Managerial Economics b.

Total quantity of a product demanded during a

Unit1 - 1 Mark Quiz Questions given period of time
1.Managerial economics as a new branch of c. Various quantities that are demanded by
Economics consumers
2.Managerial Economics as a specialized branch of d. Total quantity of a product demanded at a
Economics particular price in the marketduring a
a. Provide ready-made solutions to business given period of time
problems 4.Demand for a product refers to
b. Provide logic and methodology to find solutions to a. Various amounts which are purchased by
business problems consumeres at a particular price during
c. provide alternative answers to specific business a given period of time
problems. b. Total quantity of products demanded during a
d. Provide theoretical background to analyze given period of time
business problems c. Various amounts that are desired by consumers
3.Managerial Economics is d. Various amounts that are demanded by
a. A theory oriented branch of economics consumers
b. A new branch of economics 5.Demand for a proeuct basically depends on
c. A part of macro economics a. Utility of product
d. A part of tradtional economics b. Desires of consumers
4.Managerial economics is c. Price of the product
a. A positive science d. Consumers requirements.
b. Mainly a positive and a normative science 6.If we observe the price of a good or service rising
c. Mainly a normative and a positive science then this could have been caused by
d. A normative science a. An increase in demand
a. Uses new techniques to identify business and b. A temporary surplus
management problems c. A small increase in demand followed by a huge
b. Highlights on analyzing business problems increase in supply
c. Applies economic theories and concepts to solve d. An increase in supply
business and management 7.In case of decrease in demand,the demand curve
problems a. Shifts forward
d. Acts totally independent of other subjects b. shifts backward
5.Managerial econonomics deals with the problem c. Slopes negatively
of d. Will be a vertical straight line
a. Global economy 8.In case of expansion and contraction in demand,
b. An industry the consumer would be moving either
c. An economy in the upward or downward direction
d. An individual firm a. On a higher demand curve
Unit2 - 1 Mark Quiz Questions b. On two demand curves
1.A tabular representation of diiferent quantities of a c. On a lower demand curve
commodity demanded at different d. Along the same demand curve
prices are known as 9.In case of increase in demand the demand curve
a. Demand series a. Will have upward slope
b. Demand schedule b. Will be horizontal
c. Demand pattern c. Shifts forward
d. Statistical demand table d. Shifts backwards
2.An increase in demand 10.The demand curve
a. Will cause demand curve to shift to the left a. Has a negative slope
b. Means consumers will buy more at a low price b. Has a positive slope
c. Will cause quantity demanded to fall c. is a horizontal line
d. Could be caused by an increase in the incomes of d. Is a vertical straight line
cunsumers 11.The Law of Demand assuming other things to
3.Demand for a product refers to remain constant, establishes the
a. Various amounts desired by consumers relationship between
a. Income of the consumer and the quantity of a
good demanded by him
b. Price of a good and the quantity demanded
c. Price of a good and the demand for its substitute
d. Quantity demanded of a good and the relative
prices of its complimentary goods.
12.The relationship between price and demand is
a. Inverse
b. positive
c. Direct
d. Proportionate
13.Under exceptional cases, the demand curve
slopes
a. Backward
b. Forward
c. Downwards
d. Upwards
14.Which of the assumptions on which the demand
is based are
a. Technology
b. Prices of other related goods and tastes and
preferences
c. Production Costs
d. Prices of Inputs
15.Which of the following is not a factor which will
shift the demand curve for some
product
a. An increase in the price of a substitute good
b. An expectation of a future price decline
c. An increase in consumer income
d. An increase in the price of the given product
Unit3 - 1 Mark Quiz Questions
1.A firm to formulate its sales policy and sales
strategy can make use of
a. Sales forecast made by the other firms.
b. Sales forecast made by the statistical
organizations.
c. Sales forecast made by the industry.
d. Sales forecast made by the govt.
2.A good method of demand forecasting should be
a. Coercive
b. Flexible
c. Rigid
d. complex
3.Demand forecasting is generally associated with
a. Forecasting sales and manipulating demand.
b. The estimation of the position of the firm in the
market.
c. The estimation of the market share.
d. The estimation of competition in the market.
4.Demand forecasting is made - for the
a. For the substitutes only
b. For the existing products only.
c. New products only.
d. For both the existing products & for the new
products.
5.Demand forecasting is made in terms of
a. The quantity that can be produced.
b. Approximate amount
c. Specific quantities.
d. Actual amount.
6.Demand forecasting refers to an estimation of
a. Trends in the market.
b. Future demand for the product.
c. Most likely future demand for a product.
d. Precise demand for a product at a future date.
7.Generally companies plan their business in
anticipation of
a. Making huge profits.
b. future growth in the market.
c. Eliminating competition.
d. future demand.
8.Internal factors like money spent on advertising,
pricing policy, product improvement,
sales efforts etc., help in
a. Forecasting sales
b. Fixing price of the product
c. Determining the size of the market
d. Manipulating demand
9.Some of the external factors which influence sales
forecasts of a firm are
a. Pricing policy.
b. Size of the market, competitors attitude,
movement in prices. etc.,
c. Money spent on advertisement.
d. Product improvement and sales efforts.
10.The heart of the survey method is
a. Consumer panel.
b. Direct interview
c. Opinion of the sales representatives
d. Questionnaire
Unit4 - 1 Mark Quiz Questions
1.A tabular representation of different quantities of
a commodity supplied at varying
prices is called
a. Supply schedule
b. Supply series.
c. Supply table.
d. Supply pattern..
2.For perishable commodities like fish and fruits
a. Supply is more than production.
b. Supply and stock are different.
c. Supply and stock are the same.
d. Supply is less than production.
3.Supply of a product basically depends on
a. The availability of other goods in the market.
b. Cost of production and the management decision.
c. Consumers desires.
d. Consumers requirements.
4.The assumptions on which the law of supply is
based are
a. The prices of other commodities, incomes of the
people etc.,
b. Tastes and preferences of the people.
c. Number of firms, availability of inputs, cost of
production, techniques of
production etc.,
d. Availability of substitutes, development of new
products.
5.The supply curve
a. Is a vertical straight line.
b. Is negatively sloping.
c. Has a positive slope.
d. Is a horizontal straight line.
6.The supply of a product refers to the
a. Various amounts available with the firm.
b. Various amounts which are produced by a firm.
c. Various amounts which are offered for a sale at a
particular price during a given
period of time.
d. Total quantity of the product produced during a
given period of time.
7.The total volume of a commodity which can be
brought into the market for sale at a
short notice is called
a. Supply.
b. Available supply.
c. Volume of production.
d. Potential supply.
8.The two concepts which link the market behaviour
of consumers, producers & sellers
with that of price are
a. Desire & ability.
b. The technique & the cost.
c. Demand & supply.
d. Utility & usefulness.
Unit5 - 1 Mark Quiz Questions
1.A stage of decreasing returns imply
a. both a and b
b. AP is negative
c. MP is decreasing
d. MP is negative
2.Diminishing marginal return implies
a. Decreasing average fixed costs
b. Decreasing average variable costs
c. Increasing marginal costs
d. Decreasing marginal costs
3.Diminishing return operate in the 2nd stage of the
law of variable preportions when
greater quantity of variable input is employed except
in one of the case. Identify the
correct answer
a. Greater scope for economies of scale
b. complete utilisation of indivisible factor
c. There is a limit for intensive and effective
utilisation of fixed factor inputs
d. Intensive and effective utilisation of fixed factor
inputs
4.Fixed inputs are those factors
a. The Qty of which remains neutral with the level of
output
b. The Qty of which varies with the level of output
c. The Qty of which does not remain constant with
the level of output
d. The Qty of which remains constant irrespective of
the level of output
5.Identify the correct answer, short run is a period of
time where in
a. Fixed as well as variable factors remain constant
b. Variable factors as well as fixed factors vary
c. Variable factors can be varied while fixed factors
remain constant
d. Fixed factors can be varied while variable factors
remain constant
6.Identify the incorrect answer, long run is a period
of time where in
a. Adequate time is available to make all kinds of
changes
b. The distinction between fixed and variable inputs
remains the same
c. Adequate time is availablity for entry or exit of
firms
d. Plant capacity can be changed
7.If the marginal product of labor is below the AP of
labor it must be true that
a. The AP of labor is negative
b. The AP of labor is falling
c. The MP of labor is negative
d. The MP of lobor is zero
8.In case of long run production
a. The Qty of both fixed and variable inputs are kept
constant
b. The Qty of both fixed and variable inputs are
changed in the same proportions
c. The Qty of both fixed and variable inputs are
changed
d. The Qty of both fixed and variable inputs are
changed in different proportions
9.Incase of short run production function Qty of
fixed input remains constant and
a. The Qty of both fixed as well as variable inputs
remains constant
b. Qty of one or two variable inputs are kept
constant as Qty of fixed inputs change
c. The Qty of both variable and fixed input change
d. Qty of either one or two variable inputs change
10.Increasing return operate in the 1st phase of the
law of variable proportions when
greater quantity of variable input is employed except
in one of the case Identify the
correct answer.
a. Limit for intensive and effective utilisation of fixed
factor inputs
b. Perfect substitution of factor inputs
c. Complete utilisation of indivisible factors.
d. Limit for division of labor
11.Increasing returns imply
a. Increasing cost per unit of output
b. Diminishing cost per unit of output
c. Optimum use of capital and labor
d. Constant average cost
12.Marginal product is maximum at a point of
a. Equilibrium point
b. Focul point
c. Inflection point
d. Turning point
13.Negative return operate in the 3rd phase of the
law of variable proportion when
greater quantity of variable input is employed except
due to one of the following reasons
Identify the incorrect answer.
a. The proportion of variable factors is in excess of
fixed factors
b. The proportion of both are scare
c. The proportion of both are in excess
d. The proportion of fixed factors is in excess of
variable factors
14.Out of the 4 which one of the following
production function is the best one ?When an
old production function is replaced by a new one
a. The Qty of output increase while the Qty of input
decrease
b. The Quantity of both inputs and output increase
with same proportion.
c. The Qty of inputs reduced while the Qty of output
remains the same
d. The Qty of output increase while the Qty of input
remain the same
15.Out of the four which of the following statement
is incorrect ? When a producer
increases the Qty of variable input while keeping
fixed factors constant
a. Marginal product increases in the beginning
b. Marginal product become constant in the middle
c. Marginal proiduct diminishes at the end
d. Marginal product reaches the highest point
16.Out of the four which one of the following is not a
practical use of production function
a. It is used to work out least cost input combination
for a given output or maximum
output-input combination for a given cost.
b. It is used to workout an optimum combination of
inputs for getting a certain level
of output
c. It is used to take long run decisions regarding
when output is to be increased,
decreased and kept constant
d. It is used to work out least output in put
combination for a given cost or
maximum cost input combination for for a given
output
17.Out of the four which one of the following
statement is incorrect to describe the law of
variable proportions according to Benham
a. First the total product and then the average
product of that factor will diminish
b. As the proportion of one factor in a combination
of factors is increased, after a
point first the marginal, then the average product of
that factor will dimimish
c. As the proportion of one factor in a combination
of factors is increased, after a
point first the average and then the marginal
product of that factor will diminish
d. The first marginal and then the total product of
that factor will diminish
18.Out of the four, which of the following statement
is incorrect
a. Total output goes on increasing as long as
marginal product is positive
b. Total output is the highest when marginal product
is zero
c. Total output is the highest when marginal product
is positive
d. Total output diminishes when marginal product
becomes negative
19.Production function explains
a. The relationship between Qty of inputs employed
and the corresponding total
production cost
b. The relationship between market price charged
and quantity supplied
c. The relationship between qty of inputs used and
the corresponding output
obtained
d. The relationship between the firms total revenue
and total production cost
20.Production function with one variable input is not
called as
a. The law of returns to scale
b. Law of variable proportions
c. The law of non-proportional output
d. Law of diminishing returns
21.The Average product of labor is maximum when
MP of labor
a. none of the above
b. Equals zero
c. Equals the AP of labor
d. Is maximised
22.The identify the wrong answer. The term
production in economics implies
a. Conversion of inputs into outputs
b. creation of new or additional utilities
c. activity directed for satisfaction of want
d. Creation of utilities
23.The marginal product of a variable input is best
describe as
a. The addition output resulting from a one unit
increase in both the variable and
fixed inputs
b. Total product divided by the number of units of
variable input
c. The ratio of the amount of the variable input that
is being used to the amount of
the fixed input that is being used
d. The addition output resulting from a one unit
increase in the variable input
24.The production function is a relationship between
a given combination of input and
a. All level of output that can be generated by those
inputs
b. Another combination that yield the same output
c. The increase in output generated by one unit
increase in one output
d. The higher resulting output
25.Total output will be the maximum when
a. Marginal output is zero
b. Marginal output is highest
c. Average output is highest
d. Average output is lowest
26.Variables inputs are those factors
a. The Qty of which remains neutral with variations
in the level of output
b. The Qty of which remains constant with variation
in the level of output
c. The Qty of which does not vary with the level of
output
d. The Qty of which varies with variations in the level
of output
27.Which of the following is not an economic activity
a. A manager managing his organisation
b. A teacher teaching in a college
c. A chartered accountant doing his own activity
d. A son looking after his ailing mother
28.Which of the following is not considered as
production in economics
a. A student playing for his college foot ball team
b. A farmer tilling his land
c. A worker working in HAL
d. A BSF jawan guarding boarder with pakistan
29.Which of the following statements is true
a. Man can create matter
b. When a man creater a table, he creates matter
c. The service of a doctore are considered
production
d. The services of a housewife are considered
production
30.Which one of the assumption of the law of
variable proportion is incorrect
a. Production technology remains constant
b. The law operates the long run
c. Only one variable input is to varied
d. Different units of a variable factor input are
homogeneous
Unit6 - 1 Mark Quiz Questions
1.A firm managed by an individual has certain
advantages except one Identify the
incorrect answer
a. He can take quick, immediate and on the spot
decisions
b. There is lot of scope for discussions
c. He can enjoy all the profit of the business
d. He has direct centrol over the enterprise
2.Identify incorrect answer, A business unit is
a. An economic unit
b. A producing unit
c. A Profit-Maximising unit
d. A Welfare-Maximising unit
3.Identify the incorrect Answer Objectives of a
business firm area.
Supplementary to each other
b. Mutually inter connected to each other and a few
others are opposing in nature
c. Uni-dimensional in nature
d. Multi-dimensional in nature
4.Identify the one which is incorrect, A classical firm
basically engages ifself in
a. Profit optimisation
b. Profit maximisation
c. Wealth creation
d. Surplus creation
5.Out of the following four nature of objectives,
identity the incorrect one:
a. They are the end-point towards a rational activity 2.AR curve of the firm is the same thing as that of
b. They indicate the specific methods of mobilising the demand curve of the consumer
financial resources because
c. They guide and govern actions and behaviour of a. The price paid by the buyer is the revenue of the
business men seller
d. They indicate the purpose and reasons for the b. The revenue is equal to cost.
existence of a firm c. The AR curve of the firm determine the price of
6.Under MR and MC approach profit maximisation is the product..
possible when d. The price paid by the buyer is the cost of the
a. MC < MR and MC curve cuts MR curve from above seller.
b. MR 3.AR is the revenue per unit of the commodity sold.
c. MC>MR and MC curve cuts MR curve from below It can be obtained by
d. MR a. /_\ TR / /_\ / Q
e. MC and MC curve cuts MRC from below b. TR / P.
f. MC and MC curve cuts MRC from above c. TR / TC.
7.Under TR and TC approach, Profit -Maximisation is d. TR. / Q
possible when 4.Average revenue curve of the firm is the same as
a. TC the demand curve of the consumer
b. TC> TR except in the context of
c. TR<> a. Perfect competition.
d. TR>TC b. Discriminatory monopoly.
e. TR c. Monopoly.
8.Which of the following is incorrect d. Monopolistic competition.
a. A firm produce various goods and services to 5.MR is the additional revenue earned by selling an
satisty wants of people additional unit of a commodity which
b. A firm transforms inputs into outputs means
c. A firm is based on commercial principle a. Revenue realized from selling one more unit of a
d. A firms is based on welfare principle product
9.Which one of the following characteristics is b. Revenue realized by raising the price
incorrect of a firm run and managed by a c. Revenue over and above the total cost
owner entrepreneur ? d. Revenue realized from selling more products
a. He can enter into contract with any group of 6.The sales receipts of the output of a firm depends
people who supply inputs on the
b. He has the legal permission to run the enterprise a. Market price.
c. He can maximise his profits in any manner b. Reputation of the firm.
d. He can change the nature of management c. Hold it has on the market.
according to his convercience d. Size of the firm.
10.Which one of the following statement is incorrect 7.TR is the highest when
? a. MR is increasing.
a. Profit maximisation immoral b. MR is zero.
b. Earlier profit maximisation was the sole objective c. MR is negative.
of a firm d. MR is positive.
c. Profit-maximisation indicates the economic 8.Under imperfect competition both MR and AR are
position and status of firm downward sloping and MR curve
d. Now it has become one among many objectives lies below the AR curve which means
Unit7 - 1 Mark Quiz Questions a. A firm can sell more at the same price
1.A kink at some point on the demand curve exhibit b. The sales have no relation with the price.,
two different characteristicsa. c. The firm can sell more only by lowering the price.
Increase and decrease. d. The firm can sell more at a higher price.
b. Rigid and flexible. 9.Under perfect competition
c. Expansion and contraction. a. AR
d. Elastic and inelastic. b. MR
c. AR>MR
d. MR>AR b. Duopoly also.
<> c. Monopoly also.
e. MR<AR d. Pure competition also.
<> 8.Pure competition is a
f. P. a. Common phenomenon.
g. P b. Rare phenomenon.
10.What is MR? c. Very popular.
a. TR/AC. d. Unrealistic.
b. MR 9.The price at which demand and supply are equal is
c. TRn-TRn-1. known as
d. MR a. Equilibrium price.
e. MR b. Actual price.
f. MR c. Normal price.
g. TR/TQ. d. Market price.
h. TR/TC. 10.The price of the product should not exceed the
Unit8 - 1 Mark Quiz Questions value of its benefit to
1.An individual producer cannot influence the a. The buyer.
market price under b. The seller.
a. Oligopoly. c. The organization.
b. Duopoly. d. The society.
c. Pure competition. 11.There is no scope for the firms to join together
d. Monopolistic competition. and form cartels or some other form of
2.Imperfect market exhibits the characteristics of organization to restrict competition under
both a. Imperfect competition.
a. Monopoly and duopsony. b. Monopolistic competition.
b. Monopoly and competition. c. Oligopoly
c. Monopoly and oligopoly. d. Perfect competition.
d. Duopoly and monopolistic competition. 12.Under perfect competition buyers and sellers
3.In the long run the firms can earn only normal have
profit under a. Perfect knowledge of the market.
a. Monopolistic competition. b. Imperfect knowledge of the market.
b. Perfect competition. c. Partial knowledge of the market.
c. Oligopsony. d. Considerable knowledge of the market.
d. Monopsony. 13.Under perfect competition the upper limit to the
4.Incase of food grains like rice, wheat, jowar, etc., price of a product is determined by
we find a. The government.
a. Impure competition. b. The seller.
b. Oligopoly. c. The demand
c. Pure competition. d. The cost
d. Imperfect competition. 14.When there are a large number of buyers and
5.Perfect competition and Monopoly are the two sellers, commodity dealt with is
a. Popular market situations. homogeneous, free entry and exit of firms and
b. Actual market situations. absence of any kind of monopoly element
c. Extreme market situations. , market is said to be
d. Major market situations. a. Imperfect.
6.Perfect competition is b. Pure
a. An imaginary market. c. Monopolistic.
b. A desired market situation. d. Perfect.
c. The actual market condition that exists. 15.Who compared supply and demand to the two
d. An ideal market situation. blades of a scissors
7.Perfect competition is a comprehensive term a. Ricardo.
which includes b. Marshall.
a. Monopolistic competition also. c. Keynes.
d. Samuel son.
Unit9 - 1 Mark Quiz Questions
1.Consumers surplus is the difference beween
a. Price gap beween two products
b. Actual satisfaction and unexpected satisfaction
c. Potential price and actual price
d. Optimum price and actual price
2.Consumers surplus means
a. Difference between what a consumer is actually
paying for a product and what he
is planning to pay for a product
b. Difference between market price and actual price
c. Difference between what a consumer is willing to
pay for a product and what he
actually pay for it.
d. Difference between realised satisfaction and
anticipated satisfaction.
3.Consumers' surplus is
a. Surplus amount of money paid over and above the
total utility of a product
b. Surplus satisfaction enjoyed by a consumer over
and above the price paid for a
product
c. Surplus price paid by a consumer over and above
the satisfaction derived from a
product.
d. Surplus amount of satisfaction derived from the
consumption of a product the
price he has paid for it.
4.Consumers` surplus is a
a. Relative concept
b. Quantitative concept
c. Qualitatitve concept
d. Objective concept
5.Consumers` surplus is derived from
a. The law of diminising marginal returns
b. The law of diminishing marginal productivity
c. The law of diminishing marginal substitution.
d. The law of diminishing marginal utility
6.Consumers` surplus is highest in case of
a. Comforts
b. Necessaries of life
c. Luxuries
d. Conventional necessaries
7.Consumers` surplus is the area
a. Below market price and a bove demand curve
b. Under demand curve and above market price
c. Above the market price line and above the
demand curve.
d. Below demand curve and below the market price
line
Unit10 - 1 Mark Quiz Questions
1.A stock variable is a quantity measured at
a. A point of time
b. At different periods of time
c. At different points of time
d. A period of time
2.During a given period of time a variable is a
a. Constant quantity
b. Quantity which takes different values
c. Changing quanity
d. None of the above
3.Endogenous variables are those
a. The value of a variable is not influenced by either
internal or external factors.
b. The value of a variable is determined with in the
system or internal factors
c. The value of a variable is determined by both
internal and external factors
d. The value of a variable is determined by external
factors
4.Exogenous vriables are those
a. The value of a variable is influenced by internal
factors
b. The value of a variable is not influenced by either
internal or external factors.
c. The value of a variable is influenced by both
internal and external factors
d. The value of a variable is influenced by external
factors
5.Identify the wrong answer. Macro economics is
also described as
a. Partial equilibrium analysis Income method
b. Lumping method
c. Aggregative economics
6.Identify the wrong answer. The scope of macro
economics includes the study of
a. The theory of general price level
b. The theory of income and employment
c. The theory of distribution
d. The theory of ecnomic development, growth and
planning.
7.Interface of macro economics with business and
industry does not deals with
a. Marketing policy of a firm.
b. Size of the market
c. Market strucure
d. Structure of the economy
8.Macro economics deals with the study of
a. Aggregative behaviour of entire economy
b. The behaviour of individual economic units
c. Entire economy
d. Economic problems of individuals
9.Out of the four, which is not a macro variable?
a. General price level
b. Stagflation
c. Deflation income is called
d. Price of Ice-cream a. Proportion of consumption to the proportion of
10.Out of the four, which is not a micro variable? income.
a. Demand b. The average propensity to consume.
b. supply c. The marginal propensity to consume
c. Cost d. Aggregate consumption expenditure.
d. Inflation 9.The size of income and the consumers propensity
Unit11 - 1 Mark Quiz Questions to consume determine
1.Functional relationship between changes in the a. The investment expenditure.
level of consumption as a result of b. The consumption expenditure.
changes in the level of income is explained by c. The level of output.
a. Price function. d. The level of saving.
b. Income function. 10.When income increases APC as well as MPC
c. Effective demand. a. Increases proportionately.
d. Consumption function. b. Increase disproportionately.
2.Increase in consumption expenditure is less than c. Increases.
proportionate to the d. Declines
a. Increase in employment. Managerial Economics
b. Increase in income. Unit1 - 2 Mark Quiz Questions
c. Increase in investment expenditure. 1.Decision-making implies
d. Increase in output. a. Giving judgement on a particular isuue
3.MPC of the poor is ----------- than that of the rich b. Taking a final decision on a particular issue
a. Less. c. Selecting the best out of several alternative course
b. Lesser. of actions
c. The same. d. Selecting alternative solutions.
2.Forward Planning implies
d. Greater.
a. A plan to execute current programs
4.Propensity to consume is Keynes greatest
b. A Plan prepared in advace for future
contribution to the economists kit of tools in c. A plan prepared in the background of certainties
our generation according to d. A Plan prepared for past and present
a. Prof. Timbergen. 3.Managerial Economics deals with
b. Prof. Chamberlin. a. Provide alternative solutions to the problems
c. Prof. Samuelson. b. Providing solutions to various business and
d. Prof. Hansen. management problems
5.Ratio of aggregate consumption expenditure to c. Providing tools and techniques to find answers for
aggregate income is called business and management
a. Rate of consumption. problems
b. Level of consumption. d. Analyzing various business and managerial
c. Average propensity to consume. problems of a firm.
d. Marginal propensity to consume. 4.Managerial Economics helps
6.The level of national output, income and a. To optimise abundant resources to maximise
employment directly depends on profits
a. The level of consumption. b. To find answers only for present problems in the
background of past events
b. The level of saving.
c. To analyse present problems in the background of
c. The level of investment.
past
d. Effective demand.
d. To find solutions for present and future problems
7.The marginal efficiency of capital and the rate of on the basis of past and present
interest determine environment
a. The investment expenditure. Unit2 - 2 Mark Quiz Questions
b. The level of income. 1.A product can be considered as inferior in
c. The level of employment. economics if increase in disposable income
d. The level of output. of the consumer causes
8.The ratio of change in aggregate consumption to a. Increase in demand
the change in the level of aggregate b. No change in demand
c. Less than proportionate change in demand.
d. Decrease in demand
2.Demand Schedule of a firm shows quantities of a
commodity
a. Purchased at varying prices at different periods of
time.
b. That can be purchased at varying prices
c. Purchased at varying prices at a given period of
time
d. Purchased at a price
3.In case of prestige goods, a fall in price lead to
a. A very high rise in demand
b. Decrease in demand
c. A small rise in demand
d. Increase in demand
4.In the long run, consumption habits of people
become
a. Elastic
b. Inelastic
c. Perfectly elastic.
d. Relatively elastic
5.Market Demand Schedule shows the
a. Aggregate behaviour of the market
b. Sum of all individual demand schedules
c. Total price and demand
d. Total demand of all consumers
6.Over the years, the demand for textiles in India has
grown inspite of rising pricies. It is
an example for
a. demand function
b. General tendency in rise in price
c. Exceptions to law of demand
d. Law of demand
7.The combined effect of change in price on demand
for a product is.
a. Substitution effect plus price effect
b. Substitution effect plus income effect
c. Substitution effect minus income effect
d. Substitution effect plus demonstration effect.
8.The quantity of a commodity that an individual is
willing to purchase over a specified
period of time is not a function of
a. His disposable income
b. Price of the commodity
c. price of factors of production.
d. Price of competitive goods
9.Two goods X and Y are considered as
complementary to each other if
a. Fall in the price of one lead to fall in the demand of
the other
b. Increase in price of one leads to increase in the
demand of the other one
c. Increase in price of one leads to decrease in
demand of other and vice-versa
d. Increase in price of one leads to increase in the
demand of other and vice-versa.
10.When demonstration effect operate, consuners
would buy more
a. Even at a lower price
b. At the same price
c. Even at higher price
d. At different prices.
11.When the buyer is badly in need of a product, in
that case he would buy more
a. At higher prices
b. At different prices
c. At lower prices
d. At the same price
12.When there is an imporvement in quality of a
product, there will be change in
consumption habits, in that case the demand curve of
consumers would
a. Shift forward
b. Becomes steep
c. Becomes flat
d. Shift backwards
13.When two goods are complementary, a rise in the
price of one comodity will induce
a. An upward shift in demand for the other
commodity
b. A rise in the price of other commodity
c. No shift in the demand for the other commodity
d. A downward shift in the demand for the other
commodity.
14.When utility of a product increases and its
usefulness rises, in that case, there will be
a. Becomes horizontal
b. Backward shift in demaned curve
c. Forward shift in demand curve
d. Becomes vertical straight line.
15.X and Y are two products which are considered as
close substitutes of each other if
a. Increase in the price of one leads to increase in the
demand for the other and viceversa.
b. Increase in the price of one will have no impact on
the demand for the other
c. Increase in the price of one leads to decrease in the
demand of another and viceversa.
d. Fall in the price of one lead to fall in the demand
of the other.
Unit3 - 2 Mark Quiz Questions
1.A firm can make use of the sales forecasts made by
the industry.
a. As a powerful tool for formulating its price policy.
b. As a powerful tool for formulating its inventory
policy.
c. As a powerful tool for formulating its sales policy
& sales strategy.
d. As a powerful tool for formulating its profit policy.
2.Demand forecasting helps in determining the level
of output at various periods and
avoiding.
a. Risks in production. b. 2nd
b. Unnecessary competition. c. 1st
c. Under or over production. d. 3rd
d. Cost escalation. 2.A stage of decreasing return implies
3.Demand forecasting is undertaken at. a. MP is negative
a. Firm level only. b. MP is decreasing
b. Firm level, industry level and macro level. c. AP is negative
c. Macro level only. d. Both a and b
d. Industry level only. 3.At the point of inflexion, the marginal product is
4.Demand forecasting reduces production a. minimum
uncertainties and helps in. b. Maximum
a. Achieving the set goals. c. Decreasing
b. Reducing the cost of production. d. Increasing
c. Promoting the sales. 4.Diminishing returns occur
d. Stabilizing the activities of the firm. a. When the qty of the fixed input is increased and
5.Demand forecasts of particular products become return to the variable input falls
the basis for. b. when units of a variable input are added to a fixed
a. The evaluation of the progress of the firm. input and marginal product
b. Demand forecasting of other related industries. falls
c. The formulation of the tax policy. c. when the size of the plant is increased in the long
d. Demand forecasting of the entire industry. run
Unit4 - 2 Mark Quiz Questions d. when units of a variable input are added to a fixed
1.A firm would like to supply goods at a price which input and total product falls.
is 5.If a production function is homogenous of degree
a. Less than the cost of production one it implies that
b. More than the cost of production a. There is constant return to scale
c. Equal to cost of production. b. None of these
d. Considered as a reserve price c. There is decreasing return to scale
2.Market supply schedule shows the d. There is Increasing return to scale
a. Total stock & total supply. 6.In the long run
b. Aggregate behaviour of the market. a. All factors become inelastic
c. Total amount produced by the industry. b. All factors become fixed
d. Sum of all individual supply schedules. c. All factors become redundant
3.Supply schedule of a firm shows quantities of a d. All factors become variable
commodity 6.In the production of wheat all of the following are
a. Offered for sale at varying prices. variable factors that are used by the
b. That can be delivered at varying prices. farmer except
c. Produced at varying prices. a. The tractor used by the farmer in planting and
d. Planned at varying prices. cultivating not only wheat but also
4.The management will have to decide upon the rice
quantity to be supplied and the quantity b. The number of hours that the farmer spends in
to be held back based upon cultivating the wheat fields
a. Position of the firm. c. The field that has been cleared of trees and in
b. Needs of the consumer. which the crop is planted
c. Price. d. The seed and fertilizer used when the crop is
d. Policy of the firm. planted
5.The market supply schedule helps a firm to 7.Increasing return inplies
formulate its a. Maximum cost
a. Production policy. b. Decreasing cost
b. Management policy. c. Increasing cost
c. Sales policy. 1 d. Constant cost
d. Investment policy. 8.Iso-quant curve cannot be a straight line as it would
Unit5 - 2 Mark Quiz Questions imply the operation of
1.A rational producer will operate in the ____ stage a. Increasing returns to scale
of law of variable proportions b. increasing M.R.TS
a. Any of these c. constant MRTS
d. diminishing 18.The slope of the total production curve measures
9.Iso-quant curve is convex to the origin due to a. Maximium production
______ b. Marginal production
a. Increasing returns to scale c. Average production
b. Constant returns to scale d. Minimum production
c. D.M.R.T S 19.Which of the following is considered as
d. I.M.R.TS production in Economics ?
10.Larger production of goods would lead to higher a. A farmer tilling of soil
production in future b. A doctor treating his own wife
a. public goods c. Singing a song before friends
b. agricultural goods d. Painting a picture for pleasure
c. consumer goods Unit6 - 2 Mark Quiz Questions
d. capital goods 1.At the aggregate level, profit maximisation is
11.Marginal product curve is above the A.P.C when possible when
the AP is a. TR> AR
a. Increasing b. AR> AC
b. Decreasing c. MR> MC
c. Zero d. TR> TC
d. c. Constant 2.In a perfectly competitive market a profit
12.Production and productivity is one and the same maximising firm is
a. May be a. A price-searcher
b. I do not agree b. A price- taker
c. I agree c. A price-maker
d. May not be d. A price avoider
13.Production economics is 3.In which case profit maximisation is not justified
a. A branch of macro economics a. Firm working for promoting the well being of the
b. A branch of micro economics people
c. A management Jargon b. A firm is not a chartible institution
d. A branch of pure economics c. It is necessary for the very survival of the firm
14.Production function refers to d. It is a natural principle of a firm
a. Relationship between output and cost 4.One of the main character of the classical firm is
b. Relationship between physical input and output a. The risk of loss is spread over a large number of
c. Relationship between input and output persons
d. Relationship between cost and output b. The day to day management is entrusted to Board
15.Returns to factors is the other name of of directors
a. Law of Returns to scale c. More scope for division of labor
b. None d. The owner is entitled to enjoy the residual income
c. Return to fixed proportion after making payments to all
d. Law of variable proportions the factors inputs
16.The law of diminishing returns 5.Profit maximisation implies
a. states that beyond some level of a variable input, a. Higher level of profit
the marginal product of that b. optimum level of profit
variable begins to decrease steadily c. Highest possible level of profit
b. States that beyond some level of a variable input, d. large amount of profit
the average product of that 6.Profit maximising model is of the view that the
variable input begins to increase steadily success a firm depends on
c. Informs a producer whether or not to use a factor a. sales maximisation
input b. profit maximisation
d. Assumes that there is technological improvement c. Market share expansion
over time d. Growth maximisation
17.The law of variable proportions come into 7.Slack payment implies
operation when a. Reduction in payments by the management
a. There is a fixed factor and a variable factor b. Slow payments by the management
b. Variable factors yield less result c. Relaxation in payments by the management
c. There are only two variable factors d. Excess payment by the management as an
d. All factors are variable incentive
8.Theory of firm deals with c. AC.
a. The traditional firm d. AVC.
b. The owner-entrepreneurial preneurial firm 5.An individual firm forms to be a very small portion
c. The partnership firm of the market , not in a position to
d. The classical firm influence market output or price under
Unit7 - 2 Mark Quiz Questions a. Oligopoly.
1.Suppose a firm is selling 5 units of the output at the b. Imperfect competition.
price of Rs.15 per unit. Now if it c. Perfect competition.
wants to sell 6 units instead of 5 units and there by d. Duopoly.
the price of the product falls to Rs.14 6.At a point where P=RR=AC=MR=MC the firm will
then the marginal revenue will be be earning
a. Rs.14. a. Reasonable profit.
b. Rs.10. b. Subnormal profit.
c. Rs.9. c. Abnormal profit.
d. Rs.15. d. Only normal profit.
2.Suppose that the price of a product is Rs.6 and the 7.If the price is above the AVC and below the AC it
elasticity is 3 at that price MR will is called as
be a. Economic zone.
a. 6. b. Maximum loss zone.
b. 2. c. Normal profit zone.
c. 4. d. Loss minimization zone.
d. 3. 8.If the price is equal to AVC the firm will not be
3.To sell an additional unit of the commodity, seller able to cover its fixed cost and suffers
a. Need not reduce the price on all units. loss.
b. Should reduce the price for all the units. a. So it will wind up its operation.
c. Has to reduce the price for the additional unit. b. It will continue in business with the hope that the
d. Need not reduce the price at all. price may go up in future.
4.When AR = MR = P a firm can sell c. It will reduce its output
a. More only at a reduced price. d. It will expand its output.
b. More at the same price. 9.If the price of the product is inadequate to cover
c. Less at a higher price. either the AFC or the AVC the firm
d. More at a higher price. will have to
Unit8 - 2 Mark Quiz Questions a. Improve its capacity.
1.A firm can increase its output in the short run only b. Reduce its output.
by the c. Expand its output.
a. Improvement in its organization. d. Wind up its operation.
b. Intensive utilization of existing plant and 10.In order to maximize its benefit an economic unit
machinery. always has a tendency to move
c. Improvement in its techniques of production. towards
d. Improvement in its marketing techniques. a. Strengthening of its position in the market
2.A firm operating under conditions of perfect b. The highest point of output.
competitions can c. The lowest cost of production.
a. Determine only the size of its output. d. The equilibrium point.
b. Promote the sales through effective advertisement. 11.In the short run a firm can increase its output only
c. Determine the price of its product. by varying
d. Capture the market by cutting down the price. a. The variable factors.
3.A firm under perfect competition b. The application of capital.
a. Can fix the price according to his choice. c. All the factors of production.
b. Has to fix the price according to the cost. d. A few factors of production
c. Has to accept the price prevailing in the market. 12.The market situation which acts as a yardstick
d. Can fix the most remunerative price. against which all other models can be
4.A firm under perfect competition will not produce compared and evaluated is
any output unless the price is at least a. Duopoly.
equal to the minimum b. Monopoly.
a. AFC. c. Monopolistic competition.
b. MC. d. Perfect competition.
13.There is absolute freedom for the firms to enter or a. CPI=Price existing at current year/Price existing at
quit the industry under coming yearX100
a. Imperfect competition. b. CPI=Price existing at current year/price at base
b. Bilateral monopoly. yearX100
c. Oligopoly. c. CPI=Price existing at base year/price at current
d. Perfect competition. yearX100
Unit9 - 2 Mark Quiz Questions d. CPI=Price existing at coming year/Price existing at
1.Consumers' surplus will be more in case intensity current yearX100
for a product is 3.Identify the incorrect answer.
a. Low a. The value of money is inversely related to the
b. Very high general price level
c. Very low b. The prices of all goods does not change in a
d. High uniform manner
2.In which case consumers' surplus will be more? c. "d. The value of money is inversely related to
a. Cost purchasing power and directly
b. benefit related to general price level."
c. When both are less d. The value of money is derivate
d. Benefit> cost 4.In order to cosntruct CPI which of the following
e. Cost > benefit item is not taken in to account?
3.The volume of consumers' surplus will be more in a. prices existing at the base year and the prices in the
case of current year
a. Lower middle income countries. b. Price data from retail outlets
b. Middle income countries c. Price data from wholesale market
c. Poor nations d. Family budget surveys from time to time
d. Rich nations 5.National income in general refers to
4.There is a. NNP at market prices
a. An inverse relationship between consumers' b. NNP at factor cost
surplus and price. c. GNP at market prices
b. A direct relationship between consumer's surplus d. GNP at factor cost
and price 6.Which of the following statement is correct?
c. A direct relationship between price and consumers' a. If NI rises, welfare of the people must also rise
surplus b. If NI rises, Per capita income must also rise
d. An inverse relationship between price and c. If population increases, per capita income must
consumers' surplus also fall
5.There is a direct and definite relationship between d. None of the above
expected and realised satisfaction Unit11 - 2 Mark Quiz Questions
a. Always 1.Does the increase in income always leads to an
b. Some cases increase in consumption expenditure
c. None of the above a. Yes consumption expenditure increases at a less
d. Difficult to say than proportionate rate.
6.There is a direct relationship between price and b. Consumption increases more than proportionately.
consumers' surplus in case of c. Yes a great increase in consumption expenditure.
a. Independent goods d. No, there will be no increase in consumption
b. Comforts expenditure
c. Status symbol goods. 2.Keynes psychological law of consumption states
d. Necessaries of life that as aggregate income increases
Unit10 - 2 Mark Quiz Questions consumption expenditure shall also increase but by a
1."Which of the activity is included in the calculation a. More than proportionate rate.
of the national income of a b. Smaller amount.
country?" c. Greater amount.
a. A maid servant rendering her service in a house d. Proportionate rate.
b. A teacher teaching his own son 3.Propensity to consume in the short period is
c. A doctor treating his own wife generally
d. A student singing in a college competition a. Stable.
2.Choose one answer. b. More.
c. Unstable.
d. Less.
4.Rising MPC during depression and declining MPC
during boom explain the
a. Way in which the economy is moving.
b. Turning points of the business cycles.
c. Level of fluctuations.
d. Rate of economic activity.
5.The sum of MPC and MPS
a. Equals 1.
b. Is greater than 1
c. Equals aggregate income.
d. Is less than 1.
Unit12 - 2 Mark Quiz Questions
1.A cheap money policy refer to
a. Reduction in the supply of credit.
b. Expansion of money supply.
c. Reduction the supply of money.
d. Reduction in the interest rates.
2.A dear money policy refer to
a. A rise in the rate of interest.
b. A reduction in the supply of credit.
c. A reduction in the supply of money.
d. Expansion in the supply of credit.
3.Countercyclical measures and the measures
adopted to compensate for the predicted
changes in employment and output to improve
community welfare are referred to as
a. Stabilization policy.
b. Monetary policy.
c. Fiscal measures.
d. Physical controls.
4.In order to promote smooth and unhindered
international trade and free flow of foreign
exchange into a country what should be the objective
of monetary policy?
a. Exchange rate stability.
b. Liberal.
c. Positive.
d. Price stability.
5.To attain full employment through adequate supply
of money and credit available
resources are to be fully utilised
a. To raise effective demand in the economy.
b. To encourage investment.
c. To promote rapid economic growth.
d. To maintain equilibrium.
Unit14 - 2 Mark Quiz Questions
1.Authoritative persuasions , publicity campaigns
etc., example compulsory purchase of
national savings certificates by the salaried class,
companies to restrict dividend
distribution etc., is known as
a. Fiscal control.
b. Physical control.
c. Exhortations.
d. Monetary control.
2.Galloping inflation continuously reducing the
purchasing power of money brings
a. Unprecedented growth of the economy.
b. Foreign flow of funds into the economy.
c. A total collapse of the monetary system.
d. Prosperity to the economy.
3.Periodic adjustments in money incomes of the
people and in the value of financial
assets, saving deposits etc., held by the public in
accordance with the changes in the price
level by the monetary authorities is known as
a. Adjustment.
b. Tuning.
c. Correction.
d. Indexing.
4.When the rise in prices is very slow like that of a
snail or creeper it is called
a. Halting inflation.
b. Creeping inflation.
c. Hidden inflation.
d. Limping inflation.
Unit15 - 2 Mark Quiz Questions
1.Dumysing industrial wastage into a river, polluting,
air,water,soil,noise,create bad
odour by an individual organisation
a. Micro level negative externalities
b. Macro level negative externalities
c. Macro level positive externalities
d. Micro level positive externalities
2.Expenditure on national defence, law and order
control of terrorism etc are the example
for
a. Negative macro externalities
b. positive macro externalities
c. Positive micro externalities
d. negative micro externalities
3.Identify the incorrect answer, Sustainable economic
development is possible when
a. There is proper balance between short run and long
run interests
b. The stocks of various types of resources are
maintained and further improved
c. Current national output is the highest possible
d. There is proper balance between present and future
use of resosurces
4.Money spent on a temple, free hospital, old age
house etc by an individual or
organisation is an example for
a. Negative micro externalities
b. Positive micro externalities
c. Negative macro externalities
d. Positive macro externalities
5.Negative externalities
a. Decrease social costs
b. Increase social benefits
c. Increase social costs
d. Decrease social benefits
6.Positive externalities
a. Decrease external social benefits
b. Increase external social benefits
c. Increase external social costs
d. Decrease external social costs
7.Society will get maximum benefits when_______
a. Social benefits < social costs
b. social costs
c. Social costs > social benefits
d. Social benefits> social costs
e. Social benefits
8.The negative externality created by a firm
a. Impose extra financial burden on a firm
b. Does not compensate people for the damages it has
created
c. Impose extra financial burden on government
d. Does compensate people for the damages it has
created
Managerial Economics
Unit1 - 4 Mark Quiz Questions
1.Identify correct answer Managerial economics is
a. A new discipline and a positive science
b. A descriptive science which highlights on
normative aspects of business activities
c. A prescriptive and pragmatic science
d. A highly specialised branch and a part of
traditional economics
2.Identify the incorrect answer? Managerial
Economics
a. Integrates economic theories with business
management decisions and practices
b. Deals with formulation and understanding of
various economic theories and
principles
c. Lies mid way between economic theory and
business management
d. Fills up the gap between abstract theory and
managerial practice
3.Managerial Economics highlights on
a. Developing new models of thoughts in the
background of changing business and
management environment
b. Application of economic models to solve business
and management problems.
c. Model building and formulation of various
economic theories and principles
d. Application of economic models to analyse
business problems
4.Managerial Economics is a science that deals with
a. Study of micro units but analyse the influence of
macro economic units
b. Study of only micro economic units without
reference to macro units
c. Study of both micro economic units and macro
economic units
d. Study of only macro economic units without
reference to micro units
Unit2 - 4 Mark Quiz Questions
1.Relatively elastic demand More than
proportionate change in demand
Relatively inealstic supply Less than proportionate
change in supply
Relatively elastic supply More than proportionate
change in supply
Relatively inelastic demand Less than
proportionate change in demand
2.Relatively inelsatic demand < 1
Unitary elastic demand = 1
Relatively elastic demand > 1
Perfectly inelastic demand = 0
3.total expenditure decreases with a fall in price and
increases with a rise
in price
=inf inite
total expenditure remains constant when price either
=1
total expenditure becomes indeterminate when there
is very small C>1
Total expenditure increases with a fall in price and
decreases =
4.Arc method of price elasticity of demand
a. Measures average elasticity over a segment of the
demand curve
b. Measures small changes in price and demand
c. Measures elasticity at different points on a demand
curve.
d. Measures elasticity at a point on the demand curve
5.Demand for product X changes on account of
changes in prices of related goods, tastes
and preferences of consumers, nature of
advertisements and income level of
consumers.This is an example for
a. Individual demand schedule
b. Law of demand
c. market demand schedule
d. Demand function.
6.Demand would become elastic when
a. Use can be postponed but it absorbs only a very
small proportion of budget of
consumers
b. Purchase frequency of consumers is low and a
consumer is not habituated for the
use of a product
c. It has only one use but has no substitutes
d. It has multiple use but has susbstitutes
7.Demand would become inelastic when
a. A product is essential but it has substitues
b. There is no possibility of postponing the use of a
product but the product is
repairable
c. A product is demanded with other product but the
consumer uses the product in
the long run
d. A product has no substitutes and consumes a very
big proportion of the budget
the consumer
8.Identify the correct answer.
a. When the price of comforts rises, demand for them
also would go up
b. When price of veblen goods rises by 5%, demand
for that proeduct also go up
c. When the price of essential products rises, demand
for them falls.
d. When price of Giffen goods falls, demand for that
product rises
9.Identify the correct answer.
a. Income elasticity is zero when the product is
neutral.
b. Income elasticity is negative when the product is
essential
c. Income elasticity is positive when the product is
luxury
d. Income elasticity is positive and greater than one
when the product is normal
10.Identify the correct answer.
a. Cross elasticity is negative when goods are
complemetaries
b. Cross elasticity is zero when goods are
independent of each other
c. cross elasticity is very high in case of subtitutes
d. Cross elasticity is positive when goods are close
substitutes
11.Identify the correct answer. What will be the
nature of consumers reaction in the
following cases
a. When they expect future fall in prices, they would
buy larger quantities at present
b. When they expect future rise in price, they would
buy smaller quantity at present.
c. When they expect future scarcity of a product, they
would buy smaller quqntity at
present
d. When they expect future scarcity, they would buy
larger quantities at present
12.Identify the incrorrect answer.
a. Inspite of rise in price of a good, a consumer would
buy more of it if he has to
arrange the marriage of his daughter
b. Inspite of rise in prices, consumers would buy
more during festival seasons
c. Inspite of rise in the income of consumers, they
will not buy more of inferior
products.
d. Inspite of fall in the quality of a product,
consumers would buy more of them
13.If the quantity of commodity A demanded
increases from 8 units to 12 units as a result
of an increase in the price of commodity B from Rs.
23-00 to 27-00, then the cross
elasticity of demand for A with respect to the price of
B is approximately
a. 0.35 and A & B are substitutes
b. 0. 35 and A & B are complements
c. 2.5 and A & B are susbstitutes
d. 2.5 and A & B are complements
14.Mr. Kiran is the owner of an Ice-cream parlour.
When he would take a decision to
increase the price of his Ice-cream
a. Demand for other brands of Ice-cream falls.
b. Demand for Ice-Cream rises but unemployment
level in the city increases
c. A new brand of Ice-Cream enters in to market but
its quality is low when
compared to the Ice-cream sold by Mr. Kiran
d. Price of sugar rises but demand for Ice-Cream falls
15.Point elasticity is =
point elasticity is=
a. Lower segment of the demand curve below the
point /Upper segment of the
demand curve above the point
b. Lower segment of the demand curve above the
point/Upper segment of the
demand curve below the point
c. Upper segment of the demand curve above the
point/Lower segment of the
demand curve below the point
d. Upper segment of the demand curve above the
point/Lower segment of the
demand curve below the point
16.Point method measures PED at
a. Major changes in quantity demanded
b. One point on the demand curve
c. At different points on the demand curve
d. Major changes in price.
17.Product X is a popular brand of a commodity used
by common man in his day to day
life Now the price of product X falls while the prices
of other products remains the same.
This would lead to
a. A positive income effect and positive susbtitution
effect on X
b. A negative income effect and a negative sustitution
effect on X
c. A positive income effect but a negative price effect
on X
d. A positive price effect but a negative income effect
on X
18.Substitution elasticity of demand=
a. % change in quantity demanded of Y/% change in
price of X
b. % change in demand ratio of two goods X & Y/% c. Rise or fall in supply
change in price ratio of two d. Exception to the law of supply
goods X & Y 3.When more is supplied at the same price or same
c. % change in price of X/% change in quantity quantity is supplied at a lower price it
demanded of Y is case of
d. % chnge in price ratio of two goods X & Y/% a. Extension of supply
change in demand ratio of two b. Fall in supply
goods X & Y c. Decrease in supply
19.The following is the market demand schedule for d. Increase in supply
product X. Out of 4 alternatives 4.When supply rises with a rise in price and falls with
identify a fall in price what will be the
Price is Rs A B C Total shape of the supply curve
20-00 200 300 250 750 a. Negative slope
15-00 250 400 300 950 b. Horizontal shape
10-00 300 500 450 1250 c. Vertical shape
8-00 400 600 500 1500 d. Positive slope
5-00 600 800 700 2100 Unit5 - 4 Mark Quiz Questions
a. Helps in predicting changes in expected sales It is associated
b. A steady fall in price has no impact on the demand with supply
for the product side changes
c. Helps in estmating expected profit percentage of in output
sellers it indicates savings in cost due to production of
d. Helps a producer to plan his production schedule. more than one product
20.Three of the following four events might It is associated
reasonably responsible for shifting demand with increase
curve for Tea, to a new position. Point out the one or decrease in
which would not shift demand curve. scale of
a. A rise in the price of tea. production
b. An aggressive sales promotion policy of tea it shows a change in output more than one
growers product
c. A fall in theprice of tea It shows
d. An increase in the money income of consumers changes in
Unit4 - 4 Mark Quiz Questions output of
1.Rise in price leads to fall in demand and a fall in single product
price leads a rise in demand It is associated with demand side change in
Law of demand output
Rise in price leads to a rise in demand and a fall in it indicates
price leads to a fall in demand savings in cost
Exception to the Law of supply owing to
Rise in price leads to a rise in supply and a fall in increase in
price leads to a fall in supply volume of
Exception to the Law of supply output
Fall in price leads to a rise in supply and a rise in It is connected w ith increase or decrease in
price leads to a fall in supply distribution to marketing
Exception to the law of demand 2.A firm encounters its shut down point when
1.The law of supply is not in operation when the a. Average variable cost equals price at profit
supply curve maximumising level of output
a. Slopes backward b. Average total cost equals price at the profit
b. Assumes a negative shape maximising level of output
c. Is a vertical straight line. c. AFC equals price at profit maximumising level of
d. Slopes forward output
2.When a rise in price causes a rise in supply and a d. MC equals price at profit maximising level of
fall in price causes a fall in supply it output
is a case of 3.If one unit of labor and one unit of capital give 200
a. Extension or contraction of supply units of output, two units of labor
b. Increase or decrease of supply
and 2 units of capital give 400 units of output 5 units B 11 2
of labor and 5 units capital of lap C83
give 1000 units of output ,then it will be a case of D64
a. Dimining returns to scale E55
b. Increasing returns to scale The MRTS X for Y for the C combination is?
c. Constant returns to scale a. 2
d. constant returns b. 1
4.Hours of Labour Total output in units Marginal c. 3
product in units d. 4
000 9.Combination Factor X Factor Y
1 100 100 A 15 1
2 80 B 11 2
3 240 - C83
What is the total output when 2 hrs of labor are D64
employed? E55
a. 100 The MRTS of X for Y for the D combination is?
b. 180 a. 3
c. 200 b. 4
d. 80 c. 2
5.Hours of Labour Total output in units Marginal d. 1
product in units 10.Combination Factory X Factor Y
000 A 15 1
1 100 100 B 11 2
2 80 C83
3 240 - D64
What is the marginal product of the third Hrs of E55
labor? The MRTS of X for Y for the B combination is ?
a. 100 a. 3
b. 240 b. 4
c. 60 c. 1
d. 80 d. 2
6.Hours of Labour Total output in units Marginal 11.Combination Factor X Factor Y
product in units A 15 1
000 B 11 2
1 100 100 C83
2 80 D64
3 240 - E55
What is the average product of first hr of labor? The MRTS of X for Y for the E combination is?
a. 80 a. 11
b. 100 b. 1
c. 240 c. 2
d. 60 d. 3
7.Hours of Labour Total Output in units Marginal 12.The II phase of the law of variable proportion is
product in units described as the most economic
000 region because of the following reasons except
1 100 100 a. Total output is highest even before the marginal
2 80 product is zero
3 240 - b. Represents the range of rational production
What is the average product of the first 3 hrs of decision
labor? c. Total output is highest when marginal product zero
a. 240 d. The producer is employing the most ideal factor
b. 100 combinations.
c. 80 13.The law of diminishing returns applies to
d. 60 a. The long run, but not the short run
8.Combination Factor X Factor Y b. The short run,but not the long run
A 15 1 c. Neither the short run nor long run.
d. Both the short run and the long run
14.The main difference between the short run and
long for economists is that
a. In the short run all inputs are fixed while in the
long run all inputs are variable
b. In the short run,atleast one of the firms input level
is fixed
c. In the short run the firm varies all of its inputs to
find the least cost combination
of inputs
d. In the long run, the firm is making a constrained
decision about how to use
existing plant and equipment efficiently
15.The marginal, average and total product curves
encountered by the producer
producing in the short run exhibit all the following
relationship except
a. When marginal product is negative, total is
negative total and average products
are falling
b. when total product is rising average and marginal
products may be either rising
or falling
c. When marginal product is at a maximum average
equals marginal product and
total product is rising
d. When average product is at a maximum, marginal
product equals average product
and total product is rising
16.The short run, as economists use the phrase is
characterised by
a. Atleast one fixed input and firms neither leaving
nor entering the industry
b. All factor inputs are fixed
c. A period where the law of diminishing returns this
does not hold good
d. All factor inputs are variable
Unit6 - 4 Mark Quiz Questions
1.According to Cyert and March it the actual
perfermance and achievements of a firms is
much lower than expected aspirations and targets in
that case
a. There will be a downward revision in the demands
of various groups
b. There will be a negative revision in the demands of
various groups
c. There will be upwards revision in the demands of
various groups
d. There will be a normal revision in the demands of
various groups
2.According to Cyert and March which of the
following statements is incorrect ?
a. There is need for harmonious and balanced
blending of different objectives of an
organisation and multiple objectives of different
groups
b. Making satisfactory levels or proifit rather than
maximum profits has become the
slogan of the day.
c. The management has to acccomodate as little as
possible the demands of different
groups with out sacrificing its own basic objective of
making profits
d. Model highlights on satisfactory level of
performance and achievements of its
multiple objectives as maximisation of different goals
are not possible in a
competitive world
3.Which of the following measure is adopted to over
come conflicts of different groups
and ensure smooth working of the organisation by
Cyert and March
a. The management may follow the policy of
sequential hearing of demand
b. All the three methods
c. Demands of each group may be seperated and
separate attempts are made to
fulfill them
d. The management may tackle the problem by
deentrialising the decision making
process
Unit7 - 4 Mark Quiz Questions
1.A firm is selling 6 units of the output at the price of
Rs.20 per unit. Now if it wants to
sell 7 units the price of the product fall toRs.18. or if
it wants to sell 8 units the price will
fall to Rs.15. what the firm should do?
a. The firm should continue to sell the same quantity.
b. The firm can increase its sales to 8 units.
c. The firm should reduce its sales.
d. The firm can increase its sales to 7 units.
2.If a demand curve shows unitary elasticity
throughout its length the corresponding MR
will be
a. Very high.
b. Same.
c. Zero throughout.
d. Very low.
3.Suppose that the price of a commodity is Rs.20 and
the elasticity coefficient at that
price is 1, MR will be
a. 0.
b. 2.
c. 1.
d. 10.
4.The slope of the TR curve is measured by
a. AC.
b. TC.
c. AR.
d. MR.
Unit9 - 4 Mark Quiz Questions
1.Consumers' surplus helps the government to grant
subsidy to private entrepreneurs
a. If the amount of gain to people due to subsidy is
greater than the financial loss to
the government on account of grant of subsidy
b. If the amount of gain to people due to subsidy is
equal to the financial loss to the
government on account of grant of subsidy
c. If the financial loss to the governement is greater
than benefit to the people.
d. If the amount of gain to people due to subsidy is
lower than the financial loss to
the government on account of grant of subsidy
2.Consumers' surplus helps to decide introduction of
a new product in to the market when
a. Benefits from new product is equal to the new
product
b. Benefits form old product is not equal to new
product.
c. Benefits from the old product is greater than new
product
d. Benefits from new product is greater than old
product
3.Consumers' surplus helps to decide the taxation
policy of the government is good when
a. The loss to the government due to tax collection is
lower than gain to consumers.
b. "c. The gain to the government due to tax
collection is lower than gain to
consumers due to tax payment"
c. "b. The loss to the government due to tax
collection is greater than the gain to
consumers due to tax payment"
d. "a. The gain to the government due to tax
collection is greater than the loss to the
consumers due to tax payment"
4.Welfare of the people will be greater in those
economies where
a. Prices fall and cosnumers' surplus rise
b. Prices rise and cosnumers' surplus rise.
c. Prices rise and consumers' surplus fall
d. Prices fall and consumers' surplus fall
Unit10 - 4 Mark Quiz Questions
1.It is a quantity measured at a particular point of
time Independent Variable
It is a quantity which can be measured during a given
period
of time
Ratio Variable
Expresses the quantitative relationship between two
different
variables at a cetain time"
Stock Variable
Change in one variable cause changes in another
variable Flow Variable
2.It refers to the actual results obtained Ex- Post
it is a position where the forces operating in the
system are not in
balance"
Equilibrium
It is position where two opposing forces tend to
balance with each
other
Ex- Ante
It refers to the expected results Disequilibrium
3.The value of a quantity does not change
Parameter
It is a quantity which when varies affects the value of
another
variable
Dependent Variable
The value of one variable varies as a result of
variations in the
vlaue of some other variables
Functions
t suggests the value of some thing depends on the
value other Constant
4.Realised result capital
Creation of new capital assets Ex-post
Anticipated result Ex- ante
All man-made aids that helps in the production of
wealth Investment
Unit11 - 4 Mark Quiz Questions
1.As income increases consumption expenditure
a. Increases proportionately.
b. Increase progressively.
c. Progressively diminishes.
d. Will remain the same.
2.Investment which varies with the changes in the
level of national income is called
a. Autonomous investment.
b. Ex post investment.
c. Ex ante investment.
d. Net investment.
3.One of the remedial measures suggested by Keynes
to overcome unemployment is to
a. Increase the propensity to consume.
b. Reduce the rate of interest.
c. Increase the level of investment.
d. Provide subsidies to investors.
4.Rise in incomes in most advanced countries
because of declining MPC take the
economy to a stage which Keynes calls as
a. Stagflation.
b. Disinflation.
c. Suppressed inflation.
d. Secular stagnation.
5.Suppose total income increases from Rs. 1000
crores to Rs. 2000 crores and the total
consumption increases from Rs. 800 crores to Rs.
1400 crores what is the marginal
propensity to consume
a. 50 %. d. Increase in government expenditure.
b. 60 %. 3.There will be a decline in the level of investment in
c. 40 %. stocks, this reduces the deposits
d. 45 %. with the banks and other financial institutions leading
Unit12 - 4 Mark Quiz Questions to a contraction in bank credit
1.Restrictive fiscal measures and monetary tightening during
are designed to be a platform for a. Depression.
successful b. Recession.
a. Monetary policy. c. Revival.
b. Physical policy. d. Contraction.
c. Administrative policy. 4.Trade cycles cause more fluctuations in
d. Long run growth and reform. a. Rent.
2.To check cyclical fluctuations, smoothen b. Interest.
production and distribution, prevent artificial c. Profits.
scarcity and to check inflated rise in prices what d. Wages.
should be the objective of monetary 5.When the new product loses its novelty with the
policy introduction of many competing
a. Control credit expansion. verities of the product in the market
b. Debt management a. Prices get stabilized.
c. Price stability. b. Abnormal profits are competed away.
d. Monetary equilibrium. c. Market shrinks.
3.To curb inflation through contraction of credit d. Normal profits exist.
central bank may resort to Unit14 - 4 Mark Quiz Questions
a. Open market sale of foreign exchange reserves. 1."The inflationary gap is the amount by which
b. Open market purchase of securities. aggregate expenditure would exceed
c. Open market sale of securities. aggregate output at the full employment level of
d. Open market sale of gold. income". According to
4.To encourage the flow of short term capital into the a. Kemmerer.
country the central bank may b. Hansen.
a. Maintain stable bank rate. c. Lipsey.
b. Raise the bank rate. d. J.M.Keynes.
c. Reduce the lending rates. 2.A rate of inflation of 10% to 20% which affects
d. Reduce the bank rate. poor and middle class adversely
5.When high degree of fluctuations are caused in requires strong monetary and fiscal measures to
overall economic activity because of control it otherwise it leads to
inflation or deflation the objective of monetary policy a. Ruinous inflation.
should be b. Distructing inflation.
a. Full employment. c. Running inflation.
b. Price stability. d. Hyper inflation.
c. Restricting the supply of money and credit. 3.Demand pull inflation is the result of
d. Control of trade cycle. a. Increase in money supply.
Unit13 - 4 Mark Quiz Questions b. Increase in production.
1.At which stage low wages, low interest rates, low c. Increase in the cost of production.
production costs induce business d. Increase in the supply of goods.
people to take more risks and invest more 4.If the net disposable income with the community is
a. Depression. Rs.15000 crores and the
b. Recession. government expenditure to meet the war
c. Revival. requirements is Rs.9000 crores the inflationary
d. Contraction. gap would be
2.Dislocation and disturbances in the normal working a. Rs.1000 crores.
of the economy caused by low b. Rs.6000 crores.
prices, low profits, low output and unemployment c. Rs.9000 crores.
can be cured by d. Rs.10000 crores.
a. Increase in private investment. 5.Inflation rate of 3% to 7% which serves as a
b. Decrease in the rate of interest. warning signal for the government to
c. Expansion in the supply of money.
control it before it turns into running inflation is
called
a. Walking inflation.
b. Signaling inflation.
c. Creeping inflation.
d. Latent inflation.
6.Inflationary gap can be wiped out more efficiently
by
a. Curtailing the demand.
b. Increasing in the prices.
c. Increase in the output.
d. Raising the tax rates.
Unit15 - 4 Mark Quiz Questions
1.Optimum economic efficienly in resource
allocation to produce different goods and
services is possible when
a. MPB + MPC
b. MEB+ MEC
c. MEB + MPC
d. MPC + MEC
e. MPC + MEC
f. MPB + MEB
g. MPB + MEC
h. MPB + MEB
2.There will be optimum economic efficiency in
resource allocation to produce different
goods and service when
a. MSC > MSB
b. MSC
c. MSB
d. MSB > MSC
e. MSB < MSC