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problems
d. Analyzing various business and managerial problems of a firm.
environment
Unit2 - 2 Mark Quiz Questions
1.A product can be considered as inferior in economics if increase in disposable income
of the consumer causes
a. Increase in demand
b. No change in demand
c. Less than proportionate change in demand.
d. Decrease in demand
b. Decrease in demand
c. A small rise in demand
d. Increase in demand
a. Elastic
b. Inelastic
c. Perfectly elastic.
d. Relatively elastic
5.Market Demand Schedule shows the
6.Over the years, the demand for textiles in India has grown inspite of rising pricies. It is
an example for
a. demand function
b. General tendency in rise in price
a. Fall in the price of one lead to fall in the demand of the other
b. Increase in price of one leads to increase in the demand of the other one
11.When the buyer is badly in need of a product, in that case he would buy more
a. At higher prices
b. At different prices
c. At lower prices
d. At the same price
a. Shift forward
b. Becomes steep
c. Becomes flat
d. Shift backwards
13.When two goods are complementary, a rise in the price of one comodity will induce
a. An upward shift in demand for the other commodity
b. A rise in the price of other commodity
c. No shift in the demand for the other commodity
a. Becomes horizontal
b. Backward shift in demaned curve
15.X and Y are two products which are considered as close substitutes of each other if
a. Increase in the price of one leads to increase in the demand for the other and vice-
versa.
b. Increase in the price of one will have no impact on the demand for the other
c. Increase in the price of one leads to decrease in the demand of another and vice-
versa.
d. Fall in the price of one lead to fall in the demand of the other.
2.Demand forecasting helps in determining the level of output at various periods and
avoiding.
a. Risks in production.
b. Unnecessary competition.
4.The management will have to decide upon the quantity to be supplied and the quantity
to be held back based upon
c. Price.
d. Policy of the firm.
a. Production policy.
b. Management policy.
c. Sales policy. 1
d. Investment policy.
Unit5 - 2 Mark Quiz Questions
1.A rational producer will operate in the ____ stage of law of variable proportions
a. Any of these
b. 2nd
c. 1st
d. 3rd
a. MP is negative
b. MP is decreasing
c. AP is negative
d. Both a and b
a. minimum
b. Maximum
c. Decreasing
d. Increasing
a. When the qty of the fixed input is increased and return to the variable input falls
b. when units of a variable input are added to a fixed input and marginal product
falls
c. when the size of the plant is increased in the long run
d. when units of a variable input are added to a fixed input and total product falls.
5.If a production function is homogenous of degree one it implies that
6.In the production of wheat all of the following are variable factors that are used by the
farmer except
a. The tractor used by the farmer in planting and cultivating not only wheat but also
rice
b. The number of hours that the farmer spends in cultivating the wheat fields
c. The field that has been cleared of trees and in which the crop is planted
d. The seed and fertilizer used when the crop is planted
a. Maximum cost
b. Decreasing cost
c. Increasing cost
d. Constant cost
8.Iso-quant curve cannot be a straight line as it would imply the operation of
c. constant MRTS
d. diminishing
c. D.M.R.T S
d. I.M.R.TS
a. public goods
b. agricultural goods
c. consumer goods
d. capital goods
a. Increasing
b. Decreasing
c. Zero
d. c. Constant
b. I do not agree
c. I agree
d. May not be
13.Production economics is
a. states that beyond some level of a variable input, the marginal product of that
a. Maximium production
b. Marginal production
c. Average production
d. Minimum production
a. TR> AR
b. AR> AC
c. MR> MC
d. TR> TC
2.In a perfectly competitive market a profit maximising firm is
a. A price-searcher
b. A price- taker
c. A price-maker
d. A price avoider
6.Profit maximising model is of the view that the success a firm depends on
a. sales maximisation
b. profit maximisation
c. Market share expansion
d. Growth maximisation
7.Slack payment implies
a. Rs.14.
b. Rs.10.
c. Rs.9.
d. Rs.15.
2.Suppose that the price of a product is Rs.6 and the elasticity is 3 at that price MR will
be
a. 6.
b. 2.
c. 4.
d. 3.
3.To sell an additional unit of the commodity, seller
4.A firm under perfect competition will not produce any output unless the price is at least
equal to the minimum
a. AFC.
b. MC.
c. AC.
d. AVC.
5.An individual firm forms to be a very small portion of the market , not in a position to
influence market output or price under
a. Oligopoly.
b. Imperfect competition.
c. Perfect competition.
d. Duopoly.
a. Reasonable profit.
b. Subnormal profit.
c. Abnormal profit.
a. Economic zone.
b. Maximum loss zone.
c. Normal profit zone.
8.If the price is equal to AVC the firm will not be able to cover its fixed cost and suffers
loss.
b. It will continue in business with the hope that the price may go up in future.
c. It will reduce its output
d. It will expand its output.
9.If the price of the product is inadequate to cover either the AFC or the AVC the firm
will have to
10.In order to maximize its benefit an economic unit always has a tendency to move
towards
12.The market situation which acts as a yardstick against which all other models can be
compared and evaluated is
a. Duopoly.
b. Monopoly.
c. Monopolistic competition.
d. Perfect competition.
13.There is absolute freedom for the firms to enter or quit the industry under
a. Imperfect competition.
b. Bilateral monopoly.
c. Oligopoly.
d. Perfect competition.
a. Low
b. Very high
c. Very low
d. High
2.In which case consumers' surplus will be more?
a. Cost
b. benefit
c. When both are less
d. Benefit> cost
e. Cost > benefit
d. Rich nations
4.There is
5.There is a direct and definite relationship between expected and realised satisfaction
a. Always
b. Some cases
c. None of the above
d. Difficult to say
6.There is a direct relationship between price and consumers' surplus in case of
a. Independent goods
b. Comforts
a. prices existing at the base year and the prices in the current year
b. Price data from retail outlets
b. Smaller amount.
c. Greater amount.
d. Proportionate rate.
a. Stable.
b. More.
c. Unstable.
d. Less.
4.Rising MPC during depression and declining MPC during boom explain the
a. Equals 1.
b. Is greater than 1
c. Equals aggregate income.
d. Is less than 1.
Unit12 - 2 Mark Quiz Questions
1.A cheap money policy refer to
3.Countercyclical measures and the measures adopted to compensate for the predicted
changes in employment and output to improve community welfare are referred to as
a. Stabilization policy.
b. Monetary policy.
c. Fiscal measures.
d. Physical controls.
4.In order to promote smooth and unhindered international trade and free flow of foreign
exchange into a country what should be the objective of monetary policy?
a. Fiscal control.
b. Physical control.
c. Exhortations.
d. Monetary control.
3.Periodic adjustments in money incomes of the people and in the value of financial
assets, saving deposits etc., held by the public in accordance with the changes in the price
level by the monetary authorities is known as
a. Adjustment.
b. Tuning.
c. Correction.
d. Indexing.
4.When the rise in prices is very slow like that of a snail or creeper it is called
a. Halting inflation.
b. Creeping inflation.
c. Hidden inflation.
d. Limping inflation.
2.Expenditure on national defence, law and order control of terrorism etc are the example
for
a. There is proper balance between short run and long run interests
b. The stocks of various types of resources are maintained and further improved
5.Negative externalities
6.Positive externalities
b. social costs
c. Social costs > social benefits
d. Social benefits> social costs
e. Social benefits
8.The negative externality created by a firm