1. The demand curve for a product will shift outwards to the right when:
(a) The price of a substitute good rise
(b) Consumer income fall
(c ) Consumer expect the price of the good fall in the future.
(d) The price of the product itself fall
Ans:a
2. If the demand for good is relatively price inelastic and its price rises, the revenue will:
(a) Fall
(b) Remain constant
(c) Rise
(d) Depends on how supply responds
Ans:c
3. The coefficient of correlation according to Karl Pearson is always:
(A) ±1
(B) –1
(C) +1
(D) 0
Answer:-a
4. Input output analysis was developed by
(A) Walras
(B) Samuelson
(C) Heckscher – ohlin
(D) W.W heontiff
Answer:-D
5. Cartel system –
a) Leads to a monopoly situation,
b) is a kind of pure oligopoly,
c) It is banned in the US,
d) all of the above.
Ans:d
6. Productivity is measured by:
(a)The growth on Output of a firm
(b) The growth on Profit of a firm
(c ) Total output/Total input
(d) Total amount of investments in capital goods
Ans:c
7. The main objectives of macroeconomic policy is:
(a) A high and stable level of employment
(b) A low and stable rate of inflation
(c ) A stable and satisfactory rate of economic growth
(d) All of the above
Ans:d
8. Who was first argued that the purpose of business was to make profit?
(a) Milton fried man
(b) Margarathcher
(c ) Elaine stembnerg
(d) John Crane
Ans:a
9. What does the PPP or P3 initiative refer to?
(a) Public policy papers
(b) Public Private Partnership
(c ) Private Procurement Production
(d) Personal Production Proposal
Ans:b
10. What does the PFI initiative refer to ?
(a) Private Finance Initiative
(b) Private Fiscal Initiative
(c ) Public Financial Initiative
(d ) Private Foundation Investment.
Ans:a
11. The term ‘late industrialization’ refers to:
(a) The need to delay industrialization because of its threats to the environment
(b) The problem faced by many developing countries as they seek to catch up to the Levels of development of richer countries
(c ) The belief that it is too late for many countries to industrialize.
(d ) That we are how entering a post industrialized world.
Ans:c
12. According to Keynes consumption is a function of
(A) Investment
(B) Capital
(C) Saving
(D) Income
Answer:-d
13. Under perfect competition in the long run –
a) All firms earn normal profits,
b) Few firms earn super normal profits,
c) All firms are at break even,
d) None of the above.
Ans:a
14. National income at market prices is equal to –
a) gross national product a market price,
b) gross domestic product at market prices,
c) net national product at factor cost,
d) none of the above.
Ans:c
15. If there is a single buyer, it is called –
a) Monopoly,
b) Oligopoly,
c) Monopsony,
d) none of these.
Ans:c
16. A firm is having increasing returns to scale means –
a) it is having increasing costs,
b) it is having constant costs,
c) it is having decreasing costs,
d) none of the above.
Ans:c
17. Production can be measured in terms of which of the following?
a) Total productivity,
b) Marginal productivity,
c) Average productivity,
d) all of these.
Ans:d
18. Which is not covered under the scope of Managerial Economics?
a) Profit Management,
b) Accounting Theory,
c) Pricing Policies,
d) Production Analysis.
Ans:b
19. Demand analysis includes –
(a) demand forecasting,
(b) demand elasticity study,
(c) indifference curve analysis,
(d) all of the above.
Ans:d
20. Law of Demand implies –
a) Qualitative relationship between demand and supply,
b) Qualitative relationship between price and demand,
c) Quantitative relationship between price and demand,
d) Quantitative relationship between demand and supply.
Ans:b
21. Which one of these is an exception to the law of demand?
a) Demonstration effect goods,
b) Giffen’s Goods,
c) Future scarcity of goods,
d) all of the above
Ans:d
22. Elasticity of demand is based on which of the following factors?
a) Range of substitutes available,
b) Joint demand,
c) Proportion of income spent on the commodity,
d) All of the above.
Ans:d
23. Which one of the following is not the function of a managerial economist?
a) Industrial market research,
b) Determining rate of interest in money market,
c) Capital budgeting,
d) Investment analysis.
Ans:b
24. Which one is not a type of demand?
a)Price demand,
b) Derived demand,
c) Supply demand,
d) Joint demand.
Ans c
25. Which is not the type of elasticity of demand?
a) Price elasticity,
b) Income elasticity,
c) Supply elasticity,
d) Advertising elasticity.
Ans:c
26. Who introduced the concept of elasticity of demand?
a) Boulding,
b) Robinson,
c) Marshall,
d) Joel Dean.
Ans:c
27. Isocost line is also called as:
a) Profit line,
b) Production line,
c) Budget line,
d) Return line.
Ans:c
28. In case of Giffen’s goods, price effect is –
a) negative,
b) zero,
c) positive,
d) proportionate.
Ans:a
29. If the demand curve is a rectangular hyperbola, elasticity is –
a) 1,
b) 0,
c) 2,
d) less than 1.
Ans:a
30. A firm maximizes its profit when –
a) MC > MR,
b) MC < MR,
c) MC = MR,
d) MR = AP.
Ans:c
31. The falling part of a total utility curve shows –
a) Zero marginal utility,
b) Decreasing marginal utility,
c) Increasing marginal utility,
d) Negative marginal utility.
Ans:d
32. At the shut-down point –
a) Total losses of the firm equals TFC,
b) TR = TVC,
c) P = AVC,
d) all of the above.
Ans:d
33. All money costs can be regarded as –
a) Social costs,
b) Implicit costs,
c) Explicit costs,
d) Real costs.
Ans:c
34. Statement “Price is the amount of money and / or other item with utility needed to acquire a product” is given by –
a) Stanton,
b) Clark,
c) J. S. Bain,
d) J Robinson.
Ans:a
35. The goods whose demand is not tied with the demand for some other goods are said to have –
a) Independent demand,
b) Free demand,
c) Autonomous demand,
d) Individual demand.
Ans:c
36. Movement along a demand curve as a result of change in price is known as –
a) change in quantity demanded,
b) Change in demand,
c) Increase or decrease in demand,
d) None of the above.
Ans:a
37. Under perfect competition, the long-run equilibrium of the firm is established at –
a) Minimum point of LAC,
b) Highest point of LAC,
c) Minimum point of SAC,
d) Highest point of SAC.
Ans:a
38. Conditions of firm’s equilibrium under perfect competition in short runis/are–
a) MC = MR,
b) slope of MC > slope of MR,
c) MR = Price,
d) all of the above.
Ans:d
39. Economics of scale means –
a) Reductions in unit cost of production,
b) Reductions in total cost of production, c) Reductions in unit cost of distribution, d) Addition to the unit cost of production. Ans:a
40. . In case of inferior goods, the income effect is
(A) Positive
(B) Negative
(C) Zero
(D) Infinite
Ans:-b
41. When price elasticity of demand is unity, the total expenditure –
a) increases with rise in price,
b) decreases with fall in price,
c) increases with fall in price,
d) has no affect of price change.
Ans:d
42. Concept of ‘Consumer’s Surplus’ was evolved by –
a) Dr. Alfred Marshall,
b) J M Keynes,
c) Adam Smith,
d) E Boulding.
Ans:a
43. A high value of cross-elasticity indicates that the two commodities are –
a) Very close substitutes,
b) Very close complements,
c) Poor substitutes,
d) Poor complements.
Ans:a
44. GNP can be calculated as –
a) GDP – Depreciation,
b) GDP + Net factor income from abroad,
c) GDP – Depreciation + Subsidies,
d) Wages + Interest + Rent.
Ans:b
45. Income method for measuring GNP considers –
a) Wages and salaries,
b) Interest,
c) Rents,
d) all of these.
Ans:d
46. Economists who developed the Indifference Curve Analysis are –
a) Hicks and Allen,
b) Hicks and Marshall,
c) Samuelson and Robinson,
d) Hicks and Robinson.
Ans:a
47. The law of demand is a –
a) Indicative statement,
b) Qualitative statement,
c) Illustrative statement,
d) Selective statement.
Ans:b
48. Professor J Robinson measured monopoly power in terms of –
a) Elasticity,
b) Marginal revenue and price,
c) Marginal cost and price,
d) Price and average cost
Ans:a
49. In which market structure, a firm has no control over price of it’s product?
a) Monopoly,
b) Perfect competition,
c) Oligopoly,
d) Monopolistic competition.
Ans:b
50. LAC curve is –
a) U shaped and less pronounced,
b) U shaped and more pronounced,
c) U shaped only,
d) Intersecting SAC curve.
Ans:a
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