01.INTRODUCTION TO MANAGERIAL ECONOMICS
Q1.Managerial economics refers to application of ……….. for business practice.
Economic Theory
Q2.Managerial economics reconciles the tools, techniques, models and theories of traditional economics with ……………....
the actual business practice
the environment in which a firm has to operate
A and B
Q3.To make ……….. use of scarce resources of a firm to maximum profits, is one of the objectives of Managerial Economics.
Optimum
Q4.What is the major contribution of managerial economics to management?
Identification of key variables in the business decision making process.
Q5. A business firm is an………….. organization, which is engaged in transforming productive resources into goods that are to be sold in the market.
Economic
Q6.To integrate economic theory with business practice, is one of the objectives of
Managerial Economics
Q7.A major part of business decision making depends on accurate estimates of ………..
Demand
Q8.Managerial Economics is normative science and can be used to make better management decisions.
True
Q9.Who has defined the subject as “the integration of economic theory with business practice for the purpose of facilitating decision making and forward planning by management.”?
Spencer & Siegelman
Q10.Managerial Economics is………….. in character as it is concerned with the problems of individual business firm.
Micro Economic
Q11.Which of the following is the first step in the process of decision making?
The object to be achieved must be clearly defined
Q12.There is always an element of uncertainty about ……….. because of variation in costs and revenues.
Profits
Q13.As an applied science it helps in estimating ………………..which are relevant to concerned business activity.
industry trends
macro factors
A and B
Q14.Managerial Economics is an applied branch of knowledge as it regards to
policy formulation decision making future planning.
All of the above
_____________________________________________
Chapter 02: Demand Analysis
Q1.………………..is defined as, “the percentage change in the quantity demanded of a good divided by the percentage change in the income of the consumer”.
Income Elasticity of Demand User
Q2.The total quantity which all the customer of a commodity are willing to buy at a given price per time unit, given their money, income, his taste and price of other commodities is known as ‘…………….’ for the commodity.
market demand
Q3.What is/are the necessary things for a demand to exist?
The price of a commodity
The amount of the commodity the customer or consumer is prepared to buy per unit time.
A given time period
All of the above
Q4.A change in the demand for one good in response to a change in the price of another good represents ……………...of the former good for the latter good.
Cross Elasticity of Demand
Q5.The demand for commodities like leather, steel, coal, paper etc., and also to factors of production like land, labour and capital, is called as the …………….
Composite demand
Q6.The term ‘elasticity of demand’ is used to denote a measure of the rate at which demand changes in response to the …………...
Change in prices
Q7.“The demand for anything at a given price is the quantity of it which will be bought per unit of time at that price”. Who stated this definition of demand?
Professor Benham
Q8.Conventionally a demand curve is drawn by representing the …………..variable on the vertical axis and ………... variable on the horizontal axis.
Price, Demand
Q9.Certain commodities like diamonds, jewellary are demanded just because they happen to be expensive or prestige goods. This excption to law of demand is generally referred to as…………..
Articles of distinction
Q10.The aggregate of individual demands for a product is called as ……………... for the product.
Market demand
Q11.The ………….. is a locus of points showing various alternative price-quantity combinations.
Demand curve
Q12.According to …………., “The demand for good is a schedule of the amount that buyers would be willing to purchase at all possible prices at anyone instant of time.”
Professor Mayers
Q13. A tabular statement showing the quantities of a commodity that will be purchased by an individual at various prices in a given period of time is referred to as an………………
individual demand schedule.
Q14.……………….is also known as producer’s goods demand.
Indirect demand
Q15.Who defined the Law of Demand as, “The law of demand states that people will buy more at lower price and buy less at higher price, other things remaining the same.”
Samuelson
____________________________________________
Chapter 03: Law of Supply
Q1.The relation between price and quantity supplied is ……….. and positive.
direct
Q2.According to ……..., “Supply refers to the quantity of a commodity offered for sale at a given price, in a given market, at a given time”.
Murad
Q3.The supply curve is generally………….. sloped.
positively
Q4.The changes in supply due to causes or determinants other than price is called ……………... in supply.
“decrease” or “increase”
Q5.According to ……….., “Higher the price the greater the quantity supplied or the lower the price, the smaller the quantity supplied”.
Dooley
Q6.……………. is the only market structure for which a supply function can be derived.
Perfect competition
Q7.By………... we mean the quantities of a commodity or service which a seller is willing and able to offer for sale at various prices during a given period of time.
supply
Q8.If a seller anticipates ……….., they may choose to hold back current supply to take advantage of higher price in the future, thus decreasing the market supply.
rise in price
____________________________________________
04. Cost and Revenue Concepts
Q1.The opportunity cost arises because of the…………..opportunities.
Foregone
Q2.According to ………….., “Production costs are those which must be received by the resource owners in order to assume that they will continue to supply them in a particular time of production”.
Campbell
Q3.……………….. are defined as an earning from the next best use of a factor forgone by employing it in its present use.
Opportunity costs
Q4.The basic principle of the cost behaviour is that the total cost increases with increase in …………...
Output
Q5.Total Revenue can also be calculated as the sum of marginal revenues of all the units sold. It means, ……... = MR1 + M2 + MR3 + ……….MRn
TRn
Q6.The MR curve when intersected by the MC curve determines the …………. position of the firm under all market conditions.
Equilibrium
Q7.Direct material and direct labour costs are usually ……………...
Controllable
Q8.Total cost is determined by the formula -----------------------
TC = TFC + TVC
Q9.According to ……………..., “Cost of production represents money costs which we want to incur in order to acquire the factors of production”.
Gulhrie and Wallace
Q10.……………. refers to the total additional cost associated with the marginal batch of output.
Incremental cost
Q11.The difference between average total cost and average variable cost is -------------
the average fixed cost
Q12.…………….. are those which vary with the variation in the total output. They are a function of output.
Variable Cost
Q13.Concept of opportunity cost is having practical importance because it is helpful in -------
measuring Profitability
taking important Long-run decisions
framing the Capital Budgeting
All of the above
Q14.A firm that shuts down and produces no output incurs a loss equal to its ----------------
total fixed costs.
Q15.A firm has a total variable cost of Rs.1000 at 5 units of output. If fixed costs are Rs.400, what will be the average total cost at 5 units of output?
280
________________________________________
Chapter 5: PRODUCTION FUNCTION
Q1.………………..to scale describes the relationship between outputs and scale of inputs in the long-run when all the inputs are increased in the same proportion.
The law of returns to scale
Q2.……………. is a process of combining various material inputs and immaterial inputs (plans, know-how) in order to make something for consumption (the output).
Production
Q3. …………….. is considered a factor of production because economic resources can exist in an economy and can not be transformed into consumer goods without an entrepreneur.
entrepreneurship
Q4.Which of the following is not an assumption of the 'Law of variable Proportion'?
There is change in technology.
Q5.In which stage of 'Law of variable Proportions', the average product reaches the maximum and equals the marginal product
Stage-I
Q6.The main objective of …………. is to find the cut-off production volume from where a firm will make profit.
break-even analysis
Q7.In which stage of 'Law of variable Proportions', the production is feasible and profitable because in this stage the marginal productivity of labor, though positive, is diminishing but is non-negative?
Stage-II
Q8.The relationship between the physical inputs and the physical outputs of a firm is referred to as the ----------------- function.
Production
Q9.These economic resources are also called the ……………....
factors of production
Q10.
The law of variable proportions (or the law of non-proportional returns) is also known as the law of diminishing returns.
law of diminishing returns
law of non-proportional returns
B or C
Q11.…………….. are the goods or services available to individuals and businesses used to produce valuable consumer products.
Economic resources
Q12.Which of the following resource includes timber, land, fisheries, farms and other similar natural resources?
Land
Q13.…………. = (Fixed Cost) x (Selling Price per unit) ÷ (Selling Price per unit - Variable cost per unit)
Break-even Sales
Q14.Which of the following resource represent the monetary resources companies use to purchase natural resources, land and other capital goods?
Capital
Q15.In which stage of 'Law of variable Proportions', total product starts declining and the marginal product becomes negative?
Stage-III
_______________________________________________
Chapter 06: Market Structure
Q1.One of the most important features of the monopolistic competition is …………....
Product differentiation
Q2.Market in economics does not refer to a particular market place but the ………….. in which goods are bought and sold.
entire region
Q3.According to R.G. Lipsey, “…………. is a market structure in which all firms in an industry are price- takers and in which there is freedom of entry into, and exit from, industry.”
Perfect competition
Q4.Under monopolistic competition no single firm controls more than a ………………. of the total output of a product.
small portion
Q5.If only one firm attains economies of scale to such a large extent that it is able to meet the entire market demand, there is …………...
Monopoly
Q6.If there is a single buyer in the market, this is buyer’s monopoly and is called …………….market.
Monopsony
Q7.Each firm produces and sells a ……………. product so that no buyer has any preference for the product of any individual seller over others.
homogeneous
Q8.Each ……………………. firm knows that changes in its price, advertising, product characteristics, etc. may lead to counter-moves by rivals.
oligopolist
Q9.The number of buyers and sellers is so large that none of them individually is in a position to influence the price and output of the industry as a whole. This is the first condition of …………….competition market.
perfect
pure
Both A and B
Q10.Which of the following is NOT the determinants of market structure for a particular good?
Nature of economy
Q11.Ordinarily, the term “market” refers to a particular place where goods are purchased and sold.
True
Q12.Which type of Oligopoly is found among producers of such consumer goods as automobiles, cigarettes, soaps and detergents, TVs, rubber tyres, refrigerators, typewriters, etc.?
Imperfect Oligopoly
Q13.According to D. Salvatore, “………….. is the form of market organisation in which there is a single firm selling a commodity for which there are no close substitutes.”
Monopoly
Q14.…………………. refers to a market situation where there are many firms selling a differentiated product.
Monopolistic competition
Q15.…………. is a special case of the theory of oligopoly in which there are only two sellers.
Duopoly
____________________________________________________
Chapter 07: Business Cycle
Q1.Business cycles are………………. in character.
international
Q2.The period of low income, output and employment has been described as …………....
contraction,
recession,
downswing or depression
All of the above
Q3.The period of high income, output and employment has been called the period of ……………………..
expansion
upswing
prosperity
All of the above
Q4.The duration of a business cycle has not been of the same length; it has varied from a minimum of …………. to a maximum of ten to twelve years
two years
Q5.In expansion phase of business cycle, …………. increase till we have full employment of resources and production is at the highest possible level with the given productive resources.
Both output and employment
Q6.………….. are the economic equivalent of forest fires, clearing out dead wood and leaving an uncluttered environment ripe for a fresh start.
Bust Cycles
Q7.Third phase of business cycle i.e. Contraction is also called as ……………..
Downswing
Recession
Depression
All of the above
Q8. An important feature of business cycles is that consumption of …………….and services does not vary much during different phases of business cycles.
non-durable goods
Q9.The role of the business cycle in economics here is to rid the economy of ………….
poor-performing companies.
Q10.Depression, it may be noted, occurs when there is a severe……………...of economic activities.
contraction or recession
Q11. J.M. Keynes writes, “A trade cycle is composed of periods of………characterized by rising prices and low unemployment percentages with periods of …………. characterized by falling prices and high unemployment percentages.”
good trade, bad trade
Q12.…………... in 1991-92 in India were a major factor in the recession of that year.
High interest rates
Q13.…………….. passes from one industry to another and chain reaction continues till the whole economy is in the grip of recession.
Both A and B
Q14.Which is the turning point from depression into expansion?
Recovery
Q15.J.M. Keynes writes, “A trade cycle is composed of periods of………characterized by rising prices and low unemployment percentages with periods of …………. characterized by falling prices and high unemployment percentages.”
good trade, bad trade
_________________________________________________
Chapter 8: Inflation
Q1.Who are expected to lose during inflation?
Anyone earning a fixed income
Q2.Creeping or mild inflation is when prices rise ……….. a year or less and it benefits economic growth.
3 percent
Q3.According to Keynesians theoretical approach to DPI, aggregate demand may rise due to a rise in ………………..
consumer demand or investment demand
government expenditure or net exports
the combination of these four components of aggregate demand.
All of the above
Q4.CPI may be induced by ………………………...
wage-push inflation
profit-push inflation
A or B
Q5.Deflation is the opposite of inflation. It's when prices………... It's caused when an asset bubble bursts.
fall
Q6.……………... is when economic growth is stagnant but there still is price inflation
Stagflation
Q7.Inflation is usually considered to be a problem when the inflation rate rises above ………….... The higher the inflation, the more serious the problem is.
0.02
Q8.Who are expected to suffer most during inflation?
People who live on interest income
Q9. Which of the following statements regarding advantages of inflation is incorrect?
Inflation can't boost growth
Q10 ……………..is when prices skyrocket more than 50 percent a month. Examples of hyperinflation include Germany in the 1920s, Zimbabwe in the 2000s, and America during its civil war.
Hyperinflation
Q11.During inflation, borrowers ………. and lenders ……….during inflation because debts are fixed in rupee terms.
gain, lose
Q12.Inflation tends to discourage ……………..and long-term economic growth.
Investment
Q13.During inflation, usually people experience……….. in incomes.
Rise
Q14. When inflation rises to 10 percent or more, …………… wreaks absolute havoc on the economy. Money loses value so fast that business and employee income can't keep up with costs and prices.
Galloping inflation
Q15. Which of the following statements regarding disadvantages of inflation is incorrect?
Inflation can make an economy competitive
_______________________________________________
Chapter 9: Deflation
Q1.Which of the following you should do during deflation?
prepare for a change in politics
Q2.Which of the following is NOT the advantage of the deflation?
increases the gap between the rich and poor
Q3.When the economy goes through a series of deflation, ………………... tend to view cash as one of their best possible investments.
investors
Q4.Although increasing the nation’s monetary supply too much could create excessive inflation, a ……………. expansion in the nation’s monetary base could be an effective means of fighting deflation.
Moderate
Q5.In simple words …………. is the king in deflationary times as holders of cash are benefited and holders of assets are at disadvantageous because the value of assets keeps declining in case of deflation.
Cash
Q6.Deflation is an indication that economic conditions are …………….... Deflation is usually associated with significant unemployment,
Deteriorating
Q7.Deflation hits hard rich people as compared to poor people because in case of deflation value of majority of assets …………....
falls
Q8.Which of the following is NOT the factor causing the deflation?
Increase in Currency Supply
Q9.Which of the following you should NOT do during deflation?
invest in commodities, such as crude oil
Q10.While deflation represents a decrease in the prices of goods and services throughout the economy, …………………..represents a situation where inflation increases at a slower rate.
Disinflation
Q11.Which of the following is NOT the disadvantage of the deflation?
Individuals or companies who have already taken loan are most benefitted
Q12.When the economy undergoes a period of …………….., customers often take advantage of the substantially lower prices.
Deflation
Q13.Business Revenues …………. during deflation.
Reduces
Q14.………………. is a rare phenomenon that does not occur in the course of a normal economic cycle, and therefore, investors must recognize it as a sign that something is severely wrong with the state of the economy
Deflation
Q15.Which of the following is NOT the factor causing the deflation?
Increase in Currency Supply
_____________________________________________
Chapter 10: Economic Policies
Q1.An expansion in fiscal policy (i.e. an increase in government spending) adds directly to…………….. but if financed by higher government borrowing, this may result in higher interest rates and lower investment.
Aggregate Demand
Q2.Credit creation is the multiple expansions of banks demand deposits.
True
Q3.………………. aims at expanding economic activities by encouraging spending on goods and services by making credit available in larger quantities and cheaper rates.
Expansionary monetary policy, or Easy monetary policy
Q4. Which of the following is the objective of Monetary Policy?
Exchange Rate Stability
Q5.Which of the following instruments of Central Bank refers to buying and selling of securities to the banking and non-banking public?
Open Market Operations
Q6.A …………... tries to contract economic activities during an expansionary phase and expanding economic activities in a Contractionary phase of a business cycle.
Countercyclical Monetary Policy
Q7.……………involves the use of government spending, taxation and borrowing to influence both the pattern of economic activity and also the level and growth of aggregate demand, output and employment.
Fiscal Policy
Q8.When any bank sanctions a loan to its customer it does not make a cash payment to the party concerned but opens a new account i.e. ……………….., in the name of the borrower.
derivative deposits
active deposit
A or B
Q9.…………..involves the use of interest rates to control the level and rate of growth of aggregate demand in the economy.
Monetary Policy
Q10.The word credit is derived from a …………. word 'credo', which means 'I believe'.
Latin
Q11.To generate revenue and to incur expenditure, the government frames a policy called budgetary policy or fiscal policy. So, the fiscal policy is concerned with ……………
government expenditure
government revenue
Both A and B
Q12. A central issue in…………….is whether or not markets, left alone, automatically bring about long run economic equilibrium.
macroeconomics
Q13. "Credit may be defined as the right to receive payment or the obligation to make payment on demand or at some future tune on account of an immediate transfer of goods. Who has given this definition of 'Credit'?
Kent
Q14.………... interest rates will lead to an increase in consumer and business capital spending both of which increases national income.
Lower
Q15.What refers to the policy measures undertaken by the government or the central bank to influence the availability, cost and use of money and credit with the help of monetary techniques to achieve specific objectives?
Monetary Policy
Credit Policy
RBI's Money Management Policy
A or B or C Correct Answer
_______________________________________________
Chapter 11: External Environment
Q1.Which of the following theory stated that a nation’s competitiveness in an industry depends on the capacity of the industry to innovate and upgrade. His theory focused on explaining why some nations are more competitive in certain industries?
Porter’s National Competitive Advantage Theory
Q2.…………. is when a country imports goods from another country and then sells it to a different country.
Entrepot trade
Q3.Countries such as …………………..still favor exports and discourage imports through a form of neo-mercantilism in which the countries promote a combination of protectionist policies and restrictions and domestic-industry subsidies.
Japan, China,
Singapore, Taiwan,
Germany
All of the above
Q4.Which one the the following cannot be considered as a disadvantage of the international trade?
Economic Independence
Q5.The main historical theories are called classical and are from the perspective of a country, or ……………..
country-based
Q6.Wassily W. Leontief studied the US economy closely and his analysis became known as the Leontief Paradox because it was the reverse of what was expected by the …………………….
Factor Proportionate Theory
Q7……………... can be thought of to be the result of the opening up of the global economy and the concomitant increase in trade between nations.
Globalization
Q8.…………... is an exchange of capital, goods and services across international borders.
Foreign Trade
Q9.…………… theory stated that a nation’s wealth shouldn’t be judged by how much gold and silver it had but rather by the living standards of its people.
Adam Smith's
Q10.The following are the four major factors that necessitate ………….. (1)Uneven Distribution of Natural Resources, (2) Human Resources and Specialisation , (3) Economic Development, (4) Theory of Comparative Cost
Foreign Trade
Q11.Which of the following advanced factors have been perceived by Porter as providing a country with a sustainable competitive advantage?
skilled labor,
investments in education, technology,
investments in infrastructure
All of the above
Q12.Which of the following theory states that most trade in manufactured goods will be between countries with similar per capita incomes, and intraindustry trade will be common?
Linder’s Country Similarity Theory
Q13.When a country sources and buys goods or services from another country it is termed as …………...
import trade
Q14.Which of the following international trade theory is a "Modern or Firm-Based Trade Theories"?
Absolute Advantage Theory
Q15.By the mid-twentieth century, the theories began to shift to explain trade from a firm, rather than a country, perspective. These theories are referred to as modern and are …………………..
country-based
firm-based
company-based
Both B or C
Comments
Post a Comment