MB0042 Managerial Economics Q.

1 _____ and ____ define managerial economics as this application of economic theory and methodology to business Administration. A-: Brighman & Pappas. B-Yoke,Dale C- Sagar,Padhi ,D-None Q.2 Which of the followings include the features of managerial Economics? a) b) c) d) It is more realistic It is a science of decision making It is both conceptual and metrical It uses various macro-economics A. abc B. bcd C. acd D. abcd

Q.3 which of the followings include the scope of managerial economics? I. Objectives of a firm II. Demand analysis and forecasting III. Production & cost analysis IV. Pricing decision, policies & practices V. Capital management VI. Linear programming & theory of Games VII. Profit management A. I, II, III, IV, V, VI, VII C. IV, V, VI, VII Q-4-Demand = Desire to buy + Ans : a-Ability to Pay, Willingness to pay Q-5-Features of Demand? State True/False I. It is backed up by adequate Purchasing power. II. It is always of a price III. It should always be expressed in terms of specific quantity. IV. It is related to time A. all are False B. only I, II False C. All are true D-None 1? B. I, II, IV, V, VI, VII D. None + 2?

Q-6-DX = f (Px, Ps, Pc, Ep, Y, 1?, 2?, 3?, 4?, 5? .. etc ) Ans: Ey, T, W, A, U 1, 2, 3, 4, 5 Q-7 which of the followings are the factors that affecting of influencing the Demand? I. General price level existing in the country inflation II. Level of income and living standards of the people III. Level of income & living standards of the people IV. Weather & climatic conditions V. Publicity, propaganda & advertisement VI. Tastes, preferences, VII. Size, rate of growth of population A All b-I,ii,iii C-VI,VII D-None Q-8- A consumer would buy more when price falls due to the following reasons. They are _______ 1. 2. 3. 4. A Product becomes cheaper Purchasing power of a consumer would go up Consumers can save some amount of money Cheaper products are substituted for costly products A. 1 2 3 B. 2 3 4 C. 1 2 3 4 D. None

Q-9- which of the followings include the five kinds of elasticity of Demand? i. ii. iii. iv. v. vi. A. all Price elasticity Income elasticity Cross elasticity Promotional elasticity Substitution elasticity Demand elasticity B. only I, II, IV, V C. only I, II, III, IV, V D. None

Q-10- State True/False regarding the practical application of price elasticity of Demand? 1. 2. 3. 4. Production planning Operation planning Helps in fixing the prices of different goods Helps infixing the rewards for factor inputs

5. 6. 7. 8.

Helps in determining the terms of trade Helps in fixing the rate of taxes Helps in declaration of public utilities Poverty in the midst of plenty A. 1 2 3 4 F, 5 6 7 8 - T C. 1 2 3 F, 4 5 6 7 8 T B. 1 2 3 4 5 6 7 8 T D. None

Q-11- which of the followings are the Practical application of income elasticity of Demand? I. Helps in determining the rate of growth of the firm II. Helps in production planning & marketing III. Helps in ensuring stability in production IV. Helps in estimating construction of houses A. I, II, III Q. 12- Ec =
Dx Py x Py ?

B. II, III, IV

C. I, II, III, IV D. I, II, III, IV, V

Ans: Dx Q-13- which of the followings are the practical application of advertising elasticity of Demand? i. Helps in determining the level of prices ii. Helps in formulating appropriate sales promotional strategy. iii. Helps in manipulating the sales Ans:A- All I, II, III B-II,III C-I,II D-None Q.14- which of the following features are important in demand forecasting? I. It is based on historical information II. It is in terms of specific quantities III. It is based on specific department IV. It is based on specific commodities Ans:A- All I, II, III B-II,III C-I,II D-None

Q-15- Long run forecasting of probable demand for a product of a company is generally for a period of 3 to 5 or 10 years. They are ________? I. Business planning. II. Financial planning. III.Manpower planning. IV. Business control. V. More successful in case of developed nations. VI. Determination of the growth rate of the firm. VII. Establishment of stability in the working of this firm. VIII. Indicates interdependence of different industries. A all B- Only I,ii c-only iii d-None Q-16- A good method of demand forecasting should satisfy a few board economic criteria, they are as follows __________. a) b) c) d) e) f) g) h) Accuracy Plausibility Simplicity Durability Flexibility Availability of data Economy Quickness A. a b c d e B.a b c d e f C. a b c d e f g h D. a b c d

Q-17- State True/False regarding the success depends on many factors. 1. 2. 3. 4. 5. 6. 7. 8. The nature of the question asked The ability of the surveyed The representative of the samples Nature of the product Characteristics of the market Consumer-buyers behavior Techniques of analysis Conclusions drawn B. 1346 F, 2578 T D. 1458 T, 2367 - F

A. 1234 F, 5678 - F C. 12345678 - T

Q-18-A statistician in order to find out the pattern of change in time series many makes use of the following methods. They are __________? a) The least squares method

b) The free hand method c) The moving average method d) The method of semi-averages A. abc B. bcd C. abcd D. None

Q.-19- y = a+bx fit to ________ method Ans : the least square method. Q-20-Professor Joel Dean, how ever has suggested a few guidelines to make forecasting of demand for new products. They are ____. I. Evolutionary approach II. Substitute approach III. Opinion poll approach IV. Sales experience approach V. Growth curve approach VI. Vicarious approach A. I, II, III B. II, III, IV C. I, II, III, IV, V, VI D. I, II, III, IV, V

Q-21-Mathematically a supply function can be represented in the following manner.

Sx=f(Pf,T,Cp,Gp,N,etc)

Q.22- Which of the followings are the Determinants of supply? I. Natural factors II. Change in techniques of production III. Cost of production IV. Prices of related Goods V. Government policy VI. Monopoly power VII. Number of sellers or firms VIII. Complementary goods IX. Discovery of new source of inputs X. Improvements in transport and communication XI. Future rise in price A. I, II, III C. I, II, III, IV, V, VI, XI B. I, II, III, IV, V, VI, VII, IX, X, XI D. I, II, III, IV, V

Q23-The other things which should remain constant further law to operate are _____ 1. 2. 3. 4. Techniques of production Cost of production Market prices of the related goods Climate & weather conditions

A. 1 2 3

B. 2 3 4

C. 1 2 3 4

D. 1 3 4

Q.24

Price elasticity

Which type of

Of supply

Q-25- Which of the following factors Determine Elastic Of supply C.D exterminates)? (a)Number of sellers (b)Goals of the firm (c)Political conditions (d)Cost of Production (e)Kinds and nature of markets (a)abcd (b) abcde (c) abc (d) bcde

Q-26. Which of the followings are the Causes for Diminishing Returns to scale? 1-Emergence of difficulties is Co. Ordinations Control Q-27- Which of the followings are the Properties of ISO-quanta? (a) Generally on 150-Quanta (b)It will not touch either XOR-axis (c) Always are 150-quart Curve rewrite be parallel to other A- ab B-abc C-ca D-None

Q27.Which of the followings is some of the important aspects of Internal Economics. 1-They arise With in or inside a firm. 2-They arise one to improvements is internal. 3-They arise one to specified efforts of one firm. 4- They are Particular to a firm and enjoyed by only one firm. 5. They arise one to increase in the scale of Production

A- 123 B-1234

C-12345

D-None

Q-28.state T/F regarding the Technical economic 1-Economies of superior techniques 2-Economies of increased dimension 3-Economies of lined Process 4-Economies arising out of research and by Products. 5-Inventory Economies 6-Delegation of Details A- 123-T, 456-F B- 1234-F, 56-T C-12345-T, 6-F D- None

Q-29. Which of the followings are the four ways risk- spreading advantages in a Large Secure firm? (a) Diversification of out put (b) Diversification of market (c) Diversification of the Sourly of supply (d) Diversification of the Process of manufacture (e) Diversification of resource of demand A- abcd B-bcde C-abc D-None

Q-30. Which of the followings are same of the important aspects of external economies? 12345678They arise Outside the firm They arise due to important In external factors They arise due to Collective efforts of an industry They are general , Common & enjoyed by all firms They arise due to Over all developments They are dependent on the size of industry They are beyond the Control of management of a firm They are Called as Open secrets of a firm B-2345678 C-1234 D- 345678

A- 12345678

Q-31-Which of the followings are same of the main Diseconomies of scale? 123456Financial diseconomies Managerial diseconomies Marketing diseconomies Technical diseconomies Diseconomies of risk and Uncertainly bearing Labour diseconomies

Q-32 which of the following factors deserve our alternation in the Determinants of Cost? I. Technology II. Rate of output III. Size of plant and scale IV. Prices of factor inputs V. Efficiency of factors of production and the management. VI. Stability of out put VII. Law of returns VIII. Time period A- I,ii,iii B- all C- I,ii,iii,iv D-None

Q-33. Types of cost Function (a) Short run cost function (b) Long run cost function Q34.TFC=TC-TVC Q-35.ALC=AFC+AVC Q-36 AVC=AC-AVC AVC=AC-AFC MC-Tcn-tcn-1 TC=TFC+TVC Q-37-The profit maximization model is based on Three important assumptions .They are an follows(1) Profit maximization is the main goal of the firm (2) Rational behavior on the Part of firm (3) The firm is managed by owner-entrepreneurs (4) The firm is managed by a Trust A- 123 B-234 C-124 D-None Q-38- Cyert & March are of the opinion that out of Several Objectives a firm has five import ants goals They are(a) Production goal (b) Inventory goal (c) Sales goal (d) Market- Share goal (e) Profit goal A- abcd B- abcde C- abc D- bcde

Q-39- Which of the followings assumptions on which the static model based on? (I) The model is applicable to a Particular time period.

(II) The firms aim at maximizing its sales revenue subject to minimum Profit Constant (III) The demand Curve of the firm slope downward from left to right. (IV) The averages cost curve of the firm is U-shaped as A-all B-II,III C-I,II D-None Q-40-state T/F regarding the sales maximization (Dynamic Module) (a) Market Price remains Constant (b) Demand and Cost Curve of the firm ore conventional nature (c) Higher advertisement expenditure would certainly increase sales revenue of a firm. A- a-F, b-F, c-T Q-41. U=f [s,m,d] Where U=Managers utility function A= Additional expenditure to staff M= Managerial Emoluments Id=Discretionary investment Q-42-Which of the followings are the three concepts of Revenue. They are_____________ (I) (II) (III) (IV) A- I, ii, iii Total Revenue Average Revenue Marginal Revenue Grid Revenue B- ii, iii C-I, ii D-I, iii, iv B- a-t, b-T, c-f C- abc-T, D- None

Q 43. Broadly speaking the various factors & farces that affect the price are divided into______________categories ANS- 2 Q-44.External of factors & forces that affect the price due________ i. Demand, Supply

ii. Size of the market iii. Goal will, hand, iv. Elasticity of demand & Supply v. Social Consideration vi. Buyers behavior in respect a particular product vii. Competitors Pricing policy viii. Availability of substitutes and complements A-all, B-only ii, iii, C-all vii, viii D-None

Q-45- Which of the following include Objectives of the price policy? (i) (ii) (iii) (iv) (v) (vi) (vii) Profit Maximization in the short team Capturing the markets Entry to new market Entry into new market Deeper penetration on the market Achieving a target return Facing compete time situation B-I, ii C-ii, iii D-None

ANS- A-all,

Q-46-Which of the followings is the Objectives of the Administered Price? (a) To protect the interests of weak ere sections against wish prices. (b) To curb or encourage the consumption of certain common ditties (c) To contain inflation and ensure price stability (d) To counter stagflation and consequent recession (e) To mobilize revenue for the government (f) To ensure efficient allocation of resources among diff user Ans:-A- abc B-bcde C-abcdef D-None

MB0042 ManagerialEconomics Q2.Whichofthefollowingsarethetypesofinflation? (a) (b) (c) (d) (e) Creepinginflation Walkinginflation Runninginflation Hyperinflation Demandpullinflation

a allabcdeBabCdcDNone Q3.Whichofthefollowingsarethepositivesidesofeffectsofinflation? IItleadstoriseininvestment IICreatesbetteropportunities IIIEncourageentrepreneurship IVInflationtax VFullutilizationofresources VILeadstoincreaseindemandformoney VIIItisnecessarycostofdevelopment a I,II,III,IV,V,VI,VIIBI,II,IIIciv,vdNone Q4.Whichofthefollowingsaretheexternaleffectsofinflation? 1Reducesthevolumeofexports 2Createexchangeratedifficulties 3Discouragetheinflowofforeigncapital 4Declingininternationalcompetence A 123, B34, C234, D1231 Q5.Whichofthefollowingsaremeasurestowipeoutinflationarygap?StaleT/Fstatement 1Increaseinsavingstoaddaggregatedemand 2Increseinsavingstoreduceaggregatedemand 3Raisetheoutputtomatchthedisposableincome. 4Raisethefaxestomopuptheexcesspurchasingpower A 123F,4T B123T,4F C1F,234T DNone Q6Environmentaldamagesmaybeinthefollowingcategoriestheyareonfollows_________.

Waterpollution Airpollution Sailpollution Deforestation Lossofbiodiversity Solidandhazardouswastes AAbcdef Badbc Cabc DNone Q7.Whichofthefollowingsaretheadverseeffectsofglobalwarning? (I)Itcausesclimaticchanges (II)Itresultsinmeetingice (III)Itleadstoachangeoncroppatter A I,II,III BII,III CI,II DNone Q8Whichofthefollowingsaretheadverseeffectsofacidrain? (I)Haveilleffectsonvegetation (II)Haveilleffectsonsoils (III)Haveeffectsonmoments (IV)Haveilleffectsonman AI,II,III,IVBI,IICII,III,IVDNow Q9StateT/Fregardingthecharacteristicsofmonopolisticcompetition? 1Existenceoflargenumberofforms 2Manietischaracterbyimperfections 3Freeentry&exitoffirms 4Moreelasticdemandcure 5Nonpricecompetition 6Productdifferentiation Ans:1,2,3,4,5,6 Q10.WhichofthefollowingareT/Fregardingdumpingpolicyadoptedbythefollowing reasons. (I)Togetridofexcessproduction (II)Tocrushrivalsinthedomesticmarkets (III)Toreaptheadvantagesofincreasingreturnsintheindustry. (IV)Totaketheadvantageofdifferencesindisticityofdemandindifferentmarkets (V)Toexplorenewmanuts

(a) (b) (c) (d) (e) (f)

 (a)IF,IIF,IIIT,IVF,VF (b)IT,IIF,IIIT,IVT,VT (c)Allarefalse (d)None Q11Y P SAC AR Q Price OutputM X Heretheshows(a)AR>AC (b)AR=AC (c)AR<AC (d)Now Q12whichofthefollowingsarethepriceoutputdeterminationundermonopoly? (a) Themonopolyfirmaimsatmaximiningitstotalprofit (b) ItiscompletelyfreefromGovtcontrols (c) Itchargesasingle&uniformhighpricetoallcustomers Aall Bonlyb,c Conlya,c DNone Q13.Whichofthefollowingsincludethefeaturesofmonopoly? IAutithesisofcompetition IIExistenceofasingleseller IIIAbsenceofsubstitute IVControloversupply VPricemaker VIEntrybarriers VIIFirm&industryissame VIIINatureoffirm Aall,I,II,III,Ball ConlyII,V,IV,VI, DNone Q14.Whichofthefollowingsarethecharacteristicsofoligopoly? (I)Interdependence (II)Indeterminatenessofthedemandcure (III)Conflictingattitudeoffirms (IV)Elementofmonopolyandcompetition (V)pricerigidity

 (VI)Aggressiveordefensivemarketingmethods (VII)Constantstruggle (VIII)Lockofuniformity Aall BonlyII,III, ConlyII,IV DNone Q15Whichofthefollowingsaretheadventagesofpriceleadership? (I)Itensuresthespritoflive (II)Itisasimpleandeconomicalmethod (III)Ithelpsthesmallfirmstoformulatetheirpricepolicy (IV)Itensuresstabling Aall BonlyII,III ConlyI,III DNone Q16. Y=C+_______? Ans:S Q17S=F(___) Ans:Y Q18__________refertothatportionoftotaldepositsofcommercialbankswhichhas tobekeptwithRBI ACRRBBVRCBJIDNONE Q19.GNPDeflator=PINofthechosenyear 100 Q20RealGNP= NominalGNP PINcy/100 Q21.Keynespsychologicallawofconsumptionconsistsofthreeinterrelatedprepositionsthey are_________? (I)Whentheaggregateincomeincreases,expenditureonconsumptionwillalsoincrease butbyalargerunit. (II)Whentheaggregateincomeincreases,expenditureonconsumptionwillalso increasebutbyasmalleramount. (III)Theincreasedincomeisdistributedoverbothspendingandsaving. (IV)Asincomeincreases,bothconsumptionspendingandsavinggoup. aII,III,IVbI,iiconlyIdNone Q22whichofthefollowingsarethetechnicalcharacteristicsofMPC.StateT/F? (I)MPCgoesondownasincomedecreases. (II)MPCofthepoorasincomedecreases. (III)InshortrunMPCisstable. (IV)MPC>0 (V)MPCmayrise,fallorremainconstant,dependingonmanyfactorsbothsubjective andobjective. A IF,IIF,IIIF,IVT,VF B IF,IIT,IIIT,IVT,VT Q23_________and________factorsintriguetheconsumptionfunction.

 A Narrative&OperativeBSubjective&objectivecBasic&OperativeDNone Q24.Whichofthefollowingsaretheimportantofconsumptionfunction? (I)Itinvalidatessagslawofmarkets. (II)Ithiswishlightstheimportanceofinvestmentintheemploymentmeanttheory. (III)IthelpstoexplainthefumingpaintsofthebusinessCycle. (IV)Ithelpstoexplaintheconceptofsecularstagnation. (V)IthelpstoexplainthedecliningtendencyofMEC. (VI)Itupholdsthestateintervention. (VII)Ithelpstoexplaintheconceptunderemploymentequilibrium. (VIII)Ithelpstofindoutthevalueofmultiplier. Ans:Aall BonlyII,III ConlyI,II DonlyI,IV,V Q25 K= I______ IMPC Q26.AccordingtoKeynesspeaksof5typesofinvestment,theyare__________. (I)publicinvestment (II)Privateinvestment (III)Foreigninvestment (IV)Inducedinvestment (V)Autonomousinvestment (VI)Complexinvestment AI,II,III,IV,VI BII,III,IV,V,VI CI,II,III,IV,V DNone Q27Theinvestmentcurveis_____________. Ans:perfectlyelastic Q28.Matchthefollowings SetI SetII (a) Grossinvestment (I)(grosscapital)investment (b) Replacementinvestment (II)anadditiontocapitalstockofcounting (c) Netinvestment (III)replacingtheoldcapitalequipments (d) Exautoinvestment (IV)theinvestmentthatisintended (e) Expostinvestment (V)actualorrealizedinvestment A aV,bIII,cIV,dII,eICaV,bIII,cIV,dI,eII B aII,bIII,cI,dIV,eVDaV,bI,cIV,dII,eIII Q29WhichofthefollowingsarethedeterminantsofMEC. IShortrunfactors IICostandprice

IIIHigherpropensitytoconsume IVChangesinincome VCurrentstateofexpectations VIStateofbusinessconfides a all bonlyII,III, cI,II,III,V DNone

Q30.StateT/Fregardingthelongtermexpectationwhichisinfluencedbythefollowing factors. IThestateofconfidence IIStockexchangevaluation IIIIrrevocabledecisions IVElementsofinstability VIBehaviorsofinvestors aallarefalse bIF,IIF,IIIT,IVT,VT,VIT callaretrue dNone Q31Whichofthefollowingsaretheprerequisiteconditionstortheworkingofthe multiplier? IExistenceofinvoluntaryunemployment IIExistenceofanindustrialeconomy IIIExistenceofexcesscapacityinconsumergoodsindustries IVExistenceofelasticsupplyofotherfactorinputsinthemarket AallI,II, Ball ConlyII,III, DNone Q32.Whichofthefollowingsaretheleakagesinthemultiplier? (a) Savings (b) Accumulationofidlecashbalances (c) Debtcorrelations (d) Purchaseofoldsharesandstocks (e) Imports (f) Priceinflation (g) Taxes (h) Corporatesavings Aabcd Babcdefgh Cabc Dbcdefgh Q33Accretionscoefficient A= I/ C Q34Thisisthroughtheseparameters,themonetarypolicyhastooperate.

ITotalmoneysupplyavailableinacountry IICostofborrowings IIIThenatureofcreditcontrolmeasures AallII,III BonlyI, CallI,II,III DNone

Q35.Whichofthefollowingsarethegeneralobjectivesofmonetarypolicy? INeutralmoneypolicy IIPricestabling IIIExchangeratestabling IVControloftradecycles VFullemployment VIEquilibriuminthebalanceofpayments VIIRapideconomicgrowth A allI,II,III,IV,V,VI,VII Q36.Thefollowingsobjectivesofmonetarypolicybeconsidersinthecontextofdeveloping countries. (a) Developmentrole (b) Effectivecentralbanking (c) Inducementtosavings (d) Investmentofsavings Aabcd Babc Cbcd DNone Q37.Whichofthefollowingsaretheinstrumentsoffiscalpolicy? (a) Publicrevenue (b) Publicexpenditure (c) Publicdebtorpublicborrowingpolicy (d) Deficitfinancing (e) Bwiltinstabilizersoraautomaticstabilizers Aabcde Babcd Cbcde DNone Q38Whichofthefollowingsaretheobjectivesoffiscalpolicy? ITohelpinoptimumallocationofscareresourcesanditsmaximumutilization IIToacceleratetherateofcapitalformation IIIToencourageinvestment IVToensurepricestability VTocontroltheoperationofbusinesscycles VIToensurefullemploymentcondition

VIIToacceleratetherateofeconomicgrowth VIIIToensureequitabledistributionofincomeandwealth IXToreduceandminimizeregionalandsectoralinbalances XTomobilizereal&financial,resourcesforpublicsectorinlargerquieting AallI,II,III, Ball ConlyII,III, DNone

Q39Whichofthefollowingarethethreeformsofdirectcontrol? (a) Controloverconsumptionanddistributionthroughpricecontrol&rationing (b) Controloverinvestmentthroughlicensing. (c) Controloverforeigntrade. AabcBabCacDNone Q40.Whichofthefollowingaretheadvantagesofdirectcontrols? (I)Directcontrolsuppressesindividualinitiating&espies. (II)Theycanbeintroducedquicklyandeasily (III)Directcontrolscanbemorediscriminatorythanmonetaryandfiscalcontrols (IV)Therecanbevariationintheintenselyoftheoperation Aall Bonlyii,iii cOnlyI,iii Dnone Q41.StateTruestatementsfromthefollowings. 1 Aperiodofupswingfollowedbyaperiodofdownswing 2 Aperiodofprosperityalternatingwithpoverty. 3 Aperiodofboomfollowedbyaperiodofslump. 4 Aperiodofexpansionfollowedbyaperiodofcontraction. A123T,4F B1234T CNow Donly1 Q42Whichofthefollowingsarethecharacteristicsofbusinesscycle?. (I)Itisawarelikemovement (II)Itissynchronicinnature (III)Itoccursperiodically (IV)Itisselfgenerating (V)Itisinternationalincharacter Aall BonlyII,III, ConlyI,II, DNone ******************************************