
Explanation:
Q426) Ceteris Paribus is the Latin expression for Marks : 1.0
Id: 45034
1) A statement about the way the economic world 2) An expression that means "other things being
ought to be equal."
3) The (false) statement that what is true of the 4) The error of reasoning that a first event causes
parts is true of the whole or what is true of the a second event because the first event
whole is true of the parts. occurred before the second event.
Explanation:
Q427) To cure the problem of externalities, such as pollution, economists recommend that Marks : 1.0
government Id: 45029
1) regulate polluters 2) pursues a policy of laissezfaire, "hands off"
businesses.
3) determine mandatory limits controlling the 4) use the market mechanism to control
amount of pollution which businesses may undesirable externalities.
generate.
Explanation:
Q428) Demand of commodity refers to Marks : 1.0
Id: 44886
1) Desire for the commodity 2) Need for the commodity
3) Quantity demanded for that commodity 4) Quantity of the commodity demanded at a
certain price during any particular period of
time.
Explanation:
Q429) In case of increase in demand, the demand curve Marks : 1.0
Id: 38773
1) Shifts backwards. 2) Shifts forward.
3) Will have upward slope. 4) Will be horizontal.
Explanation:
Q430) According to profit maximization theory of the firm, management decides Marks : 1.0
Id: 45064
1) Output level which maximizes revenue 2) Output level which minimizes cost
3) Output level which maximizes difference 4) Output level which minimizes revenue
between the two
Explanation:
Q431) The theory of monopolistic competition is developed by Marks : 1.0
Id: 44986
1) E H Chamberlin 2) Robinson
Explanation:
Q432) The modern theory of the firm holds that firms behave in a way that is designed to Marks : 1.0
maximize Id: 45154
1) Profit 2) The value of the firm
3) Monopoly power 4) Total revenue
Explanation:
Q433) The Classical theory of international trade is propounded by : Marks : 1.0
Id: 45128
1) Adam smith 2) Robbinson
3) Pigou 4) Marx
Explanation:
Q434) Change in demand represents Marks : 1.0
Id: 44899
1) Shift of demand curve to left or right 2) Shift of demand curve to left
3) Shift of demand curve to right 4) Expansion and contraction
Explanation:
Q435) In a perfectly competitive market ______________. Marks : 1.0
Id: 45263
1) There are large number of buyers and a small 2) There are a large number of sellers and small
number of sellers. number of buyers.
3) There are a small number of sellers and 4) There are a large number of buyers and
buyers. sellers.
Explanation:
Q436) When the decrease in the price of one good causes the demand for another good to Marks : 1.0
decrease, the goods are: Id: 45254
1) normal. 2) inferior
3) Substitute 4) Complimentary
Explanation:
Q437) If there are many firms in an industry producing goods that are similar but slightly Marks : 1.0
different, this is an example of: Id: 45233
Explanation:
Q438) The tendency for managers to operate a firm in a way that maximizes their personal Marks : 1.0
utility rather than the firm’s profits is referred to as the Id: 45155
1) Consumer utility incentive 2) Principalagent problem
3) Hidden agenda scenario 4) Modigliani Hypothesis
Explanation:
Q439) With a fall in agricultural subsidy, the price of agricultural goods will and the Marks : 1.0
quantity supplied will also keeping all other variables constant. Id: 45224
1) Increase 2) Decrease.
3) Will not increase. 4) Will not decrease.
Explanation:
Q440) If Average revenue = Rs.10 and Average cost = Rs. 7, then Marks : 1.0
Id: 38770
1) Firm get Normal Profit 2) Firm get abnormal Profit
3) Firm face Loss 4) Break even point
Explanation:
Q441) The total demand for goods and services in an economy is known as: Marks : 1.0
Id: 45248
1) aggregate demand 2) gross national product
3) economywide demand. 4) national demand
Explanation:
Q442) Sales revenue after deducting all expenses, including taxes Marks : 1.0
Id: 45092
1) Earnings After Tax 2) Net Profit before Tax
3) Earnings before Tax 4) Gross Profit After Tax
Explanation:
Q443) Negative cross elasticity between any two commodities implies that they are: Marks : 1.0
Id: 45253
1) Complements 2) Substitutes
3) Inferior goods 4) Luxuries
Explanation:
Q444) If electricity demand is inelastic, and electricity charge increase, which of the Marks : 1.0
following is likely to occur? Id: 44925
1) Quantity demanded will fall by a relatively 2) Quantity demanded will rise in the short run
large amount but fall in long run
3) No change in quantity demanded 4) No change in quantity demanded
Explanation:
Q445) When consumption and investment spending together is greater than full Marks : 1.0
employment GNP level, it creates Id: 45121
1) Deficit Financing 2) Deflationary GAP
3) Inflationary GAP
Explanation:
Q446) With a fall in a price of a commodity Marks : 1.0
Id: 44924
1) Consumers real income increase 2) Consumers real income decrease
3) No change real income 4) None of these
Explanation:
Q447) The total revenue curve for a perfectly competitive firm Marks : 1.0
Id: 45257
1) is a vertical line intersecting the horizontal 2) is a horizontal line at the market price
axis
3) starts part way up the vertical axis, sloping
upward in a backwardsS curve
4) is a straight line starting from the origin and
sloping upward
Explanation:
Q448) Goods and Services bought and sold in: Marks : 1.0
Id: 45049
1) Product Market 2) Factor Market
3) Capital Market 4) Money Market
Explanation:
Q449) Value maximization means Marks : 1.0
Id: 44850
1) Profit maximization 2) Sales maximization
3) Wealth maximization 4) Cost minimization
Explanation:
Q450) The demand of which type of goods do not decrease with increase in its price – Marks : 1.0
Id: 44935
1) Comforts 2) Luxury
3) Necessities 4) Capital goods
Explanation:
Q451) Derivative use in the …………………….. Method of price elasticity. Marks : 1.0
Id: 44909
1) Point 2) Outlay
3) Arc 4) Output
Explanation:
Q452) Demand forecasting is made for the Marks : 1.0
Id: 38774
1) For the existing products only. 2) New products only.
3) For both the existing products & for the new 4) For the substitutes only.
products.
Explanation:
Q453) Firm is an organization that produces and sells goods with the goal of maximizing its Marks : 1.0
profits Id: 44849
1) Miller 2) Adam smith
3) Landsbury 4) Marshall
Explanation:
Q454) Sales opinion survey method is also known as Marks : 1.0
Id: 44927
1) Sample survey 2) Experts pinion method
3) Test marketing 4) Reaction survey
Explanation:
Q455) Brand Loyalty usually makes the demand curve for a product: Marks : 1.0
Id: 45195
1) More price elastic 2) Less price elastic
3) Unitary elastic 4) More income elastic
Explanation:
Q456) To accountants, it is a singleperiod metric to determine the value created by a Marks : 1.0
company in one period—usually a year Id: 45094
3) Net Profit 4) Norma Profit
Explanation:
Q457) If elasticity is greater than one, then MR is Marks : 1.0
Id: 45009
1) Positive 2) Zero
3) Negative 4) Negative
Explanation:
Q458) Inflation is: Marks : 1.0
Id: 45249
1) a decrease in the overall level of economic 2) a decrease in the overall price level
activity
3) an increase in the overall price level
4) an increase in the overall level of economic
activity
Explanation:
Q459) cost is also known as explicit cost. Marks : 1.0
Id: 45291
3) Outlay 4) Sunk
Explanation:
Q460) What is the goal of theories? Marks : 1.0
Id: 45150
1) To provide an interesting, but not useful, 2) To help scientists understand how the world
framework of analysis works
3) To demonstrate that the developer of the 4) To provoke stimulating debate in scientific
theory is capable of logical thinking journals
Explanation:
Q461) The crosselasticity of the two complementary goods X and Y is . Marks : 1.0
Id: 45174
Explanation:
Q462) If the price of Pepsi decreases relative to the price of coke and 7up , the demand for Marks : 1.0
Id: 44893
1) Coke will decrease 2) 7 up will decrease
3) Coke and 7up will increase 4) Coke and 7up will decrease
Explanation:
Q463) Economic Analysis for Business Decisions is integration of: Marks : 1.0
Id: 45071
1) Technology, Economics and physical science 2) Economics, decision science and business
management
3) Knowledge and principles 4) Control and conflicts
Explanation:
Q464) Of the following commodities which has the lowest elasticity of demand Marks : 1.0
Id: 38785
1) Car 2) Salt
3) Tea 4) House
Explanation:
Q465) When as a result of increase in price of a good , the total expenditure made on the Marks : 1.0
good falls, we say that price elasticity of demand is – Id: 44913
3) Equal to unity 4) zero
Explanation:
Q466) When an individual spends relatively less proportion of his/her total income on a Marks : 1.0
particular commodity or service, its elasticity of demand is elastic. Id: 45172
1) More. 2) Less.
3) Relatively more. 4) Relatively less.
Explanation:
Q467) Business profit is equal total revenue minus Marks : 1.0
Id: 45157
1) Economic costs 2) Explicit costs
3) Implicit costs 4) Managerial costs
Explanation:
Q468) A market economy based on supply and demand with little or no government control Marks : 1.0
is known as Id: 45015
1) Free economy 2) No economy
3) Restricted economy 4) Only economy
Explanation:
Q469) It is called as______________if _x000D_ • It explains Price Determination_x000D_ • It Marks : 1.0
explains Allocation of Resources_x000D_ • It has Direct Relevance in Business Id: 45100
Decision Making_x000D_ • It serves as a Basis for Prediction
1) Micro economics 2) Macro economics
3) Indian economics 4) Industrial economics
Explanation:
Q470) Economics is defined as: Marks : 1.0
Id: 45040
1) The study of business 2) The study of how society manages its scarce
resources
3) The study of central planning 4) The study of government regulation
Explanation:
Q471) Macroeconomics examines: Marks : 1.0
Id: 45072
1) pricing, profit maximization, and utility 2) employment, output, and inflation.
maximization.
3) the behavior of individual households,
businesses, and government units.
4) firm, Industry and sector
Explanation:
Q472) One of the basic assumptions underlying Adam Smith's theory of the Invisible Hand Marks : 1.0
is that Id: 45027
1) government attempts to maximize power. 2) government planning is necessary to
maximize economic growth.
3) businesses and households are concerned 4) households are unselfish. They attempt to
about their own “selfinterest.” maximize the well being of their fellow citizens.
Explanation:
Q473) Total revenue is maximum when_x000D_ Marks : 1.0
Id: 45281
1) Marginal revenue is positive _x000D_ _x000D_ 2) Marginal revenue is negative
3) Marginal revenue is zero 4) None of the above
Explanation:
Q474) Economics deals primarily with the concept of: Marks : 1.0
Id: 45067
1) Poverty 2) Change
3) Scarcity 4) Power
Explanation:
Q475) Who is the president of planning commission? Marks : 1.0
Id: 44880
1) Prime minister 2) President
3) Governor 4) Finance minister
Explanation:
Q476) A market situation where there are few sellers for the product is called : Marks : 1.0
Id: 45238
1) Pure competition 2) Oligopoly.
3) Monopolistic 4) Monosony.
Explanation:
Q477) The price of beverage increase by 22% and the quantity demanded of it falls by 25%. Marks : 1.0
This indicates that demand for beverage is – Id: 44911
1) Elastic 2) Inelastic
3) Unitary elastic 4) Perfectly elastic
Explanation:
Q478) Microeconomics deals with which of the following? Marks : 1.0
Id: 45140
1) The total output of an economy 2) The measurement of a nation's inflation rate
3) How producers and consumers interact in 4) How tax policies influence economic growth
individual markets
Explanation:
Q479) The crosselasticity of the two substitute goods X and Y is . Marks : 1.0
Id: 45173
Explanation:
Q480) Elasticity between two points calculate in – Marks : 1.0
Id: 44934
1) Cross elasticity 2) Arc elasticity
3) Point elasticity 4) Outlay method
Explanation:
Q481) Movement along the same demand curve shows Marks : 1.0
Id: 44930
1) Expansion of demand 2) Contraction of demand
3) Increase or decrease in demand 4) Expansion and contraction in demand
Explanation:
Q482) When the price of commodity X rises, the quantity demanded of its complementary Marks : 1.0
good Y keeping the price of Y constant. Id: 45168
1) Rises. 2) Falls
Explanation:
Q483) Goods which has a negative income elasticity called as Marks : 1.0
Id: 44919
1) Inferior goods 2) Inferior goods
3) Complementary goods 4) Substitute goods
Explanation:
Q484) Capital goods are those goods Marks : 1.0
Id: 44855
1) Which are consumed by consumer 2) That help in further production
3) That can be consumed number of times 4) That satisfy human wants
Explanation:
Q485) To Adam Smith, the "invisible hand" refers to Marks : 1.0
Id: 45046
1) the government 2) his faith in people's basic human kindness to
their fellow man.
3) the generosity of businesses in a capitalist 4) the free market.
system.
Explanation:
Q486) Which of this is a noncompetitive market? Marks : 1.0
Id: 45245
1) Oligopoly 2) Perfect competition
3) Monopoly 4) Monopolistic
Explanation:
Q487) is the predecessor of WTO. Marks : 1.0
Id: 45059
1) GAAT 2) IMF
Explanation:
Q488) Managerial Economics has a wide scope in Marks : 1.0
Id: 45076
1) Value Engineering 2) Value Engineering Management
3) Value Management 4) Profit Management
Explanation:
Q489) Which of the following sentence is correct? Marks : 1.0
Id: 44948
1) Contraction of supply means upward 2) Expansion of supply means downward
movement of supply curve movement of supply curve
3) Increase in supply means rightward shift of 4) Expansion of supply means upward movement
demand curve of supply curve
Explanation:
Q490) Micro economic is also known as Marks : 1.0
Id: 44858
1) Income theory 2) Profit theory
3) Price theory 4) Cost theory
Explanation:
Q491) The circular flow of goods and incomes shows the relationship between: Marks : 1.0
Id: 45047
1) wages and salaries. 2) firms and households
3) goods and services. 4) income and money.
Explanation:
Q492) The firm can achieve equilibrium when its Marks : 1.0
Id: 45193
1) MC= MR 2) MC= AC
3) ME= AC 4) MR= AR
Explanation:
Q493) The foundation stones from which economic models are built are Marks : 1.0
Id: 45149
1) Economic policies. 2) The legal system.
3) Assumptions. 4) Statistical forecasts
Explanation:
Q494) Uniform price is the feature of – Marks : 1.0
Id: 44981
Explanation:
Q495) There is relationship between price and quantity supplied of the goods. Marks : 1.0
Id: 44946
1) Direct 2) Inverse
3) Constant 4) Fixed
Explanation:
Q496) What is equilibrium price and quantity in the following case? Marks : 1.0
Id: 44951
1) 15,40 2) 35, 20
3) 25, 50 4) None of these
Explanation:
Q497) Marginal revenue is equal to Marks : 1.0
Id: 44957
1) The change in price divided by change in 2) Change in quantity divided by change in price
output
3) The change in P*Q due to one unit change in
output
4) Average price of the goods
Explanation:
Q498) The firm is said to be in equilibrium when – Marks : 1.0
Id: 44966
1) It maximizes its profit 2) Demand is equal to supply
3) It minimizes its losses 4) Demand is at its highest point
Explanation:
Q499) Which method of demand forecasting, firms takes all households into consideration? Marks : 1.0
Id: 38777
1) Complete enumeration survey method 2) Sales force opening method
3) Delphic method 4) Sample survey method
Explanation:
Q500) A cartel is most likely to occur in Marks : 1.0
Id: 45276
1) Perfect competition as firms compete by 2) Monopolistic competition where firms collude
reducing cost to increase profits
3) Monopoly because it faces no competition 4) Oligopoly as firms act together to raise prices
and increase profits
Explanation:
Q501) For the free market to yield optimal results for the production and consumption of Marks : 1.0
good X,dam Smith assumed all of the following would have to exist, except possibly Id: 45030
one. The single exception is
1) competition exists in the production of good X. 2) successful government planning is able to
inform businesses how much of good X
consumers demand.
3) no externalities exist in the production or 4) consumer sovereignty exists.
consumption of good X.
Explanation:
Q502) Freedom of choice is the feature of Marks : 1.0
Id: 44840
Explanation:
Q503) The Definition that Economics is concerned with an enquiry into the nature and Marks : 1.0
causes of wealth of nations is given by: Id: 45114
1) Carl Marx 2) Adam Smith
3) J. E. Cairens 4) Keynes
Explanation:
Q504) A movement along the same demand curve for Samsung mobile is best described as Marks : 1.0
– Id: 44900
1) An increase in demand 2) A decrease in demand
3) A change in quantity demanded 4) A change in demand
Explanation:
Q505) The invisiblehand concept suggests that: Marks : 1.0
Id: 45144
1) Market failures imply the need for a national 2) Big businesses are inherently more efficient
economic plan than small businesses
3) The competitiveness of a capitalistic market 4) Assuming competition, private and public
economy invariably diminishes over time interests will coincide
Explanation:
Q506) The price elasticity of demand for addictive products like cigarettes and alcohol Marks : 1.0
would be: Id: 45236
1) Infinity 2) Less than 1
3) Greater than 1 4) Zero
Explanation:
Q507) Factor that will determine whether advertising by manufacturer will lead to higher Marks : 1.0
sales Id: 45011
1) If demand is elastic 2) If demand is inelastic
3) The product can be differentiated 4) The product is branded
Explanation:
Q508) Perfectly competitive firm can sell all output it wants to Marks : 1.0
Id: 45192
1) By cutting down supply of output 2) By lowering the price it charges to each
additional unit produced
3) By lowering its costs of production 4) Without lowering the price
Explanation:
Q509) Indian railway is the example of – Marks : 1.0
Id: 45006
3) Perfect competition 4) Duopoly
Explanation:
Q510) If the proportion of income spent on a good increase as a income increases , then the Marks : 1.0
income elasticity for that good is – Id: 44917
Explanation:
Q511) The quantity supplied of X and the price of X are related. Marks : 1.0
Id: 45201
3) Directly. 4) Indirectly.
Explanation:
Q512) Generally the demand curve – Marks : 1.0
Id: 44928
1) A slope downward from left to right 2) A slope upward from left to right
3) Has Negative slope 4) Both a and c
Explanation:
Q513) Under perfect competition a firm can produce with Marks : 1.0
Id: 44993
1) An optimum plant 2) An optimum output
3) Maximum profit 4) Identical product at low cost
Explanation:
Q514) A market can accurately be described as Marks : 1.0
Id: 45137
1) A place to buy things 2) A place to sell things
3) The process by which prices adjust to 4) A place where buyers and sellers meet
reconcile the allocation of resources
Explanation:
Q515) Opportunity cost is Marks : 1.0
Id: 45083
1) a cost that cannot be avoided, regardless of 2) that which we forgo, or give up, when we make
what is done in the future a choice or a decision
3) the cost incurred in the past before we make a 4) the additional benefit of buying an additional
decision about what to do in the future. unit of a product
Explanation:
Q516) Increase in consumer’s income leads in the demand for inferior goods to Marks : 1.0
Id: 45271
1) increase 2) decrease
3) remains constant 4) none of the above
Explanation:
Q517) The assumptions that there are a large number of sellers and product homogeneity, Marks : 1.0
in perfect competition it implies that all individual firms are _________: Id: 45240
1) Price movers 2) Price Takers
3) Price givers 4) Price offers
Explanation:
Q518) Economic profit equals: Marks : 1.0
Id: 45163
1) Normal profit plus opportunity costs 2) Business profit minus implicit costs
3) Business profits plus implicit costs 4) Normal profits minus opportunity costs
Explanation:
Q519) To study an individual consumer’s behaviour, we need: Marks : 1.0
Id: 45109
3) Micro and Macro Both 4) Consumer behaviour science
Explanation:
Q520) Price discrimination means Marks : 1.0
Id: 45007
1) Charge different price from different buyer for 2) Charge different price from different buyer for
different product same product
3) Charge different price from different seller for 4) Charge same price from different buyer for
same product same product
Explanation:
Q521) A market structure in which many firms sell products that are similar but not identical Marks : 1.0
is known as – Id: 44975
Explanation:
Q522) Principal agent problem reflects differences in the objectives Marks : 1.0
Id: 45286
1) Owner and Manager _x000D_ b) d) 2) Manager and employees
3) Owner and board of directors 4) Employees and customers _x000D_
Explanation:
Q523) A movement along the demand curve to the left may be caused by: Marks : 1.0
Id: 38748
1) a fall in the number of substitute goods. 2) a rise in the price of inputs.
3) a decrease in supply. 4) a rise in income.
Explanation:
Q524) Invisible hand theory is given by Marks : 1.0
Id: 44845
1) Samuelson 2) Adam smith
Explanation:
Q525) Which of the following is not the factor which determine the demand Marks : 1.0
Id: 44888
1) Level of income 2) Price
3) Supply 4) Fashion
Explanation:
Q526) It is a theoretical measure and denotes the "right" level of profit a business can Marks : 1.0
achieve Id: 45095
1) Optimum Profit 2) Economic Profit
3) Economic Rent 4) Accounting Profit
Explanation:
Q527) Expansion and contraction occurs due to Marks : 1.0
Id: 44896
1) Change in the price of goods concerned 2) Change in the level of income of people
3) Change in the population 4) Change in price of substitute goods
Explanation:
Q528) Which of the following curve is never U shaped? Marks : 1.0
Id: 44962
1) Marginal cost 2) Average variable cost
3) Average total cost 4) Average fixed cost
Explanation:
Q529) The quantity demanded of X and the price of X are related. Marks : 1.0
Id: 45219
3) Directly 4) Indirectly
Explanation:
Q530) All of the following are determinants of demand except: Marks : 1.0
Id: 45241
1) Price 2) Supply
3) Tastes 4) Price of other goods
Explanation:
Q531) Cost is also known as imputed cost. Marks : 1.0
Id: 44842
Explanation:
Q532) Based on the Law of demand, quantity demanded is _________ related to price: Marks : 1.0
Id: 45208
1) Directly 2) Positively
3) Inversely 4) Actually
Explanation:
Q533) Income elasticity for luxurious goods is Marks : 1.0
Id: 44918
3) Less than one 4) Greater than one
Explanation:
Q534) When we analyse the problems of economy as a whole it is a study of: Marks : 1.0
Id: 45108
3) Micro and Macro both 4) None of these
Explanation:
Q535) It is also known as Prescriptive Economics Marks : 1.0
Id: 45033
1) Positive Economics 2) Micro economics
3) Normative economics 4) Economics
Explanation:
Q536) The opportunity cost of a good is Marks : 1.0
Id: 45136
1) The time lost in finding it 2) The quantity of other goods sacrificed to get
another unit of that good
3) The expenditure on the good 4) The loss of interest in using savings
Explanation:
Q537) If the demand curve shift from left to right then it is called as Marks : 1.0
Id: 44897
1) Increase in demand 2) Decrease in demand
3) Expansion in demand 4) Contraction in demand
Explanation:
Q538) First condition of equilibrium is MC = MR and second condition is should Marks : 1.0
cut from . Id: 45005
1) MC curve, MR curve, above 2) MC curve, MR curve, below
3) MR curve, MC curve, below 4) MR curve, MC curve, above
Explanation:
Q539) Basic price – Marks : 1.0
Id: 45087
1) Is the valuation of the product of the firm 2) Is the determination of cost of product of the
firm
3) Is the determination of the companies price 4) Is a cost price
level
Explanation:

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आम्ही दिल् या Study material चा उपयोग तुम्हला Study

1. In a free-market economy the allocation of resources is determined by:

2. A rational person does not act unless:

4. ------ defined economics as a study of mankind in the ordinary business of life.

5. The growth of an economy is indicated by an

6. -----------equals revenue minus all explicit costs.

7. The father of New Economics is :

13. An economic system:

14. The regulatory mechanism of the market system is:

15. Which of the following is not an economic cost?

17. The invisible hand refers to the:

18. The invisible-hand concept suggests that:

20. The simple circular flow model shows that:

23. In economics the central problem is:

24. Macroeconomics deals with:

25. Microeconomics is not concerned with the behavior of:

27. Unemployment means that:

28. Opportunity cost is

31. Which one of the following is a normative statement?

33. Goods and Services bought and sold in:

34. In Product market money flows from:

35. In factor market suppliers are:

36. In economic activities which are the outflows:

37. Indian economy is:

38. Father of Economics:

39. Implicit Cost added in:

40. Business Economics is also known as………….

41. State whether economics is

45. Opportunity cost is term which describes

46. It is also known as prescriptive economics

47. ……cost are also known as Imputed Costs

48. There are ……branches of economics

52. Economics includes the following economic activities:

54. The principle reasons behind economic problems

55. Income flow is also known as------.

57. It is also called output flow or real flow

58. Accounting profit=------------Explicit Costs

60. According to profit maximization theory of the firm, management.

62. Managerial utility function is expressed as:

64. Invisible hand theory is given by----------

66. Accounting cost include:

67. If economic profit equal to zero then:

69. Economics is the study of:

71. Which of the following is not a Productive Resource?

72. Which of the following issues is related to microeconomics?

74. Economics deals primarily with the concept of

75. The opportunity cost of an item is

76. Factors of production are :

77. In the circular-flow diagram,

79. Scarcity is a condition that exists when

85. Economic profit is_________________ .

86. Economic profit is…

87. The principal-agent problem arises when…

88. Moral hazard…

89. Economic profit is the best measure of a firm's performance because…

90. Business Economics is also known as _______