1. Indicate the correct code for the scope of manage- rial economics from the following:
a. Demand Analysis
b. Production and Cost Analysis
c. Pricing and Investment Decisions d. Factor pricing Decisions
e. Economic Environmental Analysis Codes:
(1) a, b, c, d
(2) b, c, d, e
(3) a, b, c, e
(4) a, c, d, e
Answer: (3)
2. Price elasticity of demand for a product is meas- ured by
(1) Ed = Q × P QP
(2) Ed = Q P QP
(3) Ed = P × Q P P
(4) Ed = P Q PQ
(Where Ed = elasticity of demand, Q = Quantity, P = Price and ƒ = represents change)
Answer: (2)
3. Which one of the following will be the appropriate pricing strategy for a new product expecting an expanding market?
(1) Monopoly pricing
(2) Skimming pricing
(3) Penetrating pricing
(4) Differential pricing
Answer: (3)
4. Match the items of the List. I with those of the
List. II and suggest the lowing:
List - I correct code from the fol- List - II
i. Loss Leader a. Locational price differentials
ii. Unchanged Pricing b. Products with high initial demands
iii. Basing Point Pricing c. Product line pricing
iv. Skimming Pricing d. Oligopoly pricing
Codes:
i ii iii
(1)a b c
(2)c d a
(3)d b a
(4)c a b
Answer: (2)
5. In case the firm makes varying investments on the different investment projects, the appropriate project evaluation technique would be, which one of the following?
(1) Average annual rate of return technique
(2) Pay back period technique
(3) Net present value technique
(4) Profitability index technique
Answer: (4)
6. According to Henry Fayol, which one of the fol- lowing combinations of qualities are required in manager?
(1) Physical, mental, experience, educational and conceptual
(2) Technical, human, conceptual, mental and moral
(3) Physical, mental, moral, educational, technical and experience
(4) Mental, moral, conceptual, educational, technical and experience
Answer: (3)
7. Neo-classical organisation theory emphasises on which one of the following?
(1) Flat structure of organisation
(2) Tall structure of organisation
(3) Coordination by hierarchy
(4) Unity of command
Answer: (1)
8. According to Graicuna’s formula of span of man- agement, if a superior has three subordinates, what number of cross-relationships would be?
(1) three
(2) six
(3) nine
(4) eighteen
Answer: (2)
9. In Reddin’s ‘Tridimensional Grid’, which one of the following is a less effective style of leadership?
(1) Developer
(2) Missionary
(3) Executive
(4) Bureaucrat
Answer: (2)
10. Assertion (A): Attribution theory is based on rela- tionship between personal perception and interper- sonal behaviour.
Reasoning (R): Since most ‘whys’ are not directly observable, people must depend upon cognitions, particularly perception.
Codes:
(1) (A) is right but (R) is wrong.
(2) (A) is wrong but (R) is right.
(3) Both (A) and (R) are right but (R) does not explain (A).
(4) Both (A) and (R) are right and (R) explains (A).
Answer: (4)
11. Arrange the following steps of training and devel- opment process in the right sequence:
a. Need analysis
b. Validation
c. Evaluation
d. Implement the programme e. Instructional design
(1) a, e, d, c, b
(2) a, e, c, b, d
(3) a, e, b, d, c
(4) a, b, e, c, d
Answer: (3)
12. Which one of the following is related to ‘Standard of Personnel’?
(1) Job Specification
(2) Job Description
(3) Job Design
(4) Job Evaluation
Answer: (1)
13. If an employee desires to pay more than the min- imum required contribution under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952, then
(1) employer shall also pay an amount equal to the total contribution of employee.
(2) employer shall pay only half of the additional contribution of employee.
(3) employer is under no obligation to pay the addi- tional contribution.
(4) the act is silent regarding this matter.
Answer: (3)
14. Under the Employees’ State Insurance Act, 1948, sickness benefit can be paid for which one of the following maximum periods?
(1) 45 days in two consecutive benefit periods.
(2) 66 days in two consecutive benefit periods.
(3) 91 days in two consecutive benefit periods.
(4) 180 days in two consecutive benefit periods.
Answer: (3)
15. Which one of the following laws is enacted by the Central Government and enforced by the State Governments?
(1) The Employees State Insurance Act, 1948
(2) The Employees’ Provident Fund and Miscellaneous Provisions Act, 1952
(3) Factories Act, 1948
(4) The Mines Act, 1952
Answer: (3) [
16. The cost of external equity can be most appropri- ately computed as per the
(1) Earnings price ratio
(2) Dividend price ratio
(3) Dividend price plus growth ratio
(4) Capital assets pricing model
Answer: (4)
17. For the following items in List – I and List – II, indicate the correct code after matching them:
List – I
i. Net income approach for capital structure
ii. Net operating income approach for capital structure
iii. Irrelevance of capital structure for the value of the firm.
iv. FRICT analysis for capital structure
List – II
a. Modigliani, M. and Miller M.H.
b. Robert Bruner
c. Ezra Soloman
d. David Durand
Codes:
i ii
(1)a c d b
(2)d a b c
(3)d c b a
(4)b a d c
Answer: (2)
18. Which one of the following is not a feature of ‘Preference Shares’?
(1) Prior claim on income / assets of the company over equity shareholders.
(2) Redeemability after certain period.
(3) Possessing voting rights on important issues of the company.
(4) May possess the right to participate in surplus profits of the company.
Answer: (3)
19. The basic consideration for dividend pay-out for a company excludes which one of the following?
(1) Investment opportunities for the company
(2) Expectations of the shareholders of the company
(3) Legal and financial restrictions for the company
(4) Stability of the dividend considerations
Answer: (4)
20. For the following two statements of Assertion (A) and Reasoning (R) indicate the correct code:
Assertion (A): Shareholders Wealth Maximisation (SWM) and not the profit maximisation is an appro- priate and operationally feasible financial manage- ment goal.
Reasoning (R): There exists a principal-agent rela- tionship between the shareholders and the manage- ment of the company.
Codes:
(1) (A) and (R) both are correct.
(2) (A) is correct but (R) is incorrect.
(3) (A) is incorrect but (R) is correct.
(4) (A) and (R) both are incorrect.
Answer: (1)
21. Which one of the following components is not the part of broad marketing environment?
(1) Technological environment
(2) Task environment
(3) Demographic environment
(4) Natural environment
Answer: (2)
22. The Coco Cola Company markets a wide range of different beverage products including bottled water, soft-drinks, juices and sports drinks. Each product appeals to a different segment. This is an example of which type of market offering?
(1) Differentiated marketing
(2) Target marketing
(3) Undifferentiated marketing
(4) Intensified marketing
Answer: (1)
23. Temporarily reducing prices to increase short- run sales is an example of which one of the fol- lowing?
(1) Segmented pricing
(2) Promotional pricing
(3) Dynamic pricing
(4) Geographical pricing
Answer: (2)
24. Match the items of List – I with the items of List – II and indicate the code of correct matching:
List – I
a. Brand elements
b. Brand line
c. Brand personality
d. Brand promise
List – II
i. The marketer’s vision of what the brand must be and do for consumers.
ii. All products, original as well as line and category extensions, sold under a par- ticular brand name.
iii. Those trademarkable devices that serve to identify and differentiate the brand.
iv. The specific mix of human traits that may be attributed to a particular brand.
Codes: abcd
(1) iii ii iv i
(2)i ii iii iv
(3)iii i iv ii
(4) iv iii ii i
Answer: (1)
25. Statement – I: In developing advertising pro- gramme marketing managers must always start by identifying the target market and buyer motives.
Statement – II: A company may run multiple ad campaigns at the same time, each emphasizing dif- ferent aspects of its brand and service.
(1) Only Statement – I is correct.
(2) Only Statement – II is correct.
(3) Both Statements – I and II are correct. (4) Both Statements – I and II are incorrect. Answer: (3)
26. Match the items of List – I with the items of List – II and select the code of correct matching with regard to forecasting models for operations:
List – I
(Model Type (name) a. Delphi technique
b. Economic modeling
c. Exponential Smoothing
Codes: abc
(1) i ii iii (2)iii i ii
List – II
(Description)
i. Causal quantitative model
ii. Quantitative model (Naive)
iii. Qualitative model
(3) iii ii i
(4) ii iii i
Answer: (2)
27. In which one of the following situations, a prod- uct-oriented layout is appropriate?
(1) A medical clinic
(2) An automated carwash
(3) A work centre for welding, heat treating and painting
(4) A home plumbing repair business.
Answer: (2)
28. A graphic tool to trace the interaction of several workers with one machine is termed as
(1) Gang process chart
(2) Flow process chart
(3) Activity chart
(4) Operation chart
Answer: (1)
29. Which one of the following is a technique of sta- tistical quality control used for product control?
(1) R-chart
(2) Sampling plan
(3) np-chart
(4) control-chart
Answer: (2)
30. The decision-criterion in which a decision-maker selects an alternative that maximizes H (criterion of realism) = [a × (maximum in column)] + [(1 -- a) × (minimum in column)] is called
(1) Laplace criterion
(2) Hurwicz criterion
(3) Wald’s criterion
(4) Bayesian criterion
Answer: (2)
31. Which one of the following expressions relates to an event which represents the occurrence of either A or B or both?
(1) A B
(2) A B
(3) A B
(4) (A B) (A B)
Answer: (1)
32. A Bernoulli process has all but which one of the following properties?
(1) Each trial has two possible outcomes.
(2) The probability of a success on any trial remains fixed over time.
(3) The probability of success on any trial is equal to the probability of failure.
(4) Trials are statistically independent.
Answer: (3)
33. Statement - I: The product of coefficient of correla- tion, standard deviation of variable ‘X’ and Standard deviation of variable ‘Y’ gives the measure of covari- ance between X and Y variables.
Statement - II: The product of coefficient of corre- lation between X and Y variables and the ratio between standard deviation of X variable to standard deviation of Y variable measures the slope of the regression line of X on Y variable.
Codes:
(1) Both the Statements are correct.
(2) Both the Statements are incorrect.
(3) Statement- I is correct while Statement - II is incorrect.
(4) Statement - I is incorrect while Statement - II is correct.
Answer: (1)
34. Statement - I: Both the probable error and standard
error of the coefficient of correlation are different.
Statement - II: When a sampling distribution of mean is prepared by taking small sized samples from a normally distributed population, the distribution takes the shape of normal distribution.
Codes:
(1) Both the Statements are correct.
(2) Both the Statements are incorrect.
(3) Statement - I is correct while Statement - II is incorrect.
(4) Statement - I is incorrect while Statement - II is correct.
Answer: (1)
35. Which one of the following is not the major char- acteristics of internet?
(1) Open
(2) Expensive
(3) Global
(4) Untrusted
Answer: (2)
36. Assertion (A): Private foreign capital lends to flow to the high profit areas rather than to the priority sec- tors.
Reasoning (R): One of the important limitations to utilize the foreign capital is the absorptive capacity of the recipient country.
Codes:
(1) (A) and (R) both are correct and (R) is the correct explanation of (A).
(2) (A) and (R) both are correct but (R) is not the cor- rect explanation of (A).
(3) (A) is correct whereas (R) is incorrect. (4) (R) is correct whereas (A) is incorrect. Answer: (2)
37. Consider the following statements and identify the correct code of true statements:
(a) When an organization’s survival is threatened and it is not competing effectively, retrenchment strate- gies are often needed.
(b) Turnaround strategy is used when an organization is performing well but has not yet reached a critical stage.
(c) Divestment strategy involves selling the business or setting it up as a separate corporation.
(d) Liquidation strategy involves closure of business which is no longer profitable.
Codes:
(1) Only (a), (b) and (c) are correct.
(2) Only (b), (c) and (d) are correct.
(3) Only (a), (c) and (d) are correct.
(4) Only (a) and (d) are correct.
Answer: (3)
38. Statement – I: Most businesses start off as “Question Marks”, in that they enter a highgrowth market in which there is already a market leader.
Statement – II: A “Star” is the market leader in a high-growth market, but it does not necessarily pro- vide much cash.
(1) Statement – I is correct but Statement – II is incorrect.
(2) Statement – II is correct but Statement – I is incorrect.
(3) Both the Statements are incorrect.
(4) Both the Statements are correct.
Answer: (4)
39. Match the items of List – I with List – II and iden- tify the code of correct matching:
List – I
a. Consistent actions one time
b. It reflects the decision of the firm to offer particular products
or services in particular markets.
c. A manoeuvre intended to outwit competitor
d. A view of what the organization is to become
Codes: abcd
(1) iv iii i ii
(2) iv i ii iii
(3) iv iii ii i
(4) iii iv ii i
Answer: (3)
List – II
ii. A ploy
iii. A position
iv. A pattern
40. Apple computers uses a differentiation competi- tive strategy that emphasizes innovative product with creative design. This is an example of
(1) Functional strategy
(2) Business strategy
(3) Operating strategy
(4) Product strategy
Answer: (2)
41. Match the items of List – I with the items of List – II and select the code of correcting matching:
List – I List – II
a. Richard Cantillon i. Entrepreneur must accept the challenge and should be willing hard to achieve
something
b. Joseph A. Schumpeter ii. Entrepreneurs are all those persons who are engaged in economic activ-
ity.
c. J.K. Golbraith iii. Entrepreneur is a person who introduces innovation and
Codes: abc
(1)iii i ii
(2) i iii ii
(3) ii iii i
(4)ii i iii
Answer: (3)
42. Total Quality Management, job redesigning, new techniques of doing things and management by consensus are the examples of which one of the following?
(1) Opportunistic entrepreneurship
(2) Administrative entrepreneurship
(3) Incubative entrepreneurship
(4) Mass entrepreneurship
Answer: (2)
43. Under technology and quality upgradation sup- port to help manufacturing MSMEs buy energy efficient technologies for production, what per- centage of the actual expenditure is provided as financial support by the Government of India?
(1) 75%
(2) 60%
(3) 50%
(4) 25%
Answer: (2)
44. Which one of the following is not a personal char- acteristic of an entrepreneur?
(1) Innovative
(2) Hardworking
(3) Practical
(4) Submissive
Answer: (4)
45. Which one of the following is the most insignifi- cant reason for sickness in SSI sector?
(1) Power shortage
(2) Lack of demand
(3) Management problems
(4) Equipment problems
Answer: (3)
46. Statement – I: Ethical principles tend to be broader than legal principles.
Statement – II: Laws and ethics are closely related.
Codes:
(1) Statement – I is correct but Statement – II is incorrect.
(2) Statement – II is correct but Statement – I is incorrect.
(3) Both the Statements are correct.
(4) Both the Statements are incorrect.
Answer: (3)
47. Assertion (A): The state shall endeavour to protect and improve the environment and to safeguard the forest and wildlife of the country.
Reasoning (R): The Directive principles of state pol- icy of the Indian Constitution Command the State to ensure protection and improvement of environment and to safeguard forest and wildlife.
Codes:
(1) (A) is correct but (R) is not correct. (2) (R) is correct but (A) is not correct.
(3) Both (A) and (R) are correct and (R) is the right explanation of (A).
(4) Both (A) and (R) are correct but (R) is not the right explanation of (A).
Answer: (3)
48. Match the items of List – I with List – II and iden- tify the code of correct matching:
List – I (CSR Models)
a. Ethical Model
b. Statist Model
c. Liberal Model
d. Stakeholder Model
List – II (Emphasis)
i. Corporate responsibili- ties limited to private own- ers.
ii. Voluntary commitment by companies to public welfare
iii. State ownership and legal requirements deter- mine corporate responsi- bilities.
iv. Companies respond to the need of customers, communities, etc
Codes: abcd
(1) ii iii i iv
(2) ii i iii iv
(3) ii i iv iii
(4) i iii ii iv
Answer: (1)
49. Which one among the following is not correct about J. J. Irani Committee’s recommendations on Company Law (2005):
(1) 2/5th of the board of a listed company should comprise of independent directors.
(2) Introduce the concept of One Person Company (OPC).
(3) Allow corporations to self-regulate their affairs.
(4) Disclose proper and accurate compilation of financial information of a corporation.
Answer: (1)
50. A business should act ethically for which of the following reasons?
(a) To prevent harm to the general public (b) To meet stake-holder expectations
(c) To protect their own employees
(d) To maximize profit of the business Codes:
(1) (a), (b) and (c) only
(2) (b), (c) and (d) only
(3) (a), (c) and (d) only
(4) (a) and (d) only
Answer: (1)
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