Managerial Economics - 27

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Managerial Economics



True/False
Question When a firm's average revenue (A.R) is less than its average
cost, it earns only normal profit.
Correct Answer False
Your Answer True


Multiple Choice Single Answer
Question The indivisible goods whose benefits cannot be priced are
called
Correct Answer Pure public goods
Your Answer Pure public goods


True/False
Question The opportunity cost of a product is the opportunity gained
of being able to produce some other product.
Correct Answer False
Your Answer True


Select The Blank
Question The indivisible goods to which the principle exclusion does
not apply are called ________ goods.
Correct Answer pure public
Your Answer private


True/False
Question Giffen goods are superior goods.
Correct Answer False
Your Answer False


Multiple Choice Multiple Answer
Question Defects of market system:
Correct Answer Inequalities of income and wealth , Emergence of
monopolies , Failure to provide full employment
Your Answer Inequalities of income and wealth , Emergence of monopolies


Multiple Choice Single Answer
Question The number of sellers operating under monopolistic
competition as compare to oligopoly is
Correct Answer larger
Your Answer smaller


True/False
Question The distinction between fixed costs and variable costs is
relevant in the short period only.
Correct Answer True
Your Answer True


Multiple Choice Multiple Answer
Question The promoters of a company can get incorporated by filing
with the registrarof companies various documents such as
Correct Answer Memorandum of Association , Articles of Association
, Prospectus
Your Answer Memorandum of Association , Articles of Association ,
Prospectus


Multiple Choice Single Answer
Question The General Theory of Employment, Interest and Money in 1936
was published by
Correct Answer J.M. Keynes
Your Answer J.M. Keynes


Select The Blank
Question Modern economists treat social cost and benefits as ________
of private investment and production decisions.
Correct Answer externalities
Your Answer advantages


Multiple Choice Single Answer
Question The Risk Taking Theory was developed by Hawley, who was an
Correct Answer American Economist
Your Answer American Economist


Match The Following
Question Correct Answer Your Answer

Motor cars Tangible goods Alternative uses

Wants Insatiable Prescriptive in nature

Managerial Economics Prescriptive in nature Tangible goods

Resources Alternative uses The theory of distribution

Division of society's output of goods and services The theory of
distribution Insatiable

Multiple Choice Single Answer
Question When input and output increase in the same proportion, the
phase of returns are
Correct Answer constant
Your Answer increasing


True/False
Question Demand and desire are one and the same.
Correct Answer False
Your Answer False


True/False
Question The demand curve has a negative slope.
Correct Answer True
Your Answer False


Select The Blank
Question "Homeostatic Approach" as an alternative objective of firms
was suggested by ________.
Correct Answer Prof. Kenneth Boulding
Your Answer Prof. Kenneth Boulding


True/False
Question Price is the, only determinant of demand
Correct Answer False
Your Answer False


Select The Blank
Question Output rises in a lesser proportion to that of the increase
in input, under the case of ________.
Correct Answer decreasing returns to scale
Your Answer decreasing returns to scale


Multiple Choice Single Answer
Question Besides private sector, the other type of business
organization is
Correct Answer joint sector
Your Answer co-operative organizations


Multiple Choice Single Answer
Question Jevons' , the economists who defined the term 'market'
different from that of the traditional sense is an
Correct Answer English economists
Your Answer English economists


Multiple Choice Single Answer
Question If a person is habituated to the consumption of a commodity
and if he cannot easily give up its use, demand for it is generally
Correct Answer inelastic
Your Answer unitary elastic


Multiple Choice Multiple Answer
Question Features of an Industry are
Correct Answer All firms dealing in the same line of business , The
ownership and management of each firm is different , Is a group of firms
Your Answer All firms produce different goods , All firms dealing in the
same line of business


True/False
Question Measurement of profit becomes difficult because of the
difficulty involved in the calculation of depreciation.
Correct Answer True
Your Answer True


Multiple Choice Multiple Answer
Question Conditions of Price Discrimination are:
Correct Answer The two markets in which the product is sold should
be kept separate , The elasticity of demand in different markets should be
different , Market must be imperfect
Your Answer The elasticity of demand in different markets should be
different , Market must be imperfect


Match The Following
Question Correct Answer Your Answer

Depression Unemployment Increases purchasing power

Moral suasion Persuasive method Low purchasing power

Bank rate Quantitative credit control measure Persuasive method

Inflation Low purchasing power Unemployment

Multiple Choice Multiple Answer
Question Features of Pure Competition are
Correct Answer Large number of buyers and sellers , Homogeneous
products , Free entry and free exit of firms
Your Answer Transportation cost , Large number of buyers and sellers ,
Homogeneous products


Multiple Choice Single Answer
Question According to Prof. F.H. Knight, profit is a reward for
Correct Answer uncertainty bearing
Your Answer innovation


Select The Blank
Question The out of pocket costs are ________.
Correct Answer Explicit costs
Your Answer Explicit costs


Select The Blank
Question On the ________ level, the summation of maximum individual
welfare does not automatically lead to maximum social welfare.
Correct Answer macro
Your Answer micro


Multiple Choice Multiple Answer
Question Internal Economies involves
Correct Answer Advantages of large-scale production , Low cost of
production , It avails benefits of cheaper finance
Your Answer Advantages of large-scale production , Low cost of
production , It avails benefits of cheaper finance


Multiple Choice Multiple Answer
Question We say that a nation faces economic problems , under
following conditions
Correct Answer Man has unlimited wants or ends , The means or
resources to satisfy them are limited , These resources are not specific but
have alternative uses
Your Answer Man has unlimited wants or ends , The means or resources to
satisfy them are limited


Select The Blank
Question In the 3rd stage of operation of the law of variable
proportions, the marginal product becomes ________.
Correct Answer negative
Your Answer zero


Multiple Choice Multiple Answer
Question Main aims of the New Industrial Policy (1991) are
Correct Answer To unshackle the indian industrial economy from the
cobwebs of unnecessary bureaucratic control , To introduce liberalization
with a view to integrate the indian economy with the world economy , To
remove restrictions on direct foreign investment as also to free the
domestic entrepreneur from the restriction of MRTP act
Your Answer To unshackle the indian industrial economy from the cobwebs
of unnecessary bureaucratic control , To introduce liberalization with a
view to integrate the indian economy with the world economy


Multiple Choice Single Answer
Question The relation between variable input and ouput
Correct Answer is direct
Your Answer is direct


Multiple Choice Multiple Answer
Question Government intervention is needed in free market mechanism
to
Correct Answer To provide employment to all who willing to work at
prevailing wage rate , Factors of production are optimally allocated between
the various industries , All will get sufficient income to meet their basic
needs
Your Answer To provide employment to all who willing to work at
prevailing wage rate , Factors of production are optimally allocated between
the various industries


Select The Blank
Question The index numbers which measure the changes in the general
price level of a country refers to ________
Correct Answer Wholesale prices index
Your Answer Customer price indices


True/False
Question The rise in prices is basically because of shortages of
basic goods & services and a rapid growth of money supply.
Correct Answer True
Your Answer True


Multiple Choice Multiple Answer
Question The sole proprietorship type of organization is found in
Correct Answer Agriculture, , Retail trade, , Hotel,
Your Answer Agriculture, , Retail trade,


Multiple Choice Multiple Answer
Question According to Keynes there are three motives for holding cash
for liquidity preference
Correct Answer the transactions motive , the precautionary motive ,
the speculative motive
Your Answer the transactions motive , the precautionary motive , the
speculative motive


Select The Blank
Question Cost-benefit analysis refers to the analysis undertaken to
judge any projects ________ whether government or private and find out its
worth.
Correct Answer investments
Your Answer profits


Multiple Choice Single Answer
Question In the law of variable proportion, a stage is reached when
marginal product is
Correct Answer zero
Your Answer zero


True/False
Question Profit should be large enough for a plough - back for
business expansion.
Correct Answer True
Your Answer True


Multiple Choice Multiple Answer
Question Average propensity to consume is characterized as follows
Correct Answer the ratio of consumption expenditure to any
particular level of income , It is found by dividing consumption expenditure
by income , It is expressed as the percentage of income consumed
Your Answer the ratio of consumption expenditure to any particular level
of income , It is found by dividing consumption expenditure by income


Multiple Choice Single Answer
Question Market mechanism is characterized by
Correct Answer instability
Your Answer stability


Select The Blank
Question Supply is predominantly determined by ________.
Correct Answer stock
Your Answer demand


Select The Blank
Question The externality which causes an economic gain or an economic
loss to other economic units is also referred to as ________ externality.
Correct Answer Pecuniary
Your Answer Financial

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Posted in: Managerial Economics (Set IX)

Managerial Economics - 26

LIST OF ATTEMPTED QUESTIONS AND ANSWERS


Multiple Choice Single Answer
Question In cost - benefit analysis, after the step of appraisal and selection of the project is the step of
Correct Answer comparison of the cash flow
Your Answer comparison of the cash flow


Select The Blank
Question In the context of formulating an investment project, ________ feasibility means the availability of supervisors for implementing and running the project smoothly and professionally.
Correct Answer management
Your Answer management


True/False
Question The externalities that may be an economic gain or economic losses to other economic units are referred to as technological externalities.
Correct Answer False
Your Answer False


Select The Blank
Question The minimum number of directors which private limited should have is ________.
Correct Answer 2
Your Answer 3


Multiple Choice Multiple Answer
Question Co-operative organizations is
Correct Answer voluntary organization , managed by democratic principle , organization, which performs its business within the members
Your Answer voluntary organization , managed by democratic principle , organization, which performs its business within the members


Multiple Choice Multiple Answer
Question Main aims of the New Industrial Policy (1991) are
Correct Answer To unshackle the indian industrial economy from the cobwebs of unnecessary bureaucratic control , To introduce liberalization with a view to integrate the indian economy with the world economy , To remove restrictions on direct foreign investment as also to free the domestic entrepreneur from the restriction of MRTP act
Your Answer To unshackle the indian industrial economy from the cobwebs of unnecessary bureaucratic control , To introduce liberalization with a view to integrate the indian economy with the world economy , To remove restrictions on direct foreign investment as also to free the domestic entrepreneur from the restriction of MRTP act


Multiple Choice Multiple Answer
Question Quantitative credit control measures are
Correct Answer open market operations , changes in bank rates , changes in statutory reserve ratio
Your Answer open market operations , changes in bank rates , changes in statutory reserve ratio


Multiple Choice Single Answer
Question The principle of full employment equilibrium was stated by
Correct Answer Say's Law of Market
Your Answer Say's Law of Market


Select The Blank
Question Increase in consumer's income leads in the demand for inferior goods to ________
Correct Answer decrease
Your Answer decrease


True/False
Question The congress government led by Narsimha Rao announced the New Industrial Policy in July 1991.
Correct Answer True
Your Answer True


Select The Blank
Question The index numbers which measure the changes in the general price level of a country refers to ________
Correct Answer Wholesale prices index
Your Answer Wholesale prices index


Multiple Choice Single Answer
Question Peas & beas, groundnut oil & til oil, tea & coffee are examples of
Correct Answer substitutes goods
Your Answer substitutes goods


Multiple Choice Multiple Answer
Question Exceptions to the Law of Demand are
Correct Answer Giffen goods , Articles of snob appeal , Speculation
Your Answer Giffen goods , Articles of snob appeal , Speculation


Multiple Choice Single Answer
Question Variable cost are those costs which vary with the level of
Correct Answer output
Your Answer output


Multiple Choice Single Answer
Question Costs which increase because of the expansion of a firm are called
Correct Answer incremental
Your Answer incremental


Multiple Choice Single Answer
Question Managerial economics is also understood to refer to
Correct Answer applied economics
Your Answer applied economics


Multiple Choice Single Answer
Question The suggestion of reasonable profit target as an alternative to the objective of profit maximization is by
Correct Answer Joel Dean
Your Answer Joel Dean


Multiple Choice Multiple Answer
Question Different types of business organizations are
Correct Answer private sector , public sector , joint sector
Your Answer public sector , joint sector , private sector


Select The Blank
Question Defence service is an example of ________ good.
Correct Answer indivisible
Your Answer indivisible


Multiple Choice Multiple Answer
Question The advantage of cost-benefit analysis are
Correct Answer Maximization of social welfare , Objective measurement of the trade-off , Maximization of difference between total benefits & total costs
Your Answer Maximization of social welfare , Objective measurement of the trade-off , Maximization of difference between total benefits & total costs


Multiple Choice Single Answer
Question The income which a businessman might expect from the second best alternative use of his resources is called as
Correct Answer opportunity cost
Your Answer opportunity cost


Match The Following
Question Correct Answer Your Answer

Motor cars Tangible goods Tangible goods

Wants Insatiable Insatiable

Managerial Economics Prescriptive in nature Prescriptive in nature

Resources Alternative uses Alternative uses

Division of society's output of goods and services The theory of distribution The theory of distribution

Multiple Choice Single Answer
Question The type economic problem is
Correct Answer universal
Your Answer universal


True/False
Question The defence services are indivisible in the sense that they cannot be priced in the market in order to deprive some members of the society from its use or benefits.
Correct Answer True
Your Answer True


Select The Blank
Question The good becomes ________ so far as its use is concerned only when it is priced in the market and the principle of exclusion is applied to it.
Correct Answer divisible
Your Answer divisible


Select The Blank
Question Output rises in a lesser proportion to that of the increase in input, under the case of ________.
Correct Answer decreasing returns to scale
Your Answer decreasing returns to scale


True/False
Question The law of supply is not hypothetical.
Correct Answer False
Your Answer False


True/False
Question In a free-enterprise economy, the problems of what how and for whom are solved by a planning committee
Correct Answer False
Your Answer False


Multiple Choice Single Answer
Question Dalal Street in Bombay is known as
Correct Answer Bombay Stock Exchange
Your Answer Bombay Stock Exchange


True/False
Question Accounting profit takes in to account opportunity cost.
Correct Answer False
Your Answer False


Multiple Choice Multiple Answer
Question Types of Share capital of Joint-Stock Company are
Correct Answer registered or authorized capital , issued capital , paid-up capital
Your Answer registered or authorized capital , issued capital , paid-up capital


True/False
Question A Joint Stock Company is managed by the Board of Directors elected by shareholders.
Correct Answer True
Your Answer True


True/False
Question A plant is an economic unit which takes various decisions related to production and distribution.
Correct Answer False
Your Answer False


Multiple Choice Single Answer
Question Every nation's resources which are used to produce the quantities of goods and services that would be required to satisfy all its citizen's wants are
Correct Answer insufficient
Your Answer insufficient


Multiple Choice Single Answer
Question A firm gets an opportunity to produce multiple products because changes in business activity in a firms is
Correct Answer cyclical
Your Answer cyclical


Multiple Choice Multiple Answer
Question Major types of costs are
Correct Answer Accounting costs , Economic costs , Opportunity costs
Your Answer Accounting costs , Economic costs , Opportunity costs


Multiple Choice Single Answer
Question Managerial economics generally refers to the integration of economic theory with business
Correct Answer Practice
Your Answer Practice


Select The Blank
Question The liability of a Karta in a Joint Hindu Family Business firm is ________.
Correct Answer limited
Your Answer limited


Multiple Choice Multiple Answer
Question The production function studies
Correct Answer Input and out put relation , Factors of production and final production , Technology used in production
Your Answer Input and out put relation , Factors of production and final production , Technology used in production


Select The Blank
Question An upward sloping demand curve is called ________
Correct Answer exceptional demand curve
Your Answer exceptional demand curve


Select The Blank
Question Economists like A.C.Harberger have shown that the cost benefit analysis can be applied to ________ analysis.
Correct Answer general equilibrium
Your Answer general equilibrium


Select The Blank
Question The necessary condition of profit maximization of a firm is that Marginal Revenue (M.R) must be equal to ________.
Correct Answer Marginal cost (M.C)
Your Answer Marginal cost (M.C)


Multiple Choice Multiple Answer
Question Managerial economics deals with
Correct Answer Integration of economic theory with business practice , Using logic of economics, mathematics & statistics , The use of economic modes of thought to analyze business solution
Your Answer Integration of economic theory with business practice , Using logic of economics, mathematics & statistics , The use of economic modes of thought to analyze business solution


Match The Following
Question Correct Answer Your Answer

Implicit costs are the cost of resources owned by the firm. of resources owned by the firm.

Opportunity costs are also known as alternative costs alternative costs

The difference between average total cost &average fixed cost shows variable cost variable cost

The difference between average cost and average revenue is average profit average profit

Multiple Choice Single Answer
Question In a market economy, a firm in the private sector basically aims at maximization of
Correct Answer money profits
Your Answer money profits


Multiple Choice Single Answer
Question Under pure competition, the entry & exit of firms is
Correct Answer free
Your Answer free


True/False
Question A supply schedule is a graphical presentation of supply patterns.
Correct Answer False
Your Answer False

Read more »

Posted in: Managerial Economics (Set IX)