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Quiz-I, Engineering Economics (UHU081) Time: 10 Mins. Max Marks: 10 Date: 24th Feb,2014 Roll no.. Name .. Branch.Group..

1.

What is the approximate forecast for May using a four-month moving average? 6. Nov. 39 a) b) c) d) e) Dec 36 Jan. 40 Feb 42 March 48 April 46

e)

None of the above.

38 42 43 44ANSWER 47 7.

Forecasts used for new product planning, capital expenditures, facility location or expansion, and R&D typically utilize a a) short-range time horizon b) medium-range time horizon c) long-range time horizonANSWER d) naive method, because there is no data history e) all of the above Two goods are .if an increase in the price of one leads to an increase in the quantity demanded of the other. a) Complementary b) Substitute ANSWER c) Independent d) Support

2.

3.

4.

5.

For a given product demand, the time-series trend equation is 25.3 + 2.1 X. What is your forecast of demand for period 7? a) 23.2 b) 25.3 c) 27.4 d) 40ANSWER The price elasticity of demand for a product is infinity. If the firm increases price of the product by 10%, total revenue of the firm will a) Not change b) Increase to infinity c) Fall to zeroANSWER d) Decrease by more than 10% e) Decrease by less than 10%. Based on the following information answer the questions 4 to 5. Time Watch Company assembles wrist watches and sells in western India. Demand function faced by the company is estimated to be QT = 40000 2PT 2I + 4PC QT = number of watches demanded from time watch company PT = price of watches sold by time watch co. I = per capita income in western India. PC = price changed by competitors. Currently PT, I and PC are Rs. 350, Rs.10,000 and Rs. 400 respectively. The price elasticity of demand is a) 0.063 b) 0.572 c) 0.711 d) 0.033ANSWER e) 0.052. The income elasticity of demand is a) (2.22) b) (0.96) ANSWER c) (0.05) d) 0.85

8.

Which of the following has the lowest elasticity of supply? a) Luxury items. b) Necessities. c) Perishable goods. ANSWER d) Items that have the least budgetary allocation. e) None of the above. You have planned to spend Rs.100 for a month on browsing the Internet. Your demand forNet browsing can be said to be a) Perfectly elastic b) Perfectly inelastic c) Relatively elastic d) Relatively inelastic e) Unit-elastic. ANSWER

9.

10. At a local supermarket, the price of Simla apples varies every week. Mr. Mishra, who is aregular buyer of apples, spends exactly Rs.50 on apples every week, irrespective of the price. For Mishra, the price elasticity of demand for apples is a) Perfectly elastic b) Perfectly inelastic c) Unit elasticANSWER d) Relatively elastic e) Relatively inelastic