SCDL Managerial Economics

0810612009
15

Total Questions Attempted

24

Total Marks Obtained

32 Out Of50

Passed

Industries, other than those needing compulsory licensing, will need no approval of government in such cities where population is

@ More than one million

o Less than one million

o t c-ore

o Less than one crore but more than 50 lakhs

Post compilation audit of the project is the last step in cost benefit analysis.

@ TRUE o FALSE

Economic profits means, total revenue minus

~ explicit costs

[!] implicit costs

[!] normal profits o only explicit costs

Demand forecasts may be based on

[!] Judgment of the experienced staff [!] On scientific analysis (statistics) D On individual opinion

[!] On public opinion

Features of the firm are

[!] It is a business unit organised under one ownership [!] It is a sole proprietorship

[!] It is a partnership or joint stock company o It is bigger than industry'

By public expenditure, we mean

@ Expenditure incurred by government

o Expenditure incurred bv flrms

o Expenditure incurred by households

o Income of general public

Costs made on operational charges are called

0 sunk cost
0 production cost
0 operator wages
0 other costs Demand curve faced by a monopolist is

@ downward sloping

o horizontal

o unitary elastic

o perfectly inelastic

When a factor is employed, but is not contributing to its fullest available capacity

Possibility orone factor to replace another, to achieve the same level of output

Advantages that accrue to a firm because of superior techniques and management

Advantages which accrue to a firm because offactors that are external to the firm

c_ __ ExI_e_r_nS_I_e_co_n_o_m_iB_s __ _j1 LI ln_te_rn_a_l_ec_o_n_om_i_e_S __ _j1 LI __ D_e_cg_re_B_O_fS_"_b_st_itu_ti_o_n _ __j

_."D",i",5 g",u",i 5"'8__,d"""'n8"'m"'p"lo"'v"m"'s,,nt ..... _1 I_-=-D",s g",r-"88,.0",IL,,,0 m=pl-,,8 m=8n"ta",ry,,--_

Unemployment

The city of ludiana has developed a big market for

@ textiles
0 silk
0 bangles
0 hosiery Cable network provided by local cable operators is a private good.

@ TRUE o FALSE

To the firm the implicit cost are the LI __ m_0_n8_v_p_a_vm_8_n_ts _ ___J1 which the self- owned and employed resources could have earned in their next best alternative use

credit payments

c_ ~pa~y_m_e_nt_b~Y_b_an_k __j1 Il_ __jg~o_ve_r_nm_en_ts_'_p~ay_m_e_nt_s ~

After charging skimming price a firm may subsequently

o Increase price

o Decrease price

o Stabilise price

o Keep changing the price

According to Keynes government intervention is essential to solve the problem of unemployment.

@ TRUE o FALSE

Marginal cost pricing should be taken as a guide for mOdilVing, I

Iprice.

I

L_ p_r_Ofi_lt_m_s_xl_m_iS_in_g ---"~ 1L_ M_sr_ke_t _"1

L_ c_on_s_u_m_e_re_x~pe_c_te_d ~1 1L_ c_o_s_te_l_ev_a_1in~g _"1

Wi1hou11 I all goods would be only private.

I

Governmen1 in1erven1ion I 1c_ M_ar_k_8t_m_8_c_ha_n_is_m _j

Price mechanism I I

L_ ~

Cost mechanism

Marginal product is

o the change in total product caused as a result of

o one additional unit of variable factor employed in

o combination with fixed factors

o the change in average product

Without I

I all goods would be only private.

I

Government intervention

Market mechanism

L_ p_r_ic_e_m_e_ch_a_n_ls_m _j1 Ic_ c_o_s_t m_ec_h_a_ni_s_m _j

......................... .::11 ..

0810612009

No of Correct Answers

t 9

No of Partially Correct Answers

No of Wrong Answers

Total Ques1ions Attempted

24

41 Out 0150.

Result

Passed

Before the point of effective demand is reached employment and output would go on increasing,

o TRUE () FALSE

In the Long run perfect competition the firms make

0 super normal profit
0 abnormal pront
@ normal profit
0 excess profit Pure profIt= Total revenue + (explicIt cnsts-jmpjlclt costs).

o TRUE @ FALSE

Demand curve faced by a monopolist is a downward sloping curve.

@ TRUE o FALSE

One of the monetary measures includes 1

Deficitfinancing

L_ v_a_n_at_lo_n_s_in_c_R_R ~1 1L_ v_s_ria_t_io_ns_i_n_p_"b_l_iC_e_xp_B_nd_it_"_re ~

Variations in public revenue

The relationship between income and consumption is

@ Positive
0 Negative
0 Neutral
0 Proportionate Principle ofl

Divisibility

1 is associated with public goods.

Non exclusion

Exclusion

Division

Relationship between input and output

M.P.::? T. P.I? Variable factor units

Short run, Long run, and Very long run

Law of diminishing returns

time-periods 1 LI p_ro_d_uc_tl_on_f_"_nc_ti_on ~1 LI ,a_w_o_fv_s_ri_ab_l_e _pr_o_po_rt_io_n_s __ ~

the cost of producing all units 1 LI m __ "_Q_in_'_1 p_ro_d_u_ct ~1 LI fi_rm_'s __ ac_ti_vity ~

Relationship between input and output

MY::'7 T. P.I? Variable factor units

production function lithe cost of producing all units

L_ ~

L_ tim __ e-_p_Br_io_d_S ~1 1L_ __ ,a_w_o_rv_a_ri_ab_le __ pr_op_o_rt_io_n_s __ ~

Short run, Long run, and Very long run

Law of diminishing returns

L_ m_a_:rg_in_a-=' p_ro_d_u_ct ~1 LI fi_rm_'_s _ac_tl_vityc_ ___J

Features of Pure Competition are

[!] Large number of buyers and sellers [!] Homogeneous products

[!] Free entry and free exit of firms D Transportation cost

Capital attracting standard is one of1he criterion for

o Dynamic profit

@ Reasonable profit a Maximisa1ion of profits a Produc1ion function

Competition forces firms 10

o Atlain monopoly

o In1roduce new products

o Increase profits

o Sale more

Public goods could be

[!] Roads
[!] Bridges
[!] Public parks
0 Cable television In case of1he established firm,

o because of large scale production,

o the inputs required are also to be

o purchased on a big scale

o purchased on small scale

Which of the following markets do not create barriers to entry restricting firms from entering the market?

o perfect competition

o monopolis1ic competition

o monopoly

o oligopoly

Economic profit' is also called as 'just profit'.

@ TRUE o FALSE

Managerial economics generally refers to the

[!] Integration of economic themywith business practice [!] Applied economics

[!] Business economics

o Econometrics

When the proportion of change in demand is exactly the same as the change in price, the demand is said to be

@ unitary elastic

o more than unitary elastic

o less than unitary elastic

o more than unitary inelastic

The accounting costs are entrepreneur's costs included under explicit costs,

o TRUE

o FALSE

Assignment Date

0111012009


17


[Total Questions Attempted

No of Wrong Answers

rTotal Marks Obtained

24

I Result

37 Out Of 50

I

Passed

I

Demand forecasts are usetul to 1irm 10r

[!] Long-term investment decisions [!] Budgeting polices

[!] Warehousing and inventory control o Calculating profits

Keynes defined LI M_ar~g_in_al_e_ffi_lc_ie_nc_cY_O_fc_ac_p_ita_I _j1 as the highest rate of return over expected cost incurred

producing an additional unit of an asset

Marginal efficiency of labour

L_ M_a~rg~in_a_l_effi_lC_ie_n_CY~O_f_la_n_d ~1 1L_ M_a_rg~i_na_l_effi_lC_ie_n_c_cY_Of_e_nt_re_cp_re_n_e_ur ~

Keynes defined LI M_ar~g_in_al_e_ffi_lC_ie_nc_cY_O_fC_a_p_ita_I _jI as the highest rate of return over expected cost incurred

producing an additional unit of an asset.

Marginal efficiency of labour

L_ M_a~rg~in_a_1 _effi_lC_iB_n_cY_O_f_la_n_d ~I LI M_a_r"-gi_n_al_e_ffi_ci_en_cc_Y_Of_e_n_tre~p_rB_n_e_u_r _j

various factors of production are I

petiectly mobile

I in perrect competition.

I

pertectlv immobile

L_ re_la_t_ive_IY~m_Ob_il_e _j1 LI r_el_at_iv_elc_Y_im_m_O_b_il_e ~

When cost is greater than revenue

@ Employment and output will decrease

o Employment and output will increase

o Employment and output will remain constant

o Cannot be determined

MR and

are same In a pert"ectly competitive market.

AR

TR

AVC

AFC

The prtce PoOlicy 001 uublic emorpnses slloOuld enable it 100 operate at

~ Least cost D Maximum profit

~ Maximum efficiency D Maximum inefficiency

The marginal cost curve is

@ U-shaped
0 V-shaped
0 Horizontal
0 Vertical TwoO or more goOoOds consumed in coOmbinalioOnloO satisfy a gtven want are

o Alternative goods

o Joint goods

o Substitutes

@ Complimentary goods

By consumption gap we mean

o Mismatch between income and consumption

o Mismatch between investment expenditure and income

o Mismatch between government expenditure and income

o Excess of exports over imports

A large number otlmyers will constnute a small demand and vice versa.

o TRUE @ FALSE

Costs that are aCUla11y lncurretl during process 001 producnon are acmal costs

o FALSE @ TRUE

Umler pertect comuetition prtce is equal to

~ AR
~ MR
0 Me
0 Quantity Production function .gives us an idea of the

o optimum level of input

o optimum level of production cost

o optimum level nt servlce of machines @ optimum level of output

The jmportant determinants of SUI)PIy are

D always referred to in relation to price and time D Government policy

D availability offactors of production o tastes and preferences of producer

ACis

0 Per unit cost
0 Overall cost
0 Marginal cost
0 Change in cost M<.uket forces are incapable of providinq full employment.

o TRUE

o FALSE

In short-perjod SUPI)1y is elastic.

o TRUE

o FALSE

General

Iforecast gives a total picture of the demand for all the products of a firm's products

Rough

Specific

Future

The perlods oOf accelel"atin'!.l inflatioOn in turope, the US wel"e

o 19705

o 19803

o 19903

o 19608

Tile slmue ot short Hill Aver<'1ge Cost {AC) curve is U.

@ TRUE o FALSE

Cost function denotes

[!] prices of such inputs as labour and capital material [!] rate of 0 utp ut

[!] size of the plant

o cost of technology

Black money can also he callecl

@ An unaccounted money

o Stolen money

o Not hated earned money

o Social change

Managerial economics consists of the use of economic modes of thought to analyse business situations, according to

General theory of employment. interest and money was written by written by

L- __ M_, _N_ai_r _'n_d_M_B_ri_am __ ----'1 IL- J_M_K_8_Y_nB_S ----'

Managerial economics is the integration of

The source of economic problems lies in

I Economic theory and business 101c__R_8_s_o_u_rC_8s_an_d_s_,_ar_,,_:1y _ _j

Prof" Mansfield

Prof Hague

.......... L ~ ..

I Assignment Date

0111012009


21

I No of Partially Correct Answers

No of Wrong Answers

Total Questions Atlempted

24


44 Out 0150.

Result

Passed

Expenditure of the government IS classified as required an~ I

I ,expenditure. I
Incurred I
Unstable I
more firms I are encouraged. I
more products
more consumers L_ N_O_lr_e~qU_"_e_d ~1 IL_ ~

................. I~---------------------~

If the industrial licensing policy of the government IS liberal, I

L_ m_o_re_s_e_1I8_rs ~1 LI ~

The process of entry ami exit would continue until each firm in a competnjve market is earning just the normal profit.

o FALSE

o TRUE

Uncler cost plus pricin'!.!, price so set covers

~ Cost of material
~ Cost of labour
~ Certain % of pro tit
0 Indirecttaxes There are I

Barriers

I to entry under monopoly

I

I Freedoms I

L_ c_o_m_p_li_ca_li_o_ns ~1 1L_ c_o_m_p_le_m_8_n_ls _j1

Chanqe in total cost caused on account of changes in level of output [Ire termed [IS

o MC

o AC

o AVe

o AFC

A. C. Harberler has shown that cost benefit analysis can he applied to the general equilihrium analysis.

@ TRUE o FALSE

Examples of government enterprises Ulllllillg 011110 pl·ofit 110 loss basts could he

o Hlndustan Antibiotics

o Maruti Udyog

o Hindustan Insecticides

o HMT

The consumer is wrongly hiased agaillst the

@ Quality of a commodity

o Quantity ofa commodity

o Availability ofa commodity

o Packing or a commodity

Total quantity of output produced in physical units by a firm during a I year

L_ ~p~.~n~Od~O~f~W~.~.k ~1 LI ~p_er_iO_d_m __ m_on_t_h ~

period otnme

Production grves us an idea oflhe optilllum level ofthe outnet and the optimum eml)loyrnelit of tile vartable inputs

@ TRUE o FALSE

The law 01 demand

[i] Usually re1erred to the market demand

[i] Illustrated with help of market demand schedule

[i] Functional relationship between price and demand o Explains positive relation between price and demand

Where there exists a close sunsnture ill the relev.:mt price ranue its (Iemand will tend to he

0 perfectly elastic
0 elastic
0 inelastic
0 perfectly inelastic Forecasts are necesserytcr

[!] Fulfilment of objectives of the plans [!] Preparation ofa budget

[!] Stabilisation of employment and production D Current planning

The producuon which <lel)ellded on the mercy of natural conditions is

@ agricultural produce

o indus1rial produce

o consumer goods

o durable goods

The production which deuendNI on the mercy or natural conemons is

@ agricultural produce o industrial produce a consumer goods a durable goods

Aggregate SUPI)lyfunctioOn relatively stahle runcnon in

0 Short run
0 Long run
0 Moderate run
0 Very long run Oemaml is hacked hy necessary purchasing UoOwer.

@ TRUE o FALSE

Quantities or some factors is kept tlxed but the ether factors is varied, studied in

a Laws of returns to scale

o Laws of optimum combinations @ Law of variable proportion

a Laws of increasing returns to scale

standardising and grading agencies in India are such as

0 AGMARK
0 lSI
0 CBI
0 RAW An lndlvidual's demand tor a couuuodlty is generally determined by tactors such as

[!] Price of the product
[!] Income
[!] Tastes and habits
0 Desire comracnon or supply is traced hythe doOwnward movement on the SUPI)1y curve

@ TRUE o FALSE

Land

Labour

Rent

Wages

Capital

Enterprise

Interest

Profit

Worker

Input

1 Assignment Date

3010412009


20


I No of Wrong Answers


24


44 Out Of 50.

Result

Passed

The taw of diminishing returns is appticabte to agriculture where the state oftechnotogy is gillen and

D inputs
D water
D resources
l> constant Under perfect competition price is equat to

D AR
D MR
D MC
D Quantity The supply curve stopes downwards from lett to right.

o TRUE ® FALSE

Equilibrium price

Imperfect competition

interaction of total demand and Ie I Price maker

Perfect competition Classification of market

perfect knowledge I I Mrs. Joan Robinson

nature of competition

Transport cost

Very long period forecasts are for a period of over I

10

I years.

15

20

The dynamic theory of prmrt was explained by

@ Clark

o Hague

o J M Keynes

o Joseph Schumpter

Monopoly is an example of imperfect market.

® TRUE o FALSE

Depreciation is calculated with help of

~ Diminishing Balance Method ~ Annuity Method

~ Service Unit Method D Last-In-First-Out method

The Klll/Tlesian psychological law of consumption establishes a relationship between consumption and

@ Income
0 Savings
0 Employment
0 Infiation Classical economists believe that in capitalist economy automatic adjustments lead t0.l I. I
Government lnterventlon I I Full employment

Business cycles I I Economic fiuctuations In case of goods like sugar, cement, paper government accepted system of LI D_u_a_l_p_r_ic_e_s __ _j1 to control prices in

India.

Shadow prices

L_ S_k_i_m_m_in_g_p_r_ic_e_s ~1 LI I_m_it_a_tiv_e_pr_ic_e_s ~

The theory of production function can also explain the possibility of I

disguised unemployment

employment

~ u_n_e_m_p_l_o_ym_e_n_t ~1 ~1 d_i_S_g_Ui_S_e_d_e_m_p_l_o_ym_e_n_t ~

Demand is determined by

~ Price of the product

~ Relative prices of other goods ~ Tastes and habits

D Slope of the curve

Under perfect competition, the point where demand and supply interact each other and determine the price is called as

0 high
0 subsidised
@ equilibrium
0 normal Increase and decrease in demand

D Are used to explain changes in demand

~ Are change in the factors determining demand ~ Changes in other than price

D Changes in price

1

I

Time-series analysis considers the period of

0 1 to 3 years
@ 2to 3 years
0 3to 4 years
0 4to 5 years A downward movement from one point to the another on the same demand curve implies the

o Contraction of demand @ Expansion of demand

o Income elasticity of demand

o Price elasticity of demand

Guideline followed by the government of India on pricing policy

D PSUs should be economically viable

D When PSUs compete with private sector, market forces would determine the price D Cost plus pricing method

D Marginal cost method

The demand for life s<llling drugs is elastic.

® FALSE o TRUE

Aggregate expenditure in a three sector (closed) economy is equal to

@ C+I+G
0 C+I
0 C+I+Y
0 C+I-G A large number of buyers will constitute a small demand and vice versa.

o TRUE @ FALSE

In India. in recent past prices have risen on account of rise in prices of edible oil. pulses, tea and sugar.

® TRUE o FALSE

Defects of market mechanism are

~ Inequalilies in income and wealth ~ Emergence of monopolies

D Equal distribution of income

D Existence of perfect competition

Cooperatives can protect the interest of

@ Consumers
0 Government
0 Companies
0 Markets 3010412009

17

[ No of Partially CorrectAnswers

No of Wrong Answers


24

[ Total Marks Obtained

38 Out Of 50.

Result

Passed

National income accounting helps one understand and evaluate
@ GroVv'lh performance of an economy overtime
0 Time value of money
0 Purchasing power of money
0 Productivity of labour

A firm can stabilise its output where marginal cost is equal to: I I. I

I MR I I AR I

I AC I I AVC I

Keynes in 1936 wrote 'the general theory of output and income'.
@ FALSE
0 TRUE
Theory of economic growth deals with
D GroVv'lh of capacity to produce
D Slow groVv'lh of produce
D Maximum economic groVv'lh
D Making goods and services
Keynesian theory is applicable in long run.
@) FALSE
0 TRUE =
The number of buyers and sellers operating under perfect competition is
@ large
0 small
0 very less
0 unlimited For the purpose of demand forecasting products can be classified as

~ Capital goods and consumer goods ~ Durable and perishable goods

D Agricultural goods and allied industrial goods D Industrial goods and allied industrial products

Keynes opined that private enterprises fail to generate

@ Demand
0 Supply
0 Costs
0 Profits Under perfect competition

D the number offirms in the industry is very large D each firm is very small in slzs

D Action of a firm does not affect the market supply D It is encouraged with a view to promote the exports

Unavoidable costs are made when firm faces
0 growth
0 development
0 extension
@ contraction

Externalities that create a bad social effect are called,1 I, externalities. I

I Positive I I Negative I

I Neutral I I Objective I
Micro economics studies economy in
@ Specific
0 General
0 Totality
0 A('1m~(1:=!t~.:: Rise in money supply causes price level to rise through

o Rise in aggregate demand

o Fall in aggregate demand

o Building of inventories

o Cost cutting

Marginal cost curve for a firm in a competitive market is also its

o demand curve

o supply curve

o shut down indicator

o any of the above

Intuitive pricing does not take demand for the product into consideration.

o FALSE

o TRUE

Before the point of effective demand is reached employment and output would go on increasing.

o TRUE

o FALSE

Elasticity of supply is infinite

Perfectly Elasticity of supply

'----- es_=_8 __j~ LI e_s_=_1 -----'

Relatively inelastic supply

Elastic supply

L_ e_s_~_1 ~1 LI e_s_>_1 ~

L_ es_>_2 ~1 1L_ e_s_=_o ~

While deciding price, cost plus pricing method considers fixed and II1Iriable cost and a certain percentage of prmrt

o TRUE

o FALSE

and prices.

Forecasts

L_ E_m __ p_ir_ic_a_I ~1 LI E_xp_e_r_ie_n_c_e ~

Internal Economies ilMlllies

D Advantages of large-scale production D Low cost of production

D It avails benefits of cheaper finance D Availability of banking facility

Ass.essment: Assignment for Managerial Economics-I

Registration Number: 200801925 Name: Alfia Fa1hima

Attempt: 2

Duration 00:21 :24

Result for this Assignment

Assignment Date

2910112010

['N'O'""'Of Correct Answers

19


No of Wrong Answers

T01al Questions Attempted

24


410u10f50

Result

Passed

Price in perfect competition market

is not fixed by buyers and sellers

is determined by interaction of demand and supply is determined automatic price mechanism determined by sellers

is not fixed by buyers and sellers

is determined by interaction of demand and supply

is determined automatic price mechanism determined by sellers

perfectly immobile

'- rB_la_t_ive_IY'--m __ Ob_il_e _j1 LI '_el_Bt_iv_elc_Y_im_m_o_b_il_e _j

A market where

exist, optimum social welfare cannot be attained.

Externalities

Internalities

Government

Resources

General theory of employment, interest and money was written hy

o Prof. J R Hicks

o Prof Lionel Robbins @ Prof. J M Keynes o Prof Amartya Sen

Historical cost is

[!] cost of purchase or a capital asset [!] when it was purchased,

[!] say, 1994

o more than 50 years

Which one of the following is "very close e){amule of mOnOI)oly1

@ operating system ofMicrosofi

o ice cream brands

o wheat tarmlnq

o institutes offering MBA education

Tile term "elasticjty of demand", when used without qualifications is commonly referred to <'IS price elasticity of demand.

o FALSE @ TRUE

A firm umlel· monopoly in the long run can make

[!] Normal profits

[!] Supernormal profits

o Losses

o Surprises

Uncler pertect comnetmon, firm can be adjusterl its supply to the rlemaml hy changing some factors.

o TRUE

o FALSE

The marginal cost CUlW is

@ u-st apec
0 V-shaped
0 Horizontal
0 Vertical Tile shape of short run Avemge Cost {AC} CllIW is U.

@ TRUE o FALSE

Macro economics is the stmlyof

o Consumer behaviour @ Economy as a whole

o Individual demand

o Individual supply

Aggregate supply function represents

o Cost of production

o Supply price D Demand price D Cost of labour

For a IHII"e puhlic good 111a1"uinal cost would he zero or close to zero.

@ TRUE o FALSE

Prica > AFC+ I

Ave

I +% of profit

TVe

MC ASC

The original quantity supplied Net change in quantity supplied

The original price Net change in price

QS

The original quantity supplied

Q8

Net change in quantity supplied ?Q

The original price

Net change in price

? P

?S

QD

In case of a pel1ectly elastic demand, the rlemand CUlW will he a

o vertical straight line

o sloping down left to right @ horizontal straight line o sloping up ien to right

Which principle does not al)ply if the goods are indivisible

0 Participation
0 Exclusion
0 Affection
0 survival Total receipts minus total expemliUlI"e is

0 Accounting profit
0 Economic profit
® Gross profit
0 Net profit Cost function denotes

[!] prices of such inputs as labour and capital material [!] rate of output

[!] size of the plant

o cost of technology

Marginal cost is I

additional cost made to total cost

additional cost

end cost

final cost

e=1QRP:w: PiO

[!] the original demand [!] the original price [!] change in demand o price ofgiffen goods

Assessment: Assignment for Managerial Economies-II

Registration Number: 200801925 Name: Alfia Fathima

Attempt: 2

Duration 00:25:53


Assignment Date

2910112010


18

No of Partially CorrectAnswers

No of Wrong Answers


24


42 Out Of 50

Result

Passed

Opportunity costs are also known as

The difference between average total cost andaverage fixed cost shows

alternative costs

The difference between average cost and average revenue is

Implicit costs are the cost

I of resources owned by the firm

c_ n_or_m_"_I,--pr_ofi_11 _j1 LI fi_IX_8d_'_o_s_ts _j1 LI VO_r_i"_b_18_C_os_t _j

I

average profit

The elasticity Qf clemand analysis distinguisl1es demand for

~ a product right from a perfectly elastic ~ pertettlv inelastic

o and their practical significance

o and supply of goods

In the Long run perfect competition the firms make

@ super normal profit

o abnormal profit

o normal profit

o excess profit

In the case of perfectly inelastic, demand remains unchanged whatever may he the change in prjce.

o FALSE @ TRUE

In general most goods possess elements of

~ Public-ness
~ Private-ness
0 Cooperativeness
0 Complementarily MethoOcl or pricing that has the UoOtential or luoviding a scientific base tor luicing PoOlicy is

a Imitative pricing

@ Experimental pricing

o Intuitive pricing

o Skimming pricing

Cooperation exists in

o Marketing

o Credit

o Transport

o Marketing of agricultural products

The consumer is wroOngly hiased against the

@ Quality of a commodity

o Quantity or a commodity

o Availability ora commodity

o Packing ora commodity

Production function gives us an idea of the I optimum level I of the output and the optimum employment of the

'---------------'

variable inputs

low level

high level

medium level

Some indMduals ami groOups consume <'I l<'Irge share of national output, while others consume only a small share, because of

0 Large income
@ Inequality of wealth
0 Hard work
0 Unemployment When the (Iuantity or variable inpm increases tile oOmulIt alsoO

@ increases
0 decreases
0 remains same
0 gets postponed Economic ot income ami employment are mater fields ot micro economics.

@ FALSE o TRUE

Targets that toO he achieved by a firm in order to attain equullmum is coudmon or eo(luilihrium.

@ TRUE o FALSE

ToO SQIve the problem of unemployment Keynes has advocated government juterveutiou through

@ Fiscal policy

o Monetary policy measure

o Tax measure

o Income policy measure

A normal demand curve has I

Negative slope

Positive slope

L_ u_p_w_a_rd_s_l_op_e ~1 LI H_o_riz_o_nt_a_ls_lo_p_e ~

Demand torecastam is the method of predictinq the present demand of a finn's product.

@ FALSE o TRUE

Features or Pure Competmon ;jue

~ Large number of buyers and sellers ~ Homogeneous products

~ Free entry and free exit offirms o Transportation cost

In case of the established firm,

~ because of large scale production, ~ the inputs required are also to be ~ purchased on a big scale

o purchased on small scale

IdentlficatiQn or a project is a basic step in cost benetn analysis.

@ TRUE o FALSE

Hike in oil prices and glQh<'l1 intlatiou were reasons behind

@ Price rise in India

o Price fall in India

o Controlled prices in India

o Global unrest

Fmul"e- exuectation of de-crease in price-

o Tends to less consumption

o Theywantto hold money

o They increase consumption in future

o No change in consumption

One of the monetary measures includes 1

Variations in eRR

Variations in public expenditure

L_ v_a_rl_at_'o_n_s_ln~p_U_bl_lC_r_ev_e_nu_e ~1 LI D_e_fic_lt_fi_na_n_c_'n~g ~

i'i'NAME1

@ cost-input relationship

o tnoutnmcnon

o labour and manager relationship

o capital- labour relationship

0211012009

19


24


42 Out Of 50

Passed

Expansion or contraction in supply of capital may affect the

Fortunes of business

Supply

Demand

Consumption

Defence is a good example ofl

Public good

Private good

Joint good

Complementary good

The level of effe-ctive demanel determines

0 Output
0 Employment
0 Income
0 Level of inflation "Economics is (I science which studies human behaviour (IS a relationsljjp between ends and scarce means which have alternative uses," W(lS said by

a J M Keynes
a Adam Smith
a Alfred Marshal
@ Lionel Robbins PalliciUffiion in m.uket economy is .guided hy motive of

o Maximum private profit

o Maximum social benefit

o Maximum social cost @ Maximum social profit

Bilateral monopoly involves monopoly on buyer's (IS well as supplier's end,

a TRUE a FALSE

Prof. J M Keynes wrote (I book on

~ Employment
~ Interest
~ Money
0 Consumer surplus The city 01 Kashmir has suecialised in the manufacture 01

a textiles
0 silk
a dolls
@ shawls Concept of m.uket is

[!] a place, street, or a building

[!] buyers and sellers are in close contact

o transaction over telephone/internet

o Sellers always get high price fortheir goods

The law of SlIl)I)1y reflects

[j] the general tendency of the sellers [j] in offering their stock ofa commodity, [j] for sale in relation to the varying prices D for sale in relation to the fixed prices

Explicit costs, implicit costs and normal profits together form I

economic cost

1 of a firm.

Fixed costs

c_ a_cc_o_u_nt_in_g_co_s_t --'1 LI m_a_rg_in_a'_c_os_t ~

Equal distrilnnion or income leads to

[!] More market demand

[!] It influences market demand [!] More consumption

o Less consumption

A firm initiating changes in price is caged

0 Price taker
0 Price initiator
0 Price follower
@ Price leader Research contributes to jmroductlon 001

o New methods of production

o Reduction in quality

o Overwork

o Technical problems

Pure pubhc goods are known for their indMsihility

@ TRUE o FALSE

Keynesian theory is a

@ Shott run analysis

o Long run analysis

o Moderate run analysis

o Very long run analysis

In projection approach tile past experience is protected juto the tuture.

@ TRUE o FALSE

FQI"IllUI<'l 001 cost-input relationship is Q= A.L<'I. K 1-1

o TRUE @ FALSE

Tile difficulty in transport

[!] may cause

[!] a temporary decrease in the supply [!] as goods cannot be brought within time o may not cause

A study of a firm that manufactures readymade ogarmems comes under the purview of

o Theory- of production

o Thenrv ut pnce

o Micro Economics

o Macro economics

Without I

Government intervention

I all goods would be only private.

Market mechanism

'--- p_r_ic_e_m_e_Ch_"_n_iS_m _j1 Ic_ c_o_s_t m_eC_h_"_ni_S_m _j

Name: Hunnv Muthreia Atternpt;t

Duration 00:11:50


Assignment Date

0111011009

No of Correct A nswers

20

No of Partially Cor reel Answers

No of Wrong Answers

Total Questions AttemrJted

24

rotar Marks Obtained

410ulOf50

Result

Passed

Ecunomic cost is comnjnauou or

~ exoucn coete
~ imoncit costs
~ norrnatpronts
D aonormar pronts A producer jn a static society works like a Imid manager.

o TRUE

o FALSE

0 expucrt costs
@ implicit cnsts
0 sencosts
0 owners coste Micro economics studies the

D ttaencnv or oemano D Marginalrevenue D Marginalcosl

D sconomfc urc-tn

Relatively rnerasuc demand isl

ress man i

between 1 ano z

moreman i

ecuatto n

When the teeters of prcdnctlon

~ are easnv evaname auowonces ~ morenwesimentts encouraceo ~ dueto befter refums

o are not easnv evanaore euowpnces

In tile snortpenon, ,Iemaml in general willl)e less etastrc.

@ TRUE o FALSE

When e-S, the price elasticity of uemend is

@pertectll'inelastic

o oerrecnv eraenc

o Retatlvelv elastlc

o Ratatrcehlnelastlc

One of the major factors affectinll ejasticrty of demand is

@ naiure or commoons

o consumers behasrour

o s upplv ufinputs

o nrms aounsto proouce

=errect competition hasl

Many

IbUlierSand sellers

Moderate

Few

Adequate

For consumonon of prfvate noons its purchase I)y I"Wini! tne nnntpnce is essermar.

@ TRUE o FALSE

Mar!'::et economy is jnsuumenter inlninllinll economic enuemv,

o FALSE @ TRUE

Externalities are else referred to <'IS

~ spmover enecte ~ Nernhbour errect ~ Third party effects D Inventions

Demand curve thus deplete theplcture of data contained in me

0 suoow scneoure
@ Demand schedule
0 Desire schedule
0 wants scneoure Effici",ncy of prodnctlon and enoceucn 1i",long to til", branch of economrc theory coned

@ Welfare economics

o Macroeconomics

o Theorv otprlce

o rrooucnon nmcuon

In a market econcnwvery litlle etteuucn is l);1Iid towards

@ werrare or socrew

o rersonar oront

o Personal benefits

o Prfvate co sts

cerrect comoennon

L<lrge number of producers I LI __ D'_m_'_'d_'_'d_,_,pccp-,-I,_~

Equilibrium price

narketoenoo

Long run

I Administered price mechanism I

Non perishable goods

Perishable goods

Automatic price mechanism

Larseez raire

we mean no government intervennon

Ceteris paribus

Regulated economy

Organisation

TIle jncrementeumncune is comments used in Lusjness decisions.

o TRUE

o FALSE

___________ r-

Score Card

Assessment: As.signment for M3nilgeri31 Economics

Registration Number: 200762250 Name: Siddharth Patkar

Attempt 1

Duration 00:24:43


Assignment Date

2210512010


38

("N"O'""'OfPartiallV Correct Answers

No ofVVrong Answers


48


85 Out Of1 00

Result

Passed

In LI __ c_om_:_po_s_it_8_m_"_na_:Q_:e_m_e_nt _ _:_lmethod the opinion of the experienced persons with the firm are collected and a

committee or the general manager of the firm analysis this information and forecasts the demand for the firm's product

Collective opinion

L_ 8_a_m_:p_le_S_U_~_ey'--- ~1 LI p_"_ne_l_of_8_X_:pe_rt_s -'-

Features of monopoly are

[!] Single producer [!] Barriers to entry'

[!] No close substitutes to the product D Perfectly elastic demand CUIY8

costs which increase because of the expanslou ot a tnm are called

0 sunk
0 unavoidable
0 common
@ incremental Actions ot l1nysingle Imyel" or seller, in a competitive market, will

o cause a noticeable change in price of product

o have a little effect on price of the product

o have a no impact on the market price

o change the market equilibrium

Products produce-d lJy different firms under CoOmpe1iti'lle- market are- nomoqenous,

@ TRUE o FAL8E

vanous methods ot apluaising investments jncjude

[!] Pay back period
[!] Internal rate of return
[!] Net present value
0 Interest coverage ratio Managel"ial economics is a hyluid or

o Management and Commerce ® Economics and Management

o Economics and Accounting

o Econometrics and Organisational Behaviour

M<.uket economy is jnstrumental in bringing economic etIU<'Ility.

o FALSE @ TRUE

Wnh the technological advances, the flow of output increases from the gWen inp,n

@ TRUE o FALSE

increasing returns to scale

I

If the output rises in the greater proportion than that of the increase in factor inputs, it is referred to as

decreasing returns to scale

'--- '_0_n8_1_0n_l_r8_1u_rn_8_1_0_8_"_18 ----'1 1,--- 8 ,_o_n_om_i 8_8_01_8_'_0 1_8 --"

Under the decreasing returns to scale, the marginal output curve slopes 1

downward

I

1'--- h_or_il_on_la_I ----'1 1'--- V_8_rt_i'_al --"1

I upward I

Standardising ami grading agencies in India are such as

0 AGMARK
0 lSI
0 CBI
0 RAW Under monopcjyfjrm and industry are the same.

@ TRUE o FALSE

cress elasticity refers to the responsfveness of demand for a commodity to a given change in the price of aran

o related commodity @ substitute commodity

o competitive commodity

o inputs

Illlhe case of ClOSS elasticity, ontne basis of relationship

o we can group products

o we can explain substitute goods

o we can explain complement goods

o we can identi1\! usefulness of goods

The concept of cpportunb costs is an important measure the I

implicit costs

I of a firm.

explicit costs

total costs

accounting costs

Each short run average cost curve

Marginal cost curve

MC is given by

Average total unit cost curve means

has to touch the long run cost curve

U shaped curve

has the shape of an inverted U

the slope ofthelYC curve or slope of the TC curve.

the cost of producing all units

the cost of producing one unit.

Each short run average cost curve Marginal cost curve

I has to touch the long run cost I®I has the shape of an inverted U

Me is given by Average total unit cos1 curve means

the slope of the lYC curve or 1191 1he cost of producing one unit.

U shaped curve

the cost of producing all units

Monopolistic compe-tition is waste1ul as

~ It involves selling costs

~ Non utilisation offull capacity ~ Lack of specialization

o Resources are optimally utilized

Keynesian theory is also a theory ofl

Deficient

I aggregate demand.

Sufficient

Moderate

Adequate

An example of private good could he

@ Television

o Roads

o Bridges

o Door Darshan Network

Market mechanism brings I

Equilibrium

I naturally.

Inflation

L_ I_nl_er_n_al_io_n_al_lr_a_de ~1 1L_ F_o_re_ig~n~p_a_rt_ic~iP_al_io_n ~

L-_D_iS_Q_Ui_S_ed_u_n_e_m_p_lo_vm_en_t_--,1 LI __ D_e_Q_rS_e_O_f S_U_b_St_i1u_t_io_n_-----'

When a factor is employed, but is not contributing to its fullest available capacity

Possibility of one factor to replace another, to achieve the same

level of output

L- __ ln_te_rn_'_I_ec_o_n_om_iB_S __ --'1 LI E_~_er_n_al_e_co_n_o_m_ie_s __ ~

Advantages that accrue to a firm because of superior techniques and management

Advantages which accrue to a firm because offactors that are external to the firm

L_ U_n_8rn_:_pl_oy:_m_8_n_t __ _jl LI __ D_8c:_gr_8_8_of_'_o_m-'-p_18_m_8_nt_arv_-----'

lOI1'!.1-ueriod torecasts are torecasts tor a pel"iocl oOf 5 to 10 years.

@ TRUE o FALSE

For a firm in monopoly price is I

Greater

Ithan AC

Lesser

Equal

Smaller

The law ot demand descnbes tile changes in demand in relation to tile changes in

0 Income
@ Price
D Expectations
D Number of buyers Tile demand for a product is influenced by

~ the distribution of income [!] prices of related products

o tastes of the consumer

o Supply

Firms produce multiple products as they have I

Excess capacity

Less than excess capacity

L_ o~Pt_lm_a_l_ca_p_a_ci~~ ---'1 1L_ U_n_de_r_ut_ili_ze_d_c_a_pa_c_I~~ ~

Firm under perfect competition should cover at least average variable cost to continue its busmess in the market.

@ TRUE o FALSE

National income accounting helps one understand and evaluate

o Omwth performance ofan economy overtime

o Time value of money

@ Purchasing power of money o Pmductivitv of labour

OligoOlwlyfirms may sell

~ Homogenous products D Heterogeneous products ~ Differentiated products D Quality products

Managerial economics is decidedly the applied branch ofl

Distribution

Knowledge

Income

Keynes advocated socialistic pattern of society

@ FALSE o TRUE

Production

Actual costs means the costs hased on tile forecasts or producnon and prices

@ FALSE o TRUE

Service unit

Annuity

The amount of depreciation is large in the initial years in the method of I

Diminishing balance

Straight-line

IndMsihility means

@ Each citizen of society does not have equal share in its benefit

o Proper share in benefits

o Equal share in benefits

o Necessary share in benefits

While rorecasnnn the demand tor a proOduct we have to conskter

~ The level of uncertainty ~ The nature of competition

~ Elasticities of demand of the product D The perishability of the commodity

Tile period ot great depression was

0 1914-1918
@ 1929-1933
0 1939-1945
0 1947-1949 MacrQ econouucs studies economy

[!] At large
[!] In general
0 In specific
[!] As a whole Demand in econonncs also means clemand per unit or time.

@ TRUE o FALSE

Charging different prices to different customer for the same product is called I

Price discrimination

Product differentiation

L_ p_r_Od_u_c_th_o_m_O_g_en_e_iN ~1 LI p_ri_ce __ un_if_o_rm_iN ~

Costs which increase because ot expansion of a firm are called (IS

0 extra costs
@ incremental costs
0 extended costs
0 unavoidable costs While deciding prjce, cost plus luicinu method considers tlxed ami variable cost and a certain percentage ot protlt

o TRUE

o FALSE

Principle ofl

Divisibility

I is associated with private goods.

Non exclusion

Exclusion

Division

E){amules or government enterprises runninu on no urQfit no IQSS nasts eQuid he

~ Hintiustan Antibiotics

o Naruf Udyog

o Hindustan Insecticides [!] HMT

Name: vlkas Gupta Attempt: 2

Duration 00:16:25


Assignment Date

1611112009


13


No of Wrong Answers


14


28 Out Of 30

Result

Passed

The law of demand is usually referred to the

0 Individual demand
@ Market demand
0 A firm's demand
0 Industry's demand Break through in the production of fertiliser and high-quality seeds leads to bad crop.

o TRUE @ FALSE

The types of costs are

~ accounting costs
~ economic costs
~ nppnrtunitv costs
0 substitution cost Monopoly is an example of imperfect market.

@ TRUE o FALSE

The concept of production function gains importance only because

L_ ~

Distribution

Income

Disinvestment

Dual Pricing

Deficit Financing

Fiscal deficit

Gap between public expenditure and public revenue

revenue income minus revenue expenditure

Sale of government shareholding

Charging two different prices from rich and poor

One buyer and one seller

Increases supply of money

Disinvestment ,-D--;ua:;-l_p_ric.,-in_:9:,----,,;o----;----:-_-----,

I Sale of government share holding I I Charging Wio different prices Ie

Deficit Financing Fiscal deficit

In ere a ses sup ply of mo n ey I rl --;G:-a-p-'-b:-etw-ee-n-p-u-'-b:-I ic-e-x-pe-n:-d:-itu-r-e '10

revenue income minus revenue expenditure

One buyer and one seller

Investment function is determined I

L_ ~

Rate of interest

Rate of intlation

Rate of unemployment

Wage rate

The commission for agriculturlll cnst and prices is guided byfollowing objedives

o Raising productivity through assured remunerative prices to farmers

o Procuring sufficient quantities of rice and wheatfor running the PDS

o Promoting a desirable inter crop balance

o Procuring sufficient quantities ofjowar and bajara for running the PDS

Price control measures used in India on suppty side include

~ System of dual prices

~ Fixation of maximum prices

o Monetary- management

o Fiscal management

In case of such quasi private or quasi public: goods when element of private ness is dnminant, they are termed as

0 Public goods
@ Private goods
0 Joint goods
0 Composite goods What fails to pnruide full empluvrnent

0 Market mechanism
@ Government
0 Exports
0 Duopoly Name: Ouurav Nanna

Attempt: 2 Duration 00:08:38


Assignment Date

1611112009


13


No of Wrong Answers


14


28 Out Of30

Result

Passed

Patent and copyrights are a major source of

@ monopoly
0 monopsony
0 duopoly
0 dumping An infinite demand at the given price is a core of

o relatively elastic demand

o relatively inelastic demand @ petfectly elastic demand o perfectly inelastic demand Production function gives us

~ an idea of the optimum level of output ~ and the optimum employment

~ of the variable inputs

o tastes and preferences of producer

Price elasticity refers to the degree of responsiveness of demand for a commodity to a given change in its

@ price
0 supply
0 quality
0 appearance Slope of supply curve is

0 negative
0 decreasing
@ positive
0 downward Advertising forms an integral part of decision making and

L_ F_°_~_a_r_d~p_la_nn_i~ng~ ~1 LI E_m~pl_oy~m_e_n_t_or_la_b_O_Ur_s ~

L_ D_i_st_rib_u_ti_on ~1 LI C_o_m_:_p_et_iti_o_n _j

Sunk costs

Incremental costs

Fixed cost is known as

Variable cost can refer to

accounting cost

cost made on expansion offirm

U shaped curve

___ ....;.p_ri_m_e_co_s_t 1 1 __ ""op""e_r,_ti_n;.g_Co_s_ts_a_lo_n_, __

Sunk costs

Incremental costs

costs borne whether there is expansion or net

e I cost made on expansion offirm

Fixed cost is known as

Variable cost can refer to

L_ p_'_r_im_e_c_o_st ~1 LI o_:_p_er_a_tin~g_'_C_o_st_s_a_lo_ne _j

accounting cost

U shaped curve

The word profit has the same meaning to businessmen, accountants, tax collectors, workers etc.

o TRUE @ FALSE

There are I

Barriers

Ito entry under monopoly

Freedoms

L_ c_o_m_p_li_ca_t_io_nS _j1 LI c_o_m_p_le_m_8_n_ts _j

Aggregate supply function is positively sloped curve that becurnes perfectly inelastic: subsequently.

o TRUE

o FALSE

When a firm I

Small

pn size it may not need or afford an organised forecas1ing system

Very large

Large

Medium

Various methods of calculating depreciation are

[!] Straight line method

[!] Diminishing Balance Method [!] Bervice Unit Method

o Inventory valuation method

Monopoly profit is profit because of the business skills.

o TRUE @ FALSE

The law of variable proportion

[!] examines the production function [!] with one factor variable,

[!] keeping the quantities of other factor fixed o examines the supply function

Registration Number: 200741834 Name: Subhash Sharma

Attempt: 4

Duration 00:41 :38


Assignment Date

2310712009


35


No of Wrong Answers

10

48

75 Outof1 00.

x

Elasticity of demand for salt can be represented I e::O

8-1

8<1

8>0

With the technological advances, the flow of output increases from the given input

o TRUE

o FALSE

Assessment: Assignment for Managerial Economics

Registration Number: 200742300 Name: Neera Devi

Attempt: 1

Duration 00:31 :14


Assignment Date

2010712009

37

No of Partially CorrectAnswers

No ofVVrong Answers


48


80 Out Ofl 00

Result

Passed

___ ~::::5:::::------

x

Time-period does not affect demand fnrecastinq.

o TRUE @ FALSE

Market demand curve is derived from indMDual demand curves

o Vertical summation @ Horizontal summation

o Horizontal subtraction

o Vertical subtraction

Demand in economics also means demand per unit of

0 Goods
0 Afirm
@ Time
0 Industry' The stage of negative returns comes in when

@ T.P. decreases, M.P. negative, A.P. decreases

o T.P. increases, M.P. zero, A.P. decreases

o T.P. increases, M.P. zero, A.P. increases

o T.P. increases, M.P. increases, A.P. increases

Sunk costs Incremental costs

costs borne whether there is Ie I cost made on expansion offirm

Fixed cost is known as Variable cost can refer to

operating costs alone I I U shaped curve I I prime cost

I accounting cost I A riqhtward shift in the supply curve is because the supply has I

increased

decreased

constant

stopped

The concept of giffen goods was not introduced by Robert Giffen.

o TRUE @ FALSE

Laissezfaire

I we mean no government intervention.

Ceteris paribus

c_ R--'8Q:_u_la_t8_d_8_c_on_o_m_:y _j1 LI O--'rQ:_a_n_iza_t_io_n _j

A monopolist is a price taker.

@ FALSE o TRUE

Market period is concerned to

o Related to few hours orfew days

o Related to perishable goods

o The entire supply is to be disposed offon the same day

o Supply can be held back from this market

The rise in the cost of production of a commodity can be due to I

various reasons

some reasons only

Sunk cost

Fixed costs

There are many firms in a perfectly competitive market selling

@ homogenous products

o similar products

o heterogeneous products

o differentiated products


[!] Single producer [!] Barriers to entry

[!] No close substitutes to the product o Perfectly elastic demand curve

An elolample of private good could be

@ Television a Roads

o Bridges

o Door Darshan Network

Principle of exclusion is applicable to public goods.

o FALSE

o TRUE

Monopoly profit arises because ofl

Monopolist

c_ D_'_st_rib_u_t'_on _j1 1c_ c_o_m-'-p_et_lti_on _j

Business skills

One of the important profit standards is I

Plough back

Plough forward

L_ PO_li_tic_a_'_st_an_d_a_'d _j1 1c_ A_nn_u_iW_jm_et_h_od ~

PDS has become a stable and permanent feature of India's strategy to

[!] Control prices

[!] Reduce fluctuations in prices

[!] Achieve equitable distribution of essential consumer goods o Ensure regional balance

Transaction ground for buyers and sellers

Total Revenue

AR=MR

MR=MC

Equilibrium ot a firm I I Perfect competition I Total receipts from the sale ora
given output

Oligopoly I I Monopoly I I Market An exception to law of supply is given by the

backward bending supply CUr1e I I forward bending supply CUr1e I LI __ h_or_iz_on_t_'I_S_U,-,PP--,IY,--c_u_rv_8 _ _j

L_ __ ve_rt_ic_al_s_U--,PP,--IY--,C_u_rv_e __ ~1 LI ra_w_m_a_te_r_ia_ls ~

The numerical value of relatively inelastic demand lies between

@ zero and one
0 one and two
0 one and 5
0 zero and 2 The classical economists analysis of market is based on assumption of

o Monophony

@ Perfect competition

a Monopolistic competition o Duopoly

While identifying a project an indMdual must consider his

0 Ability to invest
0 Expertise
0 Interest
0 Social wants Under perfect competition, firms are free to enter and exit in the market.

@ TRUE o FALSE

Principle ofl

Exclusion

I is associated with private goods

Non exclusion

Divisibility

Division

A forecast is a guess or anticipation or a prediction about any event which is likely to

o Happen in the future

o Happen in the present

o Happen anytime

o Happen in the near future

Market economy is also involved in

0 Overproduction
0 Underproduction
0 No production
0 Low production Assessment: Assignment for Managerial Economics

Registration Number: 200742300 Name: Neera Devi

Attempt: 1 Duration 00:31 :14


l Assignment Date

2010712009


37

[ No of Partially Correct Answers

No of Wrong Answers


48

l Total Marks Obtained

80 Out or i 00.

x

Time-period does nut affect demand forecasting.

o TRUE @ FALSE

Market demand curve is derived from indMDual demand curves

o Vertical summation @ Horizontal summation

o Horizontal subtraction

o Vertical subtraction

Demand in ecnnnmics also means demand per unit of

0 Goods
0 Afirm
® Time
0 Industry The stage of negative returns comes in when

@ T.P. decreases, M.P. negative, A.P. decreases

o T.P. increases, M.P. zero, A.P. decreases

o T.P. increases, M.P. zero, A.P. increases

o T.P. increases, M.P. increases, A.P. increases

Sunk costs Incremental costs

costs borne whether there is Ie I cost made on expansion offirm

Fixed cost is known as Variable cost can refer to

operating costs alone I I U shaped curve I I prime cost

I accounting cost I A rightward shift in the supply curve is because the supply has I

increased

decreased

constant

stopped

The concept of giffen goods was not lntmduced by Robert Giffen.

o TRUE @ FALSE

Latssez tatre

I we mean no government intervention

Ceteris paribus

'--- R_8Q_u_la_t8_d_8_c_on_o_m_y ~1 IL- o_rQ_a_nl_z'_ti_o_n --'

A monopolist is a price taker.

@ FALSE o TRUE

Market period is concerned to

o Related to few hours or few days

o Related to perishable goods

o The entire supply is to be disposed offon the same day

o Supply can be held back from this market

The rise in the cost of production of a commodity can be due to I

various reasons

some reasons only

Sunk cost

Fixed costs

There are many firms in a perfectly competitive market selling

@ homogenous products

o similar products

o heterogeneous products a differentiated products


[!] Single producer [!] Barriers to entry

[!] No close substitutes to the product o Perfectly elastic demand curve

An elolample of private good could be

@ Television

o Roads

o Bridges

o Door Datshan Network

Principle of exclusion is applicable to public goods.

o FALSE

o TRUE

Monopoly profit arises because of I

Monopolist

L- D_i_st_rib_u_ti_on ~1 1L_ c_o_m_p_et_iti_on ~

Business skills

One of the important profit standards is I

Plough back

Plough forward

L- P_o_li_tic_a_1 s_t_an_d_a_rd ~1 LI A_n_nu_'ty __ m_e_th_o_d ~

PDS has hecume a stable and permanent feature of India's strategy to

[i] Control prices

[i] Reduce Tluctuations in prices

[i] Achieve equitable distribution of essential consumer goods o Ensure regional balance

Transaction ground for buyers and sellers

Total Revenue

AR=MR

MR=MC

Equilibrium ofa firm I I Perfect competition I Total receipts from the sale ofa
given output

Oligopoly I I Monopoly I I Market An exception to law of supply is given by the

backward bending supply curve I I forward bending supply curve I LI __ h_or_iz_o_nt_al_S_U __ PP_IY_C_U_IV_e _ ___J

L_ __ ve_rt_ic_a_IS_U __ P_PIY __ C_U_~_e __ ~1 1L_ r_a_w_m_a_t8_r_ia_IS ~

The numerjcal value of relatively inelastic demand lies between

@ zero and one
0 one and two
0 one and 5
0 zero and 2 The classical economists analysis of market is based on assumption of

o Monophony

@ Perfect competition

o Monopolistic competition

o Duopoly

VVhile identif.Jljng a project an indMdual must consider his

0 Ability to invest
0 Expertise
0 Interest
0 Social wants Under perfect competition, firms are free to enter and exit in the market.

@ TRUE o FALSE

Principle ofl

Exclusion

1 is associated with private goods.

Non exclusion

Divisibility

Division

A forecast is a guess or anticipation or a prediction about any event which is likely to

o Happen in the future

o Happen in the present

o Happen anytime

o Happen in the near future

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