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Question Bank

A. Joel Dean

1. The
purpose
of
managerial
economics shows how economic
analysis can be used in formulating
business policies.
B. Edwin
2. Managerial economics attempts to
bridge the gap between purely
analytical
problems
and
the
problems
of
policies
that
management must face.
C. Milton and 3. Managerial economics consists of
Siegelman
the use of economic models of
thought to analyse business
situations.
D. Malcolm E
4. Managerial
economics
is
the
Mc Nair and
integration of economic theory with
Richard
business practices for the purpose of
facilitating decision making and
forward planning by management.

Codes
A B C D
(a) 1 2 3 4
(c) 1 2 4 3

(a) directly with price


(b) proportionately with price
(c) inversely with price
(d) independent of price

8. Market demand for any good is a function of the


(a) price per unit of goods (b) price of other goods
(c) income and tastes of consumers
(d) All of the above

9. Match the following :


List I
(Elasticities of demand)
A. Perfectly elastic
C. Unitary elastic

List II
(Curves)

1. Y

A B C D
(b) 4 3 2 1
(d) 1 4 2 3

2. Which is not covered under the scope of


Managerial Economics?

3. Pricing decision includes

(a) demand forecasting


(b) demand elasticity study
(c) indifference curve analysis
(d) All of the above

Quantity

Quantity

4. Y

Quantity

Codes
A B C D
(a) 1 2 3 4
(c) 1 4 3 2

A B C D
(b) 3 1 4 2
(d) 2 1 4 3

10. The statement, The elasticity of demand may be


defined as the percentage change in quantity
demanded which would result from 1 per cent
change in price, is given by

Price
O

(b) pricing policies


(d) All of the above

4. Demand analysis includes

5.

Quantity

3. Y

(b) Accounting Theory


(d) Production Analysis

(a) price system


(c) product-line pricing

2. Y

Price

(a) Profit Management


(c) Pricing Policies

B. Perfectly inelastic
D. Relatively inelastic

Price

List II
(Statement)

Price

List I
(Economist)

7. In a typical demand schedule, quantity demanded


varies

Price

1. Match the following

Quantity

The above curve is a


(a) price curve
(b) demand curve
(c) indifference curve
(d) production possibility curve

6. 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

(a) Boulding
(c) Joan Robinson

(b) Cairncross
(d) Marshall

11. Which one of these is an exception to the law of


demand?
(a) Demonstration effect goods
(b) Giffens goods
(c) Future scarcity of goods
(d) All of the above

12. Elasticity of demand is based on which of the


following factors?
(a)
(b)
(c)
(d)

Range of substitutes available


Joint demand
Proportion of income spent on the commodity
All of the above

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UGC-NET Tutor Management


13. Cost and product analysis consist of
(a) Cost concept
(b) Linear programming
(c) Production function
(d) All of the above

Industrial market research


Determing rate of interest in money market
Capital budgeting
Investment analysis

15. Which of the following is/are the causes of


demand curves moving downwards to the right?
(a) Law of diminishing marginal utility
(b) Income effect
(c) Veblen effect
(d) Both a and b

16. A table indicating various levels of demand at


various prices is termed as
(a) demand chart
(c) demand table

(b) demand schedule


(d) price table

17. Which one of the following is not a determinant of


demand?
(a) Government policy
(b) Impact of advertisement
(c) Climatic conditions
(d) None of the above

18. Which one is not a type of demand?


(a) Price demand
(c) Supply demand

(b) Derived demand


(d) Joint demand

19. Elasticity of demand measures the


(a) responsiveness of sales to change in advertisement
expenditure
(b) responsiveness of demand to change in supply of
goods
(c) change in price due to change in demand
(d) change in demand due to change in tastes of
consumer

20. Match the following


List I
(Economist)
A. Robinson

B. Boulding

C. Cairn cross

D. Marshall

A B C D
(b) 1 2 4 3
(d) 1 2 3 4

21. Which is not the type of elasticity of demand?

14. Which one of the following is not the function of a


managerial economist?
(a)
(b)
(c)
(d)

Codes
A B C D
(a) 1 3 4 2
(c) 1 3 2 4

List II
(Statement)
1. The elasticity of demand at any price
or at any output is the proportional
change of amount purchased in
response to a small change in price
divided by the proportional change in
price.
2. The elasticity of demand may be
defined as the percentage change in
quantity demanded which would
result from 1% change in price.
3. The elasticity of demand for a
commodity is the rate at which the
quantity bought changes as the price
changes.
4. The elasticity for demand in a market
is great or small according as the
amount of demand increases much or
little for a given fall in price, and
diminishes much or little for a given
rise in price.

(a) Price elasticity


(c) Supply elasticity

(b) Income elasticity


(d) Advertising elasticity

22. Income elasticity is computed by the formula


(a) ei =

(c) ei =
(d) ei =

Q1 Q2
P1
Q2 Q1
Q1
Y1 Q1

(b) ei =

Y1
100
Y2 Y1

Q2 Q1
Q1
Y2 Y1
Y1

Y2 Q2

23. Which one is the technique


elasticity of demand?
(a) Total outlay method
(c) Point method

of

measuring

(b) Arc method


(d) All of these

24. The formula for calculating arc elasticity is


Q1 Q2 P1 P2

Q1 + Q2 P1 + P2
Q Q2 Q1 Q2
(c) ea = 1

P1 P2 P1 + P2
(a) ea =

(b) ea =

Q1 + Q2
Q1 Q2

P1 + P2
P1 P2

(d) None of these

25. The price of ` 20 has a demand of 500 units. If the


price falls to ` 15 and the quantity demanded
increases to 600 units, calculate the arc of
elasticity.
(a) 1.2
(c) 1.5

(b) 0.63
(d) 1.65

26. In case of perfectly elastic demand, the numerical


measure of elasticity is
(a) one
(c) infinity

(b) greater than one


(d) less than one

27. A movement along a demand curve indicates that


a different quantity is being demanded. This
movement is due to
(a) change in income
(b) change in taste
(c) change in price
(d) change in price of substitute

28. Increase in demand due to decrease in price of


that commodity is termed as
(a) increment in demand
(c) extension of demand

(b) increase in demand


(d) change of demand

29. When the economist speaks of an increase in


demand, he is usually referring to a
(a)
(b)
(c)
(d)

shift in demand curve to right


movement along demand curve downwards right
shift in demand curve to left
movement along demand curve upwards

30. Who introduced the concept of elasticity of


demand?
(a) Boulding
(c) Marshall

(b) Robinson
(d) Joel Dean

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Managerial Economics
31. The curve shown below represents production
possibility curve. This curve is concave to origin
because of
Product Y

(a) GNP at factor cost = GNP at MP Indirect taxes +


subsidies
(b) GNP at market price = GDP + Cost of capital
(c) GNP = Capital + Assets Depreciation
(d) GNP = Wages + Dividends

C
Product X

(a) increasing marginal rate of transformation between


products X and Y
(b) decreasing marginal rate of transformation
(c) constant marginal rate of transformation
(d) None of the above
(b) Production line
(d) Return line

33. Quadratic cost function is written as


(a) TC = a + bQ
(c) TC = a + bQ + CQ

(b) TC = a + bQ + CQ 2
(d) TC = a + bQ + C

34. A rightward shift in supply curve indicates


(a) decrease in supply
(b) increase in quantity demanded
(c) increase in supply
(d) law of variable proportion
(a) producers cooperative (b) cartel
(c) producers trust
(d) marketing board

36. In case of Giffens goods, price effect is


(b) zero
(d) proportionate

37. If the demand curve is a rectangular hyperbola,


elasticity is
(a) 1

(b) 0

(c)

(d) less than 1

38. The positive cross elasticity of demand between


two products means the two products are
(a) substitutes
(c) complementary

(b) not related


(d) None of these

39. Market with one buyer and one seller is called


(a) Monopoly
(c) Duopoly

(a) product information


(b) market information
(c) information at micro level
(d) All of the above
(a) Benefit
(c) Productivity

(b) Monopsony
(d) Bilateral monopoly

46. When AR is constant, MR is


(a) less than AR
(c) more than AR

(a) Indifference curve analysis


(b) utility theory
(c) revealed preference theory
(d) consumption analysis

(a) zero marginal utility


(b) decreasing marginal utility
(c) increasing marginal utility
(d) negative marginal utility
(a) total losses of the firm equals TFC
(b) TR = TVC
(c) P = AVC
(d) All of the above

49. The emphasis of managerial economics is on


(a) Bonus theory
(c) System theory

50. Value of a firm can be defined as


(a)
(b)
(c)
(d)

PV
PV
FV
FV

(b) MC < MR
(d) MR = AP

42. Match the following :

Says Law of market


Keynes Psychological Law
Paradox of thrift
Marshall theory

List II
(Relation)
1.
2.
3.
4.

of
of
of
of

the firms expected future cash flows


its capital
the firms capital
the firms cash flows

51. Calculate the advertising elasticity of sales if A


denotes advertising expenditure and S denotes
sales
(a) 1

List I
(Theory)

(b) Normative theory


(d) Positive theory

S1 = ` 40000 A1 = ` 200
S1 = ` 50000 A1 = ` 190
(b) 5
(c) 2.5
(d) 3

52. Which one is not the field


economics?

41. A firm maximizes its profit when

A.
B.
C.
D.

(b) equals to AR
(d) zero

47. The falling part of a total utility curve shows

40. Cardinal utility measurement is required in

(a) MC > MR
(c) MC = MR

(b) Surplus
(d) None of these

48. At the shut-down point

35. OPEC is an example of

(a) negative
(c) positive

44. Information for pricing decision involves

45. Which is not a canon of public expenditure?

32. Isocost line is also called as


(a) Profit line
(c) Budget line

A B C D
(b) 1 2 3 4
(d) 4 1 2 3

43. Which is the correct statement about GNP?

D
O

Codes
A B C D
(a) 1 4 2 3
(c) 1 3 2 4

Employment
Consumption
Savings
Population

of traditional

(a) Welfare economics


(b) Agricultural economics
(c) Labour economics
(d) Production economics

53. Which of the following statements is incorrect?


(a) The demand function specifies the relationship
between quantity demanded and all the variables
that determine demand
(b) The demand curve is that part of the demand
function, that expresses the relation between price
charged for a product and the quantity demanded
cetirus paribus

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UGC-NET Tutor Management

(a) Stanton
(c) J S Bain

(b) Clark
(d) J Robinson

55. The Cobb Douglas production function can be


represented as
(b) P = K L C
(d) P = K L1/ 5C 4/ 5

(a) P = K L C
(c) P = K L1/ 2C1/ 2

facing

perfect

(b) Y

(a) Y

firm

Quantity

(c) Y

Quantity

Quantity

(d) Y

(a) It is linear function


(b) It is homogeneous production function of first
degree
(c) It takes into account only two factors- labour and
capital
(d) All of the above

57. Dynamic forces operating in the economy create


various kinds of economic fluctuations which are
termed as trends in economy. Which of the
following is not an economic fluctuation?
(b) Cyclical trends
(d) Repetitive trends

58. 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

63. Break-even analysis can also be termed as


(a) business profit analysis
(b) cost volume profit analysis
(c) sales volume profit analysis
(d) None of the above

64. If the firms under perfect competition have


different costs, abnormal profits can be earned in
the long run only by
(a) marginal firms
(b) intra-marginal firms
(c) All of the firms
(d) None of these

65. 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

59. Shifts in demand curve as shown in the figure


below represents
Px

Quantity

66. The firm will continue to produce only if it covers


(a) total cost of production (b) total variable cost
(c) total fixed cost
(d) average variable cost

67. Conditions of firms equilibrium under perfect


competition in short run is/are

D
D2
D1
O

Dx

(a) extension of demand


(b) increment of demand
(c) increase of demand
(d) expansion of demand

60. 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

61. In the long run competitive equilibrium


every firm will earn only normal profit
every firm will earn economic profit
every firm will incur losses
marginal firm will earn no profit

(a) MC = MR
(b) slope of MC > slope of MR
(c) MR = Price
(d) All of the above

68. The reasons for Lshaped long run average cost


curve is/are
Y

Cost

(a) Secular trends


(c) Seasonal trends

Price

56. Which of the following is/are the characteristics of


Cobb Douglas production function?

Price

3/ 4 1/ 4

2/ 3 1/ 3

(a)
(b)
(c)
(d)

for

Price

54. Statement Price is the amount of money and/or


other item with utility needed to acquire a
product is given by

62. Demand curve


competition is

Price

(c) Elasticity can be measured in two different ways


called point elasticity and arc elasticity
(d) Arc elasticity measures the average elasticity at a
point on the arc of the demand curve

LAC

Output

(a) technological progress


(b) learning by doing
(c) both a and b
(d) None of the above

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Managerial Economics
69. Underprice discrimination price will be higher in
the market where demand is
(a) unitary elastic
(c) highly elastic

(b) less elastic


(d) None of these

70. From the resource allocation point of view, perfect


competition is preferable because
(a) the firm operate at excess capacity
(b) there is no idle capacity
(c) there is a whole variety of output
(d) free entry and exit of firms

(a) decrease
(b) remain unchanged
(c) increase
(d) None of the above

(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

81. Excess capacity is not found under


(a) monopoly
(b) monopolistic competition
(c) oligopoly
(d) perfect competition

72. Marginal product becomes negative


when total output declines
when total output increases rapidly
when total output stops increasing fastly
in no circumstances

82. Which statements is/are correct?


(a) In case of elastic demand, total revenue declines
with price increase
(b) In case of unitary elastic demand, total revenue is
unaffected by change in price
(c) In inelastic demand, total revenue rised with price
increase.
(d) All of the above

73. The law of equi-marginal utility states that


(a) MUx . Px = MU y . Py = MU z. Pz
MUx MU y MU z
(b)
=
=
= MUm
Px
Py
Pz
(c)

MUx MU y
=
= MUm
Py
Px

83. National income is


(a) Net dividend
(c) Net interest

MUx MU y MU z
(d)
<
<
Px
Py
Pz

74. 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

of
for

(b) interest
(d) All of these

(a) GNP at factor cost


(b) GNP at market priceDepreciation
(c) GNP + Capital assets
(d) None of the above

87. Match the following

for
for

77. The concept of MU for explaining diamond-water


paradox is
(b) absolutely wrong
(d) cant be explained

78. 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

(a) GDP Depreciation


(b) GDP + Net factor income from abroad
(c) GDP Depreciation + Subsidies
(d) Wages + Interest + Rent

86. NNP at market price equals

76. Diamond-water paradox establishes the fact that

(a) absolutely correct


(c) partially correct

84. GNP can be calculated as

(a) wages and salaries


(c) rents

(b) J M Keynes
(d) E Boulding

(a) marginal utility


as well as total utility
necessary goods is high
(b) marginal utility is low and total utility is high
necessary goods
(c) marginal utility is high and total utility is high
precious goods
(d) marginal utility is low and total utility is high
precious goods

(b) Net output


(d) Net income

85. Income method for measuring GNP considers

75. Concept of Consumers Surplus was evolved by


(a) Dr Alfred Marshall
(c) Adam Smith

(a) Joan Robinson


(b) Paul A Samuelson
(c) Chamberlin
(d) Alfred Marshall

80. The supply function will move downwards to the


right if the MC of all the firms in a perfectly
competitive industry were to

71. Economics of scale means

(a)
(b)
(c)
(d)

79. The increasing returns to scale occurs because


larger scale provides greater specialization to
various factors is a statement given by

List I
(Theories)
A.
B.
C.
D.

Kaldors Theory
Says Law
Damor Model
Neo-classical Theory

Codes
A B C D
(a) 1 4 2 3
(c) 1 3 2 4

List II
(Subjects)
1.
2.
3.
4.

Distribution
Employment
Growth
Golden rule of
accumulation

A B C D
(b) 3 1 4 2
(d) 1 2 3 4

4 4

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88. Which of the following will not be considered
while calculating national income by product
method?
Services of doctors
Agricultural produce of farmer
Services of housewives
Sales of goods manufactured in company

(a) supply creates its own demand


(b) savings investments equality
(c) unemployment in labour market
(d) All of the above

90. Which one is not the determining factor for price


strategy formulation of a firm?
(a) Channels of distribution
(b) Consumer association
(c) Age of product
(d) Supply in market

(b) Robinson
(d) Taylor

92. Match the following

(a) Crowther
(c) Taylor

(b) Keynes
(d) CN Vakil

(a) Monopoly
(b) Perfect Competition
(c) Oligopoly
(d) Monopolistic Competition

101. Which is a cross demand curve?


(a) Y

(b) Y

D
O

Quantity

(c) Y

A B C D E
(b) 1 3 5 2 4
(d) 2 4 1 3 5

Demand of A X

(d) Y
Price

Codes
A B C D E
(a) 1 2 3 4 5
(c) 2 4 3 5 1

Single buyer, single seller


Single seller, many buyers
Single buyer, many sellers
Few sellers, many buyers
Two sellers, many buyers

Price

1.
2.
3.
4.
5.

Price of B

List II

List I
Monopoly
Oligopoly
Monopsony
Duopoly
Bilateral monopoly

99. Who stated that Money inflation should be


compared to dacoit?
100. In which market structure, a firm has no control
over price of its product?

91. The theory of Circular Causation was developed


by

A.
B.
C.
D.
E.

98. National Income in India is estimated by the


(a) Planning Commission
(b) Indian Statistical Institute
(c) Reserve Bank of India
(d) Central Statistical Organisation

89. Says law specifies

(a) J R Hicks
(c) Ragnar Nurkse

(a) elasticity
(b) marginal revenue and price
(c) marginal cost and price
(d) price and average cost

Price of B

(a)
(b)
(c)
(d)

97. Professor J Robinson measured monopoly power


in terms of

93. The law of demand is a


(a) indicative statement
(b) qualitative statement
(c) illustrative statement
(d) selective statement

Quantity

(a) Personal income Direct taxes


(b) Consumption + Saving
(c) All of the above
(d) None of the above

96. Degree of monopoly power according to Learner is


P MC
P
MC P
(d)
P

Quantity

MP

Price

(c) Y

X
MP

Quantity

(b) Y

TVC
Price

(d) Y

AP

Cost

95. Disposable income equals

(a) Y

Production

(a) NIUndistributed
corporate
profit
Taxes-social security contributions
(b) NI + Transfer payments + undistributed profits
(c) NNP Corporate taxes
(d) NI Transfer payments

P
e
AR MR
(c)
P

102. Which one of the following is curve for law of


increasing returns?

94. Personal income equals

(a)

Demand of A X

X
MC

(b)

Labour

Quantity

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Managerial Economics
103. Which is a Total Variable Cost Curve?
(a) Y

111. The lines ABCD represents which type of a


curve?

(b) Y

TVC

Price

Cost

Cost

TVC

Output

(c) Y

Output

(d) Y
Cost

Cost

Output

Output

104. LAC curve is

105. Which one is not the stage of product life cycle?


(b) Increase
(d) Saturation

106. Break-even point in units is given by


TFC
(a)
SP - MC
TFC SP
(c)
SP VC

P / V Ratio
(b)
Fixed Cost
(d) None of these

107. Price discrimination will not be a good approach


for
(a) railway company
(b) electric supply company
(c) FMCG company
(d) mobile company
(b) implicit costs
(d) real costs

109. Match the following


List I
(Scope of managerial
economics)
A. Demand Analysis
B. Cost and Product
Analysis
C. Capital Management
D. Profit Management

Codes
A B C D
(a) 1 3 2 4
(c) 4 3 2 1

(a) Kinked curve of oligopoly


(b) Price rigidity curve
(c) Demand curve for duopoly
(d) None of the above
(a) consumer maximised his total pleasure, when
satisfaction gained from marginal units of all
commodities was the same
(b) consumers gain satisfaction only when
Px MUx
=
Py MU y
(c) when more units are consumed, marginal utility
diminishes
(d) All of the above

113. Law of equi-marginal utility is also known as


(a) Law of substitution
(b) Law of maximum satisfaction
(c) Gossens second law
(d) All of the above

114. Which of the following is one of the basis for the


indifference curve analysis?

108. All money costs can be regarded as


(a) social costs
(c) explicit costs

112. Gossens second law states that

(a) U shaped and less pronounced


(b) U shaped and more pronounced
(c) U shaped only
(d) intersecting SAC curve
(a) Introduction
(c) Decline

Output
D

TVC

List II
(Subjects)
1. Demand forecasting
2. Cost-output function

(a) Independent utility


(b) Ordinal utility
(c) Cardinal utility
(d) Diminishing utility

115. Put these concepts in chronological order of their


development
1. Law of demand
2. Law of indifference
3. Law of diminishing MU
4. Revealed preference theory
5. Indifference curve
(a) 13245
(b) 12345
(c) 13254

(d) 15243

3. Prices estimates
4. Profit policies

116. Economists who developed the Indifference Curve


Analysis are

A B C D
(b) 1 2 3 4
(d) 1 4 3 2

117. Revealed preference theory was introduced by

110. The demand function is a statement of the


relationship between
(a) quantity of factors of production
(b) quantity of product demanded and all the factors
that affect this quantity
(c) quantity demanded and profit
(d) product demand and cost of output

(a) Hicks and Allen


(b) Hicks and Marshall
(c) Samuelson and Robinson
(d) Hicks and Robinson
(a) Marshall
(c) Robinson

(b) Samuelson
(d) Taylor

118. 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

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119. Marginal utility approach was finalised by

125. Which chart represents life cycle of a product?


(a) Y

120. Equilibrium of monopolist will never lie below the


middle point of the average revenue curve because
below the middle point
(a) elasticity of demand is less than one
(b) marginal revenue is negative
(c) Both a and b
(d) market laws cease to operate
List II
(Formula)

B.

Sales in units

C.

Sales in rupees

D.

1.

Contribution Per Unit

Codes
A B C D
(a) 1 2 3 4
(c) 1 3 2 4

Sales (VC + FC)


2. FC + Profit
Sales VC
3. FC + Profit
VC
1
Sales
Fixed Cost
4.
BEP in units

(d) Y

Cost

Cost

Production

Sales

of

the

(b) social economy


(d) open economy

following

statements

is

(a) Productivity is the amount of goods and services


produced from each hour of labours time
(b) Inflation is the overall increase in price levels
(c) Phillips curve shows relation between inflation
and employment
(d) Phillips curve reviews impact of inflation on
unemployment

129. When AR is constant, MR is


(a) equal to AR
(c) more than AR

(b) less than AR


(d) equal to zero

130. The SAC curve

Cost

Cost

(c) Y

Sales

128. Which one


incorrect?

(b) Y

Period

(b) 2.5
(d) 2

(a) market economy


(c) business economy

123. Which is a long run average cost curve?

Period

127. An economy that allocates resources through


interaction of household demand and supply of all
the firms is called

(a) Conflicting attitude of firms


(b) Advertising and sales promotion
(c) One firm
(d) Few sellers

Production

(d) Y

(a) 0.5
(c) 1.5

122. Which one is not the characteristics of oligopoly


firm?

Period

126. Calculate elasticity of sales if a 20% increase in


the advertising expenditure causes the amount of
sales to increase by 40%.

A B C D
(b) 4 1 2 3
(d) 1 4 3 2

(a) Y

Period

Sales

List I
(Items)
Profit

(c) Y

121. Match the following

A.

(b) Y

Sales

(a) AC Pigou
(b) Alfred Marshall
(c) JR Hicks
(d) JS Mill

(a) falls when MC < AC


(c) Both a and b
Production

SAC

(b) rises when MC > AC


(d) None of these

131. Price discrimination is possible when


(a) elasticities of two markets are not known
(b) both markets have different elasticities of demand
at the ruling price
(c) both markets have same elasticities of demand
(d) different products are made for two markets

132. If the supply curve remains constant and the


demand increases, the price will
Production

124. Basic price


(a) is the determination of the companys price level
including its adoption to cyclical fluctuations
(b) is the valuation of product of the firm
(c) is the determination of cost of product of the firm
(d) is a cost price

(a) increase
(c) unchange

(b) decrease
(d) None of these

133. The competitive equilibrium leads to


(a) the firms producing with excess capacity
(b) the firms producing at their minimum cost
(c) the firms producing at a cost higher than the
minimum
(d) some firms produce under low cost and others
under high cost

4 7

Managerial Economics
134. The vertical distance between TVC and TC is
equal to
(a) TFC
(c) MC

143. Marginal rate of substitution of x for y can be


shown in the curve by formula

(b) AVC
(d) Price

Y
a

(a)
(b)
(c)
(d)

Good Y

135. Goods X and Y are perfect substitutes. A


consumers
indifference
curve
for
these
commodities is represented by a/an
upward sloping curve which is convex from below
upward sloping straight line
downward sloping curve which is convex to origin
downward sloping straight line

(a) perfect complementarity


(b) no complementarity
(c) perfect substitutability
(d) non substitution

(a) MRSxy
(c) MRSxy

(a) one
(c) diminishing

the

(b) zero
(d) increasing

138. Match the following


List I
(Values of MRSxy )
A. MRSxy is diminishing
B. MRSxy is constant
C. MRSxy is increasing
D MRSxy is zero
.

Codes
A B C D
(a) 1 2 3 4
(c) 4 3 2 1

List II
1. L-shaped indifference
curve
2. Indifference curve is
concave to the origin
3. Indifference curve is
straight line sloping
downwards to the right
4. Indifference curve must
be convex to the origin

A B C D
(b) 1 3 2 4
(d) 2 4 3 1

(b) no satisfaction
(d) equal satisfaction

140. We are much better off when drawing purely


imaginary indifference curves than we are when
speaking of purely imaginary utility functions.
This was remarked by
(a) JR Hicks
(c) Schumpeter

(b) Allen
(d) Samuelson

141. MRS xy and MRS yx are zero when the commodity x


and y are
(a) complementary to each other
(b) substitutes to each other
(c) perfectly complementary to each other
(d) perfectly substitutes to each other

142. Who proposed substitution effect of change in


consumers equilibrium?
(a) Hicks and Allen
(c) Marshall

y
=
x
y
=
x

Good X

(b) MRSxy =
(d) MRSxy =

x
y
x
y

144. The smoothness and continuity of an indifference


curve means that goods in question are assumed
to be
(a) complementary to each other
(b) supplementary to each other
(c) not related to each other
(d) perfectly divisible

145. Any straight-line supply curve through the origin


has an elasticity
(a) zero
(c) infinite

(b) one
(d) less than one

146. Income constraint of a budget line can be


expressed as
(a) I = Px . Qx + Py . Q y
(c) I = Px . Qx Py . Q y

(b) I = Px . Py + Qx . Q y
(d) I = Px . Q y + Py . Qx

147. When more and more units of factor increase,


marginal productivity of a factor will

139. Indifference curve is downward sloping from left


to right since more x and less y give
(a) less satisfaction
(c) more satisfaction

c
x

136. The L shaped indifference curve represents

137. For perfectly complementary products,


marginal rate of substitution MRS xy is

(b) Boulding
(d) Schumpeter

(a) fall or diminish


(c) rise or increase

(b) remain constant


(d) None of these

148. The falling part of a total utility curve represents


(a) zero MU
(c) increasing MU

(b) decreasing MU
(d) negative MU

149. The concept of supply curve as used in economic


theory is relevant only for the case of
(a) oligopoly competition
(b) perfect competition
(c) imperfect competition
(d) monopoly

150. A profit-maximising monopolist in two separate


markets will
(a)
(b)
(c)
(d)

always charge a higher price in less selling market


always charge higher price in more selling market
charge same price in both markets
adjust his sales in the two markets so that his MR
in each market just equals his marginal cost

151. Under perfect competition, a firm will be in


equilibrium when its AC is
(a)
(b)
(c)
(d)

at minimum level
equal to AR
covering only prime costs of production
None of the above

4 8

UGC-NET Tutor Management

152. A perfectly competitive industry becomes a


monopoly with the same cost conditions, it will
now sell
(a) a larger output at a higher price
(b) a reduced output at a higher price
(c) an unchanged output at a higher price
(d) a large output at same price

153. Under price discrimination, price will be higher


in the market where demand is
(a) highly elastic
(c) less elastic

(b) unitary elastic


(d) None of these

154. Under which circumstances, a monopoly firm has


to reduce the price for its product?
(a) MC is falling
(b) MR > MC
(c) Advertising costs are increasing
(d) Average costs seems to fall

(b) P < AC
(d) MR > MC

156. Match the following


List I
A. Increasing cost
industry
B. Decreasing cost
industry
C. Constant cost
industry

List II
1. Negatively sloped long run
supply curve
2. Positively sloped long run
supply curve
3. Horizontal long run supply
curve

Codes
A B C
(a) 3 1 2
(c) 2 3 1

A B C
(b) 3 2 1
(d) 2 1 3

157. If the GNP is ` 550 crore and NNP


is ` 475 crore, the depreciation is
(a) ` 100 crore
(c) ` 175 crore

(b) ` 75 crore
(d) cannot be calculated

158. A firm enjoys maximum control over the price of


its product under
(a) monopolistic competition
(b) duopoly
(c) monopoly
(d) oligopoly

159. Bilateral monopoly means


(a)
(b)
(c)
(d)

two sellers only


two buyers only
a monopoly seller buying from money supplier
a monopolist facing a monopsonist

160. Monopsony explains the


(a) sellers monopoly
(b) buyers monopoly
(c) monopoly of both buyer and seller
(d) None of the above

161. Marginal Utility MU of nth unit can be found out


by the formula
TUn
n
(c) TUn TUn 1

(a)

(a) convex to x-axis


(c) concave to y-axis

(b) concave to x-axis


(d) convex to y-axis

163. Utils is a term used


(a) by Marshall in demand analysis
(b) by Walras to measure cardinal utility
(c) to measure marginal utility
(d) None of the above

164. Cross elasticity of complementary goods is


(a) negative
(c) infinite

(b) zero
(d) unitary

165. In case of an inferior commodity, the income


elasticity of demand is
(a) zero
(c) unitary

(b) negative
(d) positive

166. The area which lies under the demand curve for a
given good measures

155. The equilibrium level of output for the pure


monopolist is where
(a) MR = MC
(c) MR < MC

162. Total utility curve is

(b) TU n
(d) TU + n.TUn 1

(a) marginal utility


(c) marginal profit

(b) marginal cost


(d) total utility

167. Adam Smith spoke about the famous diamond


water paradox to show that
(a) utility is related to supply
(b) utility could be the cause of value
(c) utility is related to demand
(d) utility could not be the cause of value

168. Marginal utility curve is always


(a) rising
(c) parallel to x axis

(b) falling
(d) parallel to y axis

169. Which of the following is/are the assumptions of


Marginal Utility Analysis of Marshall?
(a) Cardinal utility
(c) Diminishing MU

(b) Constant MU of money


(d) All of the above

170. Which of the following is/are the assumptions of


Indifference Curve Analysis?
(a)
(b)
(c)
(d)

Utility is ordinal
Diminishing MRS
Consistency and transivity of choice
All of the above

171. In the case of inferior goods, the income effect


(a)
(b)
(c)
(d)

partially offsets the substitution effect


reinforces the substitution effect
is equal to the substitution effect
more than offsets the substitution effect

172. Under monopoly and imperfect competition


(a) MC > Price
(c) MC = Price

(b) MC < Price


(d) None of these

173. Even in the long run equilibrium, the pure


monopolist can make abnormal profits because of
(a) high price he charges
(b) blocked entry for other firms
(c) his low AC
(d) advertising expenditure is high

174. If there were no changes in the quantity of goods


demanded even when their prices fall, we
understand that
(a) demand was perfectly inelastic
(b) demand was elastic
(c) demand was unit elastic
(d) demand was more elastic than one

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Managerial Economics
175. When the income elasticity of demand is greater
than unity, the commodity is
(a) a necessity
(c) inferior good

(a) Paul M Sweezy


(c) Bertrand

(b) a luxury
(d) non-related good

List I
(Market Structure)

List II
(Price elasticity of
Demand)

Perfect Competition
Monopolistic Competition
Oligopoly
Monopoly

Codes
A B C D
(a) 1 2 3 4
(c) 4 3 2 1

1.
2.
3.
4.

Very small
Small
Large
Infinite

P MC
P
(c) Both a and b

(a) in the same direction


(b) in the opposite direction
(c) in an improper manner
(d) cannot be determined

1
e
(d) None of these

189. Which of the following statements is correct about


demand curve?

178. When a monopolist is able to sell each separate


unit of the output at a different price according to
the pocket of the customer, he is applying
(a) first degree price discrimination
(b) second degree price discrimination
(c) third degree price discrimination
(d) None of the above

(a) Professor AC Pigou


(c) Alfred Marshall

degrees

of

price

(b) Professor Lerner


(d) Wicksell and Cairnes

180. Take it-or-leave it price discrimination is of


(a) third degree
(c) first degree

(b) second degree


(d) zero degree

181. For a monopolist applying price discrimination,


demand curve for his product becomes the
(a) AR curve
(c) TR curve

(b) MR curve
(d) None of these

182. The AR curve and industry demand curve are


same in case of
(a) pure oligopoly
(b) perfect competition
(c) monopolistic competition
(d) monopoly

183. The monopolists shift up their SAC and SMC


curves because of the imposition of
(a) a per unit tax
(b) a per unit price
(c) a per unit tax like a variable cost
(d) a per unit excise duty

184. Which form of monopoly regulation is most


advantageous for the consumer?
(a) Per unit tax
(b) Lump sum tax
(c) Price control
(d) All are equally beneficial

(b) pure monopolist


(d) bilateral monopolist

188. Ceteris Paribus, a change in the price of a


commodity causes the quantity purchased of its
complements to move

(b)

the

the elastic part of a demand curve


the inelastic part of a demand curve
constant elastic part of a demand curve
ignores elasticity of demand

(a) pure duopolist


(c) monopsonist

A B C D
(b) 1 3 2 4
(d) 4 2 1 3

(a)

(a)
(b)
(c)
(d)

187. In the long run, due to blocked entry, pure profits


can be made by a

177. Lerners index of monopoly power is

179. Who
proposed
discrimination?

(b) Augustin Cournot


(d) Stackelberg

186. A monopolist charging high price operates on

176. Match the following

A.
B.
C.
D.

185. Kinky demand curve hypothesis was put forward


by

(a) When slope is zero, elasticity is zero; when slope is


infinite, elasticity is also infinite
(b) When slope is zero, elasticity is unitary and when
slope is infinite, elasticity is still unit
(c) When slope is zero, demand is infinitely elastic;
when slope is infinite, elasticity is zero
(d) None of the above

190. Ordinal approach is based on


(a)
(b)
(c)
(d)

law of maximum satisfaction


utility cannot be measured in cardinal numbers
utility could not be measured in ordinal numbers
utility can be measured

191. At the point of inflexion, MU is


(a) increasing
(c) maximum

(b) decreasing
(d) negative

192. A consumer reaches equilibrium state


maximum satisfaction at the point where
(a) MU < P (b) MU = P

(c) MU > P

of

(d) TU = P

193. As a consumer increases his consumption of a


commodity, the total utility he derives from its
consumption increases, but at a diminishing rate.
This is
(a) a statement of fact
(c) a hypothesis

(b) an economic law


(d) None of the above

194. Which one is not the method of demand


forecasting?
(a) Delphi method
(c) Correlation method

(b) Simple trend analysis


(d) None of the above

195. MU curve will intersect x axis when


(a) MU is negative
(c) Both a and b

(b) TU is maximum
(d) None of these

196. Indifference curve is downward sloping from left


to right since more x and less y gives
(a) equal satisfaction
(b) less satisfaction
(c) more satisfaction
(d) maximum satisfaction

5 0

UGC-NET Tutor Management


209. Which curve represents AFC curve?
(a) Y

198. The cost assigned to factors of productions that


the firm neither hires nor purchases is called
(a) imputed cost
(c) economic cost

(b) Y

Cost

(a) substitution effect + price effect


(b) substitution effect income effect
(c) substitution effect + income effect
(d) substitution effect price effect

Cost

197. The total effect of a price change of a commodity


is

(b) social cost


(d) opportunity cost

Output

(c) Y

Output

Output

(d) Y

Cost

TFC curve
TVC curve but not by slope of TC curve
TC curve but not by the slope of TVC curve
either TVC curve or TC curve

200. The engel curve passes through the tangency


point of
price line and isocost line
budget line and indifference curve
isoquant and budget line
None of the above

measure

of

203. Who demonstrated the abnormal shape of


demand curve for diamonds through the Doctrine
of Conspicuous Consumption?
(a) Thorstein Veblen
(c) Robert Giffen

Output

C. Y

(b) Alfred Marshall


(d) David Ricardo

204. Production can be defined as an act of


(a) earning profit
(b) destroying utility
(c) creating utility
(d) providing services

205. A production function measures the


(a) productivity of factors of production
(b) proportion in which factors are used
(c) The relations between change in physical inputs
and physical outputs
(d) economies of scale

Output

Output

D. Y

Cost

(a) imperfect competition


(b) monopoly
(c) perfect competition
(d) monopsony

B. Y
Cost

(a) the law of diminishing MU


(b) law of substitution
(c) revealed preference theory
(d) indifference curve analysis

202. While
analysing
Marshalls
consumers surplus, one assumes

210. Match the following


List I (Curves)
A. Y

201. The Doctrine of Consumers Surplus is based on

Output

Cost

(a)
(b)
(c)
(d)

Cost

(a)
(b)
(c)
(d)

Cost

199. MC is given by the slope of

Output

List II
(Costs)
1. TFC 2. ATC 3. AVC 4. LAC
Codes
A B C D
A B C D
(a) 1 4 2 3
(b) 1 2 3 4
(c) 4 3 2 1
(d) 2 1 4 3

211. Each short run AC curve coincides with LAC at


(a) upper point
(c) middle point

(b) lower point


(d) do not intersect

212. The vertical distance between TVC and TC as


shown in the curve below is equal to
TC

206. Which is an inverted U shaped curve?


(b) TC
(d) MC

TVC

Cost

(a) AC
(c) FC

207. All of the following curves are U shaped except


(a) AVC curve
(c) AC curve

TFC

(b) AFC curve


(d) MC curve

208. The revealed preference theory assumes


(a) strong ordering
(b) weak ordering
(c) introspection
(d) subjective method

(a) MC
(c) TFC

Output

(b) AVC
(d) None of these

5 1

Managerial Economics
213. The MC curve cuts AVC and ATC curves at

224. Relation between AR and MR can be established


by the formula

(a) falling parts of each


(b) different points
(c) rising parts of each
(d) their minimum level

(a) MR = AR 1

e
1
(c) MR = AR

e 1

214. The normal LAC curve is influenced by


(a) principle of constant returns to scale
(b) economies and diseconomies of large
production
(c) principle of diminishing returns
(d) All of the above

scale

215. MC curve always cuts the AC curve from below


(a) on the falling portion of AC curve
(b) on the rising portion of AC curve
(c) at any point on the AC curve
(d) at the minimum point of the AC curve

216. Which of the following is an implicit cost of


production?
(a) Wages to the labour
(b) Rent on building
(c) Interest on owned money capital
(d) Payment for machine

217. Average fixed cost


(a) increases as output increases
(b) remain same at all levels of output
(c) decreases with increase in output
(d) any one of these is possible

218. The Marginal Productivity (MP) of a factor


(a) is always positive
(b) can be positive or zero
(c) is always negative
(d) can be positive, negative or zero

219. Short-run cost curves are influenced by


(a) law of returns to scale
(b) law of variable proportions
(c) economies disecoomies of scale
(d) None of the above

220. When the law of diminishing returns begins to


operate, the TVC curve begins to
(a) fall at an increasing rate
(b) rise at a decreasing rate
(c) rise at an increasing rate
(d) fall at a decreasing rate

221. If ATC curve is a rising straight line, then as


output expands, MC curve will
(a) lie above the ATC curve
(b) lie below the ATC curve
(c) Both coincide
(d) None of the above

222. The advertising cost is included in


(a) fixed cost
(b) variable cost
(c) never included in variable cost
(d) sometimes in FC, sometimes in VC

223. In case of elasticity of demand for AR is unity,


MR curve will coincide with
(a) x-axis
(b) parallel to x-axis
(c) y-axis
(d) intersect x-axis

e 1
(b) AR = MR

e
MR
(d) AR =
e

225. In all forms of imperfect competition, the average


revenue curve facing the individual slopes
(a) upward
(c) parallel to x-axis

(b) downward
(d) vertically

226. If MC is above AC at a time when output is


rising, then
(a) ATC is falling
(c) AVC is falling

(b) AVC is rising


(d) ATR is rising

227. Normal profits are considered as


(a) explicit costs
(c) social costs

(b) implicit costs


(d) private costs

228. The relationship between elasticity of demand (e),


AR and MR can be established as
AR
MR AR
MR
(c) e =
MR AR
(a) e =

AR
AR MR
MR
(d) e =
AR MR

(b) e =

229. Marginal revenue will be positive if elasticity of


demand is
(a) less than one
(c) equal to one

(b) more than one


(d) zero

230. Assume that a firms total revenue curve takes


the form of a straight line which passes through
the origin. We may deduce that
(a) price and marginal revenue are equal
(b) price exceeds MR
(c) TC equals TR
(d) elasticity of demand is unity

231. On a less than perfectly elastic demand curve, the


MR for a given price and output is equal to price
multiplied by
(a) [1 e ]

1
(b) e

1
(c) 1

(d)

1
e

232. If the demand curve confronting an individual


firm is perfectly elastic, than
(a) the firm is a price taker
(b) the firm cannot influence the price
(c) the amount, the firm supplies to the market is
small relative to total supply
(d) All of the above

233. When the perfectly competitive firm and industry


are both in long run equilibrium
(a) P = MR =SAC = LAC
(b) D = MR = SMC = LMC
(c) P = MR = lowest point on the LAC curve
(d) All of the above

234. The competitive equilibrium leads to


(a)
(b)
(c)
(d)

the firm producing with excess capacity


firm producing at a cost higher than the minimum
firm producing at their minimum costs
cannot be ascertained

5 2

UGC-NET Tutor Management

235. Using TR and TC a profit maximising firm will be


in equilibrium at a point where the
(a) gap between the two is small
(b) gap between the two is greatest
(c) gap does not exist
(d) None of the above

247. When AR is falling, MR will be

236. When the TR curve and TC curve moves in


parallel and TR exceeds TC
(a) normal profit is maximised
(b) abnormal profit is maximised
(c) total profit is maximised
(d) total profit is minimised
(b) comforts
(d) all goods

238. The term optimum allocation on consumers


expenditure on various goods and services is used
in
(a) giffen paradox
(b) law of demand
(c) law of diminishing MU
(d) law of equi-marginal utility

(b) Emotional
(d) Indifferent

(b) good complements


(d) poor complements

241. When the AP is positive but declining, MP could


be
(a) negative
(c) declining

(b) zero
(d) Any of these

242. If the factor prices and factor quantities move in


the same direction we have

(b) indirectly
(d) None of these

250. The Law of increasing returns is only applicable


to agriculture, according to
(b) JM Keynes
(d) Neo - classical school

251. The opportunity cost of using any factor is what


is currently forgone by using it'. This definition is
given by
(b) Prof Lipsey
(d) Paul Samuelson

252. When with a change in price, the total outlay on a


commodity remains constant, it is a case of
(a) perfect elasticity
(c) unit elasticity

(b) zero elasticity


(d) perfect inelasticity

253. If by increasing the quantity of labour by one


unit, they can give up 2 units of capital and still
produce the same output, then the MRTS LK is
(a) 4
1
(c)
2

(b) 2
DK 2

(d) MRTSLK =
=

DL 1

255. Consumers are likely to get maximum variety of


goods under

(a) zero
(c) negative

245. A set of all possible production combinations


while producing two commodities is
(a) isocost line
(b) isoquant map
(c) production possibility curve
(d) production function

(b) monopoly
(d) oligopoly

theorem

(a) given a linearly homogenous production function,


the product is exhausted
(b) total product is exhausted only under laissez-faire

(b) positive
(d) infinite

257. In the income distributed method for finding out


national income, which one is not considered as
factor income?
(a) Labour income
(c) Capital income

exhaustion

(b) direct cost


(d) fixed cost

256. Two commodities are considered to be perfect


substitutes for each other if the elasticity of the
substitution is

reductions in unit cost of production


reductions in unit cost of distribution
addition to the unit cost of production
reduction in the total cost of production

product

(a) Engel's Curve


(b) Income-Consumption Curve
(c) Price-Consumption Curve
(d) Lorenz curve

(a) imperfect competition


(c) perfect competition

244. Economies of scale means

246. Clark-Wicksteed
states that

249. A Consumer's Demand Curve can be obtained


from

(a) sunk cost


(c) variable cost

243. The time period and elasticity of time are related

(a)
(b)
(c)
(d)

(b) MR = 0
(d) MC = 0

254. The prime cost may be considered as

(a) a decreasing cost industry


(b) an increasing cost industry
(c) a constant cost industry
(d) inadequate data to tell
(a) directly
(c) in direct proportion

248. Generally, the profits are maximised in the short


run at the point at which

(a) Prof Marshall


(c) Joan Robinson

240. A high value of cross-elasticity indicates that the


two commodities are
(a) very good substitutes
(c) poor substitutes

(b) less than AR


(d) can't be known

(a) Classical school


(c) Modern school

239. The economic analysis expects the consumer to


behave in which manner?
(a) Rational
(c) Irrational

(a) more than AR


(c) equal to AR

(a) MC = MR
(c) MR is negative

237. Consumers surplus is the highest in the case of


(a) necessities
(c) luxury

(c) in long-run equilibrium, the total product will be


exhausted in rewarding the factors
(d) total product is exhausted only under conditions of
monopoly

(b) Private income


(d) Mixed or other income

258. Which one of the following factors is included in


estimating national income?
(a)
(b)
(c)
(d)

Sales of second hand goods


Sales of debentures and bonds
Value of production for self consumption
Transfer payments like pension

5 3

Managerial Economics
259. Which one is not the feature of a capital
budgeting?
(a) Large anticipated benefits
(b) Reversibility of investment
(c) High degree of risk
(d) Long time period for returns

260. Which of the following capital budgeting methods


do not consider time factor while evaluating the
feasibility of a project?
(a) Profitability index
(c) ARR

(b) IRR
(d) NPV method

261. The term macro-economics was introduced by


(a) Ragnar Frisch
(c) KE Boulding

(b) Schultz
(d) Adam Smith

262. Internal rate of return method is also known as


(a) discounted rate of return
(b) time adjusted rate of return
(c) marginal efficiency of investment
(d) All of the above

(b) 2.6 yr

(c) 2 yr

(d) 3.5 yr

(b) JM Keynes
(d) Boulding

265. For the purpose of measuring national income in


India, CSO uses which of the following methods?
(a) Net output method
(c) Expenditure method

(b) Income method


(d) All of these

266. For the purpose of measuring national income in


India, CSO has divided the whole of Indian
Economy into how many sectors?
(a) 10

(b) 14

(c) 20

(d) 28

267. Arc elasticities are appropriate for analysing the


effect of discrete change in
(a) demand
(c) income

(b) price
(d) substitute goods

268. Marginal revenue, at the quantity that generates


maximum total revenue and negative beyond that
point, has the value of
(a) zero

(b) +1

(c) 1

(d) infinite

269. Investment in public works is known as


(a) labour expenditure
(c) social expenditure

(b) capital expenditure


(d) All of the above

List I
(Types of Market)
Perfect Competition
Monopolistic Competition
Oligopoly
Monopoly

(a) Law of economics


(b) Law of supply
(c) Law of demand
(d) Law of constant returns

272. The supply schedule that shows the quantity


supplied at each price is called
(a) Bens supply schedule (b) Rens supply schedule
(c) Supply schedule
(d) All of the above

(b) supply
(d) quantity purchased

274. The demand schedule showing the quantity


demanded at each price is known as
(a) Catherins demand schedule
(b) Ponters supply schedule
(c) Okhas demand schedule
(d) None of the above

275. The marginal revenue equation can be derived


from the
(a) demand equation
(c) cost equation

(b) supply equation


(d) price equation

276. Which is/are the salient feature(s) of monopolistic


competition?
(a) Large number of sellers
(b) Normal profit
(c) Non-price competition
(d) All of the above

277. The causes of emergence of monopoly is/are


(a)
(b)
(c)
(d)

concentration of ownership of raw material


legal protection
state regulation
All of these

278. A particular game between two captured prisoners


that illustrates why cooperation is difficult to
maintain even when it is mutually beneficial is
called as
(a) game theory
(c) dominant strategy

(b) prisoner's Dilemma


(d) None of these

279. An agreement among firms in a market about


quantities to produce or prices to change is called
(a) collusion
(c) monopoly

(b) cartel
(d) oligopoly

280. Whose signature is found on a one rupee note?

270. Match the following

A.
B.
C.
D.

271. The claim that, Cetirus Paribus, the quantity


supplied of a good when the price of goods rises,
is known as

(a) demand
(c) quantity supplied

264. The statement Labour and capital of the country


acting on it's natural resources produce annually
a certain net aggregate of commodities including
services of the kinds. This is the true net annual
income of the country ' is given by
(a) Alfred Marshall
(c) Karl Marx

A B C D
(b) 4 3 2 1
(d) 1 3 2 4

273. Supply schedule is a table showing relationship


between the price of goods and

263. If the cost of a machine is ` 50000 and cash


inflow is ` 15000 for the year; ` 20000 in second
year and ` 25000 in third year. Find out The pay
back period?
(a) 2.25 yr

Codes
A B C D
(a) 1 2 3 4
(c) 1 2 4 3

1.
2.
3.
4.

List II
(Nature of
Industries)
Financial markets
FMCG market
Cars
Transport

(a) Finance Minister


(c) RBI Governor

(b) Finance Secretary


(d) Prime Minister

281. The concept of monopsony (buyers monopoly) was


invented by
(a) Mrs Robinson and Chamberliin
(b) Chamberliin
(c) A P Learner
(d) Mrs J Robinson

5 4

UGC-NET Tutor Management

282. Which one of the following is not an objective of


fiscal policy?
(a)
(b)
(c)
(d)

Economic growth
Economic stability
Maximisation of employment opportunities
Regulation of financial markets

283. If P is price level, x refers to exports, m to imports


and Q to quantity; Income terms of trade will be
represented as
Px
. Qx
q. m
Px + m Q
(c)
P

(a)

Px
. Qx
Pm
Pm
(d) Qx x
Px

(b) close substitutes


(d) perfect substitutes

286. The synonyms for opportunity cost are :


(b) social cost
(d) All of these

287. The merit of zero based budgeting is that


(a) tax liability is reduced
(b) profit goes up
(c) deficit financing becomes zero
(d) expenditure is rationalised

288. Infant Industry Argument


protection was propounded by

for

industrial

(b) Freidrich List


(d) Ragmer Nurkse

289. Excess capacity is not found under


(a) monopoly
(c) imperfect competition

(b) perfect competition


(d) oligopoly

290. Efficient allocation of resources is likely to be


achieved under
(a) monopolistic competition
(b) perfect competition
(c) monopoly
(d) oligopoly

291. Consider a demand curve which takes the form of


a straight line cutting both axis-elasticity at the
mid-point of the line would be
(a) 0.5
(c) 1.5

(b) 1
(d) 0

292. The term social accounting was first introduced


into economics by
(a) JR Hicks
(c) Marshall

(a) Jimmy Carter


(c) Prof Pigou

(b) JM Keynes
(d) Samuelson

of

perfectly

(b) below the LAC


(d) equal to LAC

297. Increasing returns is not caused by


(a) technological advance
(b) specialisation of labour
(c) marketing economies
(d) varying factor proportion

298. The Revealed Preference Theory is based on

285. An isoquant curve will be a straight line, if inputs


are

(a) Fayol and Taylor


(c) Paul Prebisch

295. Zero based budgeting was first tried in 1973 by

(a) above the LAC


(c) equal to AFC

(a) marginal revenue curve


(b) marginal cost curve
(c) total revenue curve
(d) total cost curve

(a) alternative cost


(c) transfer price

(a) production and consumption account


(b) government account
(c) capital account
(d) All of the above

296. Long-run equilibrium price


competitive firm is always

(b)

284. The implication of the kinked demand curve is


reflected in a discontinuity in the

(a) used in fixed ratio


(c) poor substitutes

294. Incoming and outgoing flows in social accounting


are classified as

(b) JK Galbraith
(d) David Ricardo

293. According to social accounting concept, principle


forms of economic activities are
(a) consumption and production
(b) capital accumulation
(c) government transactions
(d) All of the above

(a) rhe assumption of indifference


(b) utility and demand
(c) introspection
(d) observed consumer behaviour

299. The market period supply curve for perishable


commodities is
(a) relatively inelastic
(c) relatively elastic

(b) perfectly inelastic


(d) perfectly elastic

300. Supply of a commodity is a


(a) stock concept
(b) a flow concept
(c) both stock and flow concept
(d) None of the above

301. Match the following


List I

List II

A. Cardinal approach

1. Marginal Utility

B. Ordinal approach

2. Revealed Preference
Theory

C. Hicks-Allen
Approach

3. Indifference Curve

D. Consumers
Surplus

4. Alfred Marshall

Codes
A B C D
(a) 1 3 2 4
(c) 4 3 2 1

A B C D
(b) 1 2 3 4
(d) 4 2 3 1

302. At the point of producers equilibrium


(a) the isoquant is tangent to the isocost curve
MPL
(b) the MRTS LK equals
MPK
MPL MPK
(c)
=
PL
PK
(d) All of the above

303. The optimum output is the one which is produced


(a) by the optimum firm
(b) at maximum AC
(c) at minimum AC
(d) at zero MC

5 5

Managerial Economics
304. Which of the following is not a discount policy?
(a) Trade discount policy
(b) Discount cash policy
(c) Quantity discount policy
(d) All of the above

305. Which committee was constituted for reforms in


tax-structure?
(a) Narsimham Committee (b) Chelliah Committee
(c) Gadgil Committee
(d) Kelkar Committee

306. Greshams Law is related to

307. The definition that Economics is concerned with


an enquiry into the nature and causes of wealth
of nations is given by
(b) AE Cairens
(d) None of these

308. The theory which deals with the comparative


statistics and positive equilibrium is called
(a) Macro-Economics
(c) Modern-Economics

309. Phillips curve


between

(b) Micro-Economics
(d) Applied Economics

determines

(a) both marginal and average cost curves rise


(b) the industry short-run supply curves
upwards to the right
(c) output of all firms increase
(d) price of the products rise

shift

315. Expanding the output till the rising marginal cost


is less than price, is the nature of
(a) Imperfectly competitive market
(b) Perfectly competitive market
(c) Perfectly competitive industry
(d) Perfectly competitive firm

(a) consumption and demand


(b) supply and demand
(c) circulation of money
(d) deficit financing

(a) Karl Marx


(c) Adam Smith

314. If more firms enter a competitive industry the


theory predicts that

the

relationship

316. The center of economic activity is


(a) choice of using unlimited resources
(b) scarcity of resources
(c) wants are very limited
(d) unlimited wants and limited resources

317. What does the outward slope in the production


possibility curve shows?
(a) Scarcity
(b) Unlimited wants
(c) Unemployment
(d) Increasing opportunity cost

318. Adam Smiths invisible hand is the

(a) Employment and inflation


(b) Inflation and interest rates
(c) Inflation and unemployment
(d) Inflation and income

(a) governments policies


(b) bond market
(c) self- regulating economy
(d) changing rates of interest

310. Why the average fixed cost curve does not touch
the output axis?
Y

319. Note issuing department of RBI should always


possess the minimum gold reserve worth
(a) ` 85 cr
(c) ` 200 cr

(b) ` 115 cr
(d) Not required

320. A long-run analysis of production is called


AFC

(a) Economies of scale


(b) Law of variable proportion
(c) Law of increasing returns
(d) Law of returns to scale

321. Rectangular hyperbola is the shape of


O

Output

(a) Because AFC cannot be negative


(b) Because AFC cannot be zero
(c) Because AFC cannot be less than one
(d) None of the above

311. Under monopoly the supply curve is absent


because
(a)
(b)
(c)
(d)

the monopolist always makes profit


there is no entry for others
equilibrium involves MC = MR and MC < P
the monopolist controls the supply

312. Price control is one of the monopoly regulation


which is mod beneficial to the
(a) producer
(c) consumer

(b) government
(d) seller

313. Price control will effect the monopolist firms


(a) equilibrium output and profits
(b) equilibrium output
(c) profits
(d) average revenue in the short-run

(a) AFC

(b) TFC

(c) MC

(d) FC

322. If unit cost of item is ` 10, monthly carrying


charge is 3%, monthly demand is 100 units,
ordering cost is ` 20 per annum EOQ is equal to
(a) 115.4
(c) 400

(b) 11.45
(d) 33.3

323. National Housing is a controlled enterprise of


(a) NABARD
(c) RBI

(b) UTI
(d) Finance Ministry

324. Corporate tax is imposed by


(a) local government
(b) state government
(c) central government
(d) both b and c

325. The Laffer


between
(a)
(b)
(c)
(d)

tax
tax
tax
tax

rates
rates
rates
rates

curve

and
and
and
and

explains

the

relationship

tax revenue
employment
income
government expenditure

5 6

UGC-NET Tutor Management

326. Theory that Opening a country to world markets


gives an opportunity to utilize unemployed and
underemployed resources is known as
(a) Ricardian theory
(b) Heckscher-ohlin theory
(c) Vent for surplus theory
(d) Strategic trade theory

(a) current account


(b) service account
(c) capital account
(d) official reserves account

328. Which of the following is not a non-tariff barrier?


(a) Ad-valorem duties
(b) Voluntary export restraint
(c) Health and product standards
(d) Environmental protection laws

329. The production possibility curve under increasing


opportunity cost is
(a) concave to the origin
(b) convex to the origin
(c) straight line parallel to x-axis
(d) downward straight line

330. What is the technical progress that increases the


productivity of labour (L) proportionately more
than the productivity of Capital (K) resulting in an
increase in L/K at constant relative factor prices,
called?
(a) Labour- saving technical progress
(b) Natural technical progress
(c) Wage saving technical progress
(d) Capital-saving technical progress

331. Which one of the following model explains the


paradox pertaining to the rural-urban migration
in the context of rising urban employment?
(b) Lewis model
(d) Mahalanobis model

332. The Mahalanobis model was developed for which


plan?
(a) First FYP
(c) Third FYP

(a) an industry
(c) an economy

(b) a firm
(d) None of these

335. Periods of less than full employment corresponds


to

327. In the Balance of Payment Account, the transfer


payments are included in

(a) Todano model


(c) Solow model

334. Aggregate supply is the total amount of output


supplied by

(b) Second FYP


(d) Fourth FYP

333. The ratio between the price of a countrys export


goods and price of its import goods is known as
(a) single factoral terms of trade
(b) double factoral terms of trade
(c) net barter terms of trade
(d) export-import terms of trade

(a) points inside the production possibility curve


(b) points outside the production possibility curve
(c) points on the PPC
(d) None of the above

336. In a planned or command economy, all the market


decisions are taken by
(a) consumers
(c) government

(b) industries
(d) suppliers

337. In the case of a normal good, the income effect


(a)
(b)
(c)
(d)

partially offsets the substitution effect


completely offsets the substitution effect
reinforces the substitution effect
is always equal to the substitution effect

338. A concept which has importance in the


equilibrium analysis and thus economic analysis is
(a) opportunity Cost
(c) marginal Cost

(b) average Variable Cost


(d) total Cost

339. A firm may be considered to be of optimum size


when
(a)
(b)
(c)
(d)

its TC and TR curve coincide


AC is at its minimum
AC = TFC
it is faced with a horizontal demand curve

340. Marginal revenue will be zero if the elasticity of


demand is
(a) zero
(c) equal to one

(b) greater than one


(d) less than one

341. The slope of TVC or TC curve indicates


(a) AC
(c) MC

(b) MR
(d) Variable Cost

342. The general average curve is also known as


(a) total marginal unit cost curve
(b) total unit cost curve
(c) average total unit cost curve
(d) average variable cost curve

343. Emperical evidence has shown that due to


technological changes and learning by doing
trends, the shape of LAC curve has changed from
(a) U shaped to L shaped (b) L shaped to U shaped
(c) never changed
(d) None of the above

5 7

Managerial Economics

Answers
1.
11.
21.
31.
41.
51.
61.
71.
81.
91.
101.
111.
121.
131.
141.
151.
161.
171.
181.
191.
201.
211.
221.
231.
241.
251.
261.
271.
281.
291.
301.
311.
321.
331.
341.

(c)
(d)
(c)
(a)
(c)
(b)
(a)
(a)
(d)
(c)
(b)
(a)
(a)
(b)
(c)
(a)
(c)
(a)
(b)
(c)
(a)
(b)
(a)
(c)
(d)
(b)
(a)
(b)
(d)
(b)
(b)
(c)
(a)
(a)
(c)

2.
12.
22.
32.
42.
52.
62.
72.
82.
92.
102.
112.
122.
132.
142.
152.
162.
172.
182.
192.
202.
212.
222.
232.
242.
252.
262.
272.
282.
292.
302.
312.
322.
332.
342.

(b)
(d)
(b)
(c)
(a)
(d)
(a)
(a)
(d)
(c)
(c)
(a)
(c)
(a)
(a)
(b)
(b)
(b)
(d)
(b)
(c)
(c)
(c)
(d)
(b)
(c)
(d)
(a)
(d)
(a)
(d)
(c)
(a)
(b)
(c)

3.
13.
23.
33.
43.
53.
63.
73.
83.
93.
103.
113.
123.
133.
143.
153.
163.
173.
183.
193.
203.
213.
223.
233.
243.
253.
263.
273.
283.
293.
303.
313.
323.
333.
343.

(d)
(d)
(d)
(b)
(d)
(d)
(b)
(b)
(b)
(b)
(b)
(d)
(a)
(b)
(a)
(c)
(b)
(b)
(a)
(c)
(a)
(d)
(a)
(c)
(b)
(b)
(b)
(c)
(b)
(d)
(c)
(a)
(c)
(c)
(a)

4.
14.
24.
34.
44.
54.
64.
74.
84.
94.
104.
114.
124.
134.
144.
154.
164.
174.
184.
194.
204.
214.
224.
234.
244.
254.
264.
274.
284.
294.
304.
314.
324.
334.

(d)
(b)
(a)
(c)
(d)
(a)
(b)
(d)
(b)
(a)
(a)
(b)
(a)
(a)
(d)
(a)
(a)
(a)
(c)
(d)
(c)
(b)
(a)
(c)
(a)
(d)
(a)
(a)
(a)
(d)
(d)
(b)
(d)
(c)

5.
15.
25.
35.
45.
55.
65.
75.
85.
95.
105.
115.
125.
135.
145.
155.
165.
175.
185.
195.
205.
215.
225.
235.
245.
255.
265.
275.
285.
295.
305.
315.
325.
335.

(b)
(d)
(b)
(b)
(d)
(b)
(a)
(a)
(d)
(c)
(b)
(c)
(a)
(d)
(b)
(a)
(b)
(b)
(a)
(c)
(c)
(d)
(b)
(b)
(c)
(a)
(d)
(a)
(d)
(a)
(b)
(d)
(a)
(a)

6.
16.
26.
36.
46.
56.
66.
76.
86.
96.
106.
116.
126.
136.
146.
156.
166.
176.
186.
196.
206.
216.
226.
236.
246.
256.
266.
276.
286.
296.
306.
316.
326.
336.

(b)
(b)
(c)
(a)
(b)
(d)
(b)
(b)
(b)
(b)
(a)
(a)
(d)
(a)
(a)
(d)
(d)
(c)
(b)
(a)
(d)
(c)
(b)
(c)
(a)
(d)
(b)
(d)
(d)
(d)
(c)
(d)
(c)
(c)

7.
17.
27.
37.
47.
57.
67.
77.
87.
97.
107.
117.
127.
137.
147.
157.
167.
177.
187.
197.
207.
217.
227.
237.
247.
257.
267.
277.
287.
297.
307.
317.
327.
337.

(c)
(d)
(b)
(a)
(d)
(d)
(d)
(a)
(d)
(a)
(c)
(b)
(a)
(b)
(a)
(b)
(c)
(c)
(b)
(c)
(b)
(c)
(b)
(a)
(b)
(b)
(b)
(d)
(c)
(d)
(c)
(d)
(a)
(c)

8.
18.
28.
38.
48.
58.
68.
78.
88.
98.
108.
118.
128.
138.
148.
158.
168.
178.
188.
198.
208.
218.
228.
238.
248.
258.
268.
278.
288.
298.
308.
318.
328.
338.

(d)
(c)
(c)
(a)
(d)
(c)
(c)
(a)
(c)
(d)
(c)
(d)
(c)
(c)
(d)
(c)
(b)
(a)
(b)
(a)
(a)
(d)
(b)
(d)
(a)
(c)
(a)
(b)
(b)
(d)
(c)
(c)
(a)
(c)

9.
19.
29.
39.
49.
59.
69.
79.
89.
99.
109
119
129.
139.
149.
159.
169.
179.
189.
199.
209
219
229.
239.
249.
259.
269.
279.
289.
299.
309.
319.
329.
339.

(b)
(a)
(a)
(d)
(b)
(c)
(b)
(c)
(d)
(b)
(b)
(b)
(a)
(d)
(b)
(d)
(d)
(a)
(c)
(d)
(c)
(b)
(b)
(a)
(c)
(b)
(b)
(a)
(b)
(b)
(c)
(b)
(a)
(b)

10.
20.
30.
40.
50.
60.
70.
80.
90.
100.
110.
120.
130.
140.
150.
160.
170.
180.
190.
200.
210.
220.
230.
240.
250.
260.
270.
280.
290.
300.
310.
320.
330.
340.

(a)
(d)
(c)
(b)
(a)
(a)
(b)
(c)
(d)
(b)
(b)
(c)
(c)
(c)
(d)
(b)
(d)
(c)
(b)
(b)
(b)
(c)
(a)
(a)
(a)
(c)
(a)
(b)
(b)
(b)
(b)
(d)
(d)
(c)

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