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Program Name:
Assessment Name:
Total Marks:

Managerial Economics
ME - Exam
80 mins

Online Examination:
Online examination is a Computer based examination.
Online examination comprises of Total 29 Questions - Out of 70 marks.
Duration of online examination will be of 1 Hour 20 minutes (80 minutes).

Section - I Instructions:
- It is compulsory and has total 3 Subjective Questions.
- Students are required to solve any 2 Subjective Type Questions. Each question is of 5 marks.
- Section I is out of 10 Marks.
Please refer following instructions regarding Subjective examination:
- While attempting subjective examination Text formatting facility will be disabled such as use of bullets,
making the text bold, underlining the text etc. Only normal character on the key board will be available.
- Special characters available on the keyboard will be allowed.
- Students can not attempt more than 2 questions out of given 3.
- A blank (space typed) or any entry in the space provided will be considered as question is answered.
- Hand written answers are not allowed. Subjective test can be answered by using key board.
- No brail support shall be provided, but writer assistance shall be allowed. The student has to intimate it to
SCDL well in advance by completing applicable formalities.
- Answers for both the questions should not exceed more than 110 words. The maximum word limit per
answer is 55 words (for Subjective part).

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1) What is Market?
As we know, market is a place where buyers and sellers meet each other to effect a business transaction.
We may find the markets located on a street, in a building where number of shops are established. Markets
could be local markets or international markets specialised for certain commodity, etc. This is traditional
view. However, according to the modern view: i) It is not necessary that the market for a commodity
should always be located on a particular street or in a building. ii) The buyers and sellers may be away
from each other and yet they may constitute a market over telephone or through internet. iii) When buyers
and sellers are in close contact with each other, the prices prevailing in different parts of a country would
tend to be equal.
2) State the factors that justify cost benefit analysis.
Cost benefit analysis is justified on the following grounds: Social costs and benefits: Even in the market
driven economy, the Govt. has to intervene, regulate and control the business activities. Intangible factors:
Sometimes factors such as prestige of the business firm, reputation, image etc. have to be taken into
consideration. Overall profitability: The rate of return to all investible funds rather than funds actually
invested would be a better guide. Certain uncertainty vs. Uncertain certainty: Investor would prefer an
uncertainty, which is estimable. Social Scale of Preferences: Business sector has to be careful about the
social fallout of their activities. National Industrial Policy: The policy lays down the set of economic
policies for the country. Pure Disposable value Unforeseen circumstances: Natural calamities demand
urgent steps to make good the losses. In such a scenario, a cost benefit analysis can be of great help.
3) Distinguish between fiscal policy and monetary policy.
Fiscal policy: _It refers to variations in taxation and public expenditure programmes of the Govt. _The
programmes are to achieve pre-determined objectives. _Taxation reduces private disposable income and
thereby private expenditure. Public _expenditure increases private income and thereby private
expenditure. _Tax revenue and public expenditure are two sides of Govt. budget and are known as fiscal
policy. _It is a powerful instrument of economic stabilisation. _It is prepared for every financial year.
Monetary policy _It refers to the programme of central bank of the country, i.e. RBI. _It entails bringing
about variations in the total supply of money and cost of money. _The policy aims at achieving economic
stability. _The measures used are quantitative methods such as open market operations, change in bank
rate, SLR/CRR and qualitative methods such as selective credit control and moral suasion. Half yearly
policies are further reviewed periodically

Section 1 is complete.
Please click on "Next" button to proceed.

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Section - II Instructions:
- It comprises of Objective Questions Only.
- Total 60 marks are allotted for objective type questions.
- The objective questions are of following type and carries marks as given under.
Multiple Choice Multiple Response
Multiple Choice Single Response
True or False
Select a Blank
Match the Column
Total Questions
Total Marks

: 4 Questions - 16 Marks (Each 4 marks)

: 9 Questions - 18 Marks (Each 2 marks)
: 5 Questions - 5 Marks (Each 1 mark)
: 5 Questions - 5 Marks (Each 1 mark)
: 4 Questions - 16 Marks (Each 4 marks)
: 27
: 60

1) Demand for a product is not affected by ; a

1] level of technology
2] price of related products
3] tastes and preferences
4] income of a person
2) All free gifts of nature are commonly called labour.
1] True
2] False
3) The central functions of an enterprise are not only:BLANK but pricing as well.
1] production
2] consumption
3] factor selection
4] invention
4) The information about a firm is give below:- Sales Rs.10000, Material cost Rs.3,000/-, Labour cost Rs.
2,000/- Administrative cost Rs. 1,000/-. The accounting profit of the firm is
1] Rs.5,000/2] Rs.4,000/3] Rs.7,000/4] Rs.8,000/5) The income which a businessman might expect from the second best alternative use of his resources is
called as
1] Opportunity Cost
2] Accounting cost

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3] Real cost
4] Nominal cost
6) The cost which enter the accounts book of the firm are referred as
1] Opportunity Cost
2] Accounting cost
3] Real cost
4] Nominal cost
7) Cost of Deposit of Bank of Maharashtra is 7%. Other cost is 3%. Profit margin expected is 1%. So, Bank
fixes its rate of interest on loans at 11%. This is an example of
1] Marginal Cost pricing policy
2] Cost Plus pricing policy
3] Going Rate pricing policy
4] Imitative pricing policy
8) The taxation and public expenditure policies are called as
1] Expenditure Policy
2] Revenue Policy
3] Budgetary Policy
4] Monetary Policy
9) Market mechanism ensures full employment of labour force.
1] True
2] False
10) Managerial economics looks at any problems from :BLANK perspective
1] micro and macro
2] macro
3] developed nations
4] underdeveloped nations
11) Factors of production are so called because they are used in the process of :BLANK .
1] production
2] consumption
3] delivery
4] distribution
12) Match the Following
1] Gross Profit
2] Net Profit
3] Economic Profit
4] Accounting Profit
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1] Total revenue less Manufacturing cost

2] Total revenue less Total explicit cost
3] Total revenue less (Explicit cost + implicit cost)
4] Profit for Accounting purposes


5] Total revenue less Total implicit cost

6] Total revenue less Total Opportunity cost
13) The income elasticity of demand for different commodities is different because
1] certain commodities are income elastic
2] certain commodities are income inelastic
3] certain commodities are essential
4] certain commodities are substitutes
14) Match the Following
1] e = 0
2] e - <1
3] e = 1
4] e = >1

1] Zero price elasticity of demand

2] Less than unitary elasticity of demand
3] Unitary price elasticity of demand
4] More than unitary elasticity of demand
5] Negative price elasticity of demand
6] Infinity price elasticity of demand

15) Complementary goods are demanded jointly .

1] True
2] False
16) Match the Following
1] Mr.Vithal saw the film Gajini
2] One crore people saw the film Gajini
3] 100 crore people saw various Hindi films
4] 10,000 people purchased rain coats during June 2009 at Pune

1] Individual Demand
2] Market Demand
3] Industrial Demand
4] Seasonal Demand
5] Cumulative demand
6] compounded demand

17) Match the Following

1] Furnace
2] Washing machine
3] Fruits
4] Insurance

1] Capital goods
2] Durable goods
3] Perishable goods
4] Service product
5] Slow moving goods
6] Visible goods

18) The law of increasing returns to scale is depicted by the marginal output curve which is
1] sloping upwards
2] horizontal
3] vertical
4] sloping downwards
19) The production function studies
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1] Input and out put relation
2] Technology used in production
3] Factors of production and final production
4] Demand forecasting
20) At the equilibrium point, the marginal cost curve cuts the marginal revenue curve from the top
1] True
2] False
21) The pricing policy must conform to the :BLANK of the firm
1] resources
2] mission
3] budget
4] objective
22) Cost-benefit analysis refers to analysis :BLANK of a projects and find out its worth.
1] benefits
2] investments
3] costs
4] returns
23) According to Keynes the motives for holding cash for liquidity preference are
1] The speculative motive
2] The reserve motive
3] The transactions motive
4] The precautionary motive
24) Inflation
1] is a phenomenon of rising prices
2] is a general and dynamic phenomenon
3] indicates an excess of supply
4] indicates an excess of demand
25) Except for few industries where security concerns are predominant industrial licensing for all other
industries has been
1] abolished
2] made mandatory
3] optional
4] conditional
26) In a market economy an individual is the best judge of personal interest.
1] True
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2] False
27) In the long run, hoarding
1] will not take place
2] may take place if the price is in equilibrium state
3] may take place if the price is more
4] may take place if the price is less

Section 2 is complete.
Please click on "Next" button to proceed.

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