MB0026 ECO

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() SECTION A (ONE MARKS)

(1) .What is the reasons for the criticism of Marris Growth Maximization Model?
(a) this model does not tell anything about how the prices is determined
(b) they ignore independence in oligopoly market structure
(c) growth rate of the firm cannot be constant
(d) all of the above
Answer : D

(2) .What is the criticism of Sales Maximization Model?

(a) constant price of all products is unrealistic even in short run
(b) production cost is independent of advertisement expenditure
(c) Both a and b
(d) None of the above
Answer : C

(3) .Change in TP caused as a result of additional unit of variable factor employed

to the contribution of fixed factor,
(a) average product
(b) total product
(c) marginal product
(d) all of the above
Answer : C

(4) .What is the main goal of every firm?

(a) production goal
(b) inventory goal
(c) sales goal
(d) all of the above
Answer : D

(5) .What is the various types of cost?

(a) Opportunity cost
(b) Explicit and implicit cost
(c) Sunk cost
(d) all of the above
Answer : D

(6) .They is like shock absorber for the company.

(a) Money payment
(b) Slack payment
(c) Side payment
 (d) None of the above
Answer : B

(7) . They are the payments done to the people between the real owners and the
organization.
(a) Money payment
(b) Slack payment
(c) Side payment
(d) None of the above
Answer : A

(8) .What is the key price leadership?

(a) price leadership of low cost firm
(b) leadership by dominant firm
(c) barometric leadership
(d) all of the above
Answer : D

(9) .What is the features of market structure?

(a) number and size
(b) entry
(c) product differentiation
(d) all of the above
Answer : D

(10) . Which of the given statement is true?

(a) monopolistic is the single producer
(b) monopolist is the sole buyer
(c) there is a single commodity without any close substitutes
(d) all of the above
Answer : D

(11) .What is the features if monopolistic market structure?

(a) large number of buyers and sellers
(b) product differentiation
(c) free entry
(d) all of the above
Answer : D

(12) .What is the features of monopoly?

(a) large number of buyers
(b) free entry and exit of firms
(c) no cost of transportation
(d) barrier for entry of firm
Answer : D
 (13) .What is the degrees if price discrimination?
(a) first degree price discrimination
(b) second degree price discrimination
(c) third degree price discrimination
(d) all of the above
Answer : D

(14) .What is the features if Economist Theory of firm?

(a) a form is a transformation unit
(b) surplus value is nothing but the difference between the value of the
product and the value of the factors of production
(c) Both a and b
(d) None of the above
Answer : C

(15) .What is the features of demand?

(a) only price affect demand
(b) all other factors such as income, taste and fashion is content
(c) Both a and b
(d) none of the above
Answer : C

(16) What is the types demand forecasts?

(a) short term
(b) long term
(c) both a and b
(d) None of the above
Answer : C

(17) What is the concept of managerial economics?

(a) means economics necessary to be understood for running any business
(b) lays more emphasis on the managerial function in any business firm
(c) Both a and b
(d) None of the above
Answer : C

(18) What are the types of survey?

(a) expert's opinion
(b) interview
(c) collective opinion
(d) all of the above
Answer : D

(19) What is the various types of elasticity if demand?

(a) price elasticity
(b) income elasticity
 (c) cross elasticity
(d) all of the above
Answer : D

(20) What is the features of managerial economics?

(a) the integration of economy theory with business practice to facilitate
decision making and forward planning
(b) the use of economic analysis in the formulation of business policies
(c) both a and b
(d) None of the above
Answer : C

(21) What are the demand forecasting methods for the new products?
(a) evolutionary methods
(b) subs tuitions method
(c) growth pattern
(d) all of the above
Answer : D

(22) What is the factors affecting demand?

(a) taste
(b) income
(c) price of reacted products
(d) all of the above
Answer : D

(23) . What are the various stages in law of variable proportion?

(a) decreasing returns
(b) increasing returns
(c) positive returns
(d) Both a and b
Answer : D

(24) .What is the criteria for good demand forecasting method?

(a) accuracy
(b) flexibility
(c) availability
(d) all of the above
Answer : D

(25) .What is the objectives of pricing policy?

(a) to maximize profits
(b) price stability
(c) capture the market
(d) all of the above
Answer : D
 (26) .When the production is more than that can be sold at any price or profitable
price.
(a) Under production
(b) over production
(c) Both a and b
(d) None of the above
Answer : B

(27) .What is the uses of cross elasticity of demand?

(a) many corporate produce reacted products
(b) to define industry
(c) both a and b
(d) None of the above
Answer : C

(28) .What is factors affecting supply?

(a) change in the cist of production
(b) state of technology
(c) political uncertainty
(d) all of the above
Answer : D

(29) .Which of the given statement is correct in context of equilibrium?

(a) derived from Latin word, which mean equal
(b) the position from which there is non tendency to move
(c) both a and b
(d) None of the above
Answer : C

(30) .What is then important factor influencing advertisement s?

(a) promotional elasticity
(b) the amount a competitor reacts to the firms advertisement
(c) the time interval between the advertisement expenses
(d) all of the above
Answer : D

(31) .____________is TVC at each level of output divided by number of units

produced.
(a) Short run average variable cost
(b) Average fixed cost
(c) Short run average total cost
(d) None of the above
Answer : A

(32) .What is the ways if studying production function?

 (a) law of variable proportion
(b) returns to scale
(c) economies of scale
(d) all of the above
Answer : D

(33) .The total produced by e firm divided by the quantity of variable factors used
to produce.
(a) average product
(b) marginal product
(c) total product
(d) None of the above
Answer : A

(34) What is the scope of managerial economics?

(a) decisions reacting to demand
(b) decisions related to cost and production
(c) decisions reacting to price and market
(d) all of the above
Answer : D

(35) . Demand pull inflation may be caused by:

(a) An increase in costs
(b) A reduction in interest rate
(c) A reduction in government spending
(d) An outward shift in aggregate supply
Answer : B

(36) .What is the features of business cycle?

(a) the fluctuations is wave like movement and is recurrent in nature
(b) the movement from peak to trough and again trough to peak is not
symmetrical
(c) self generating
(d) all of the above
Answer : D

(37) .When the demand increases and is in excess of supply of goods and resources
available, the price increases.
(a) walking inflation
(b) demand pulls inflation
(c) peace time inflation
(d) war and post war inflation
Answer : B

(38) .This phase is a phrase of low economic activity.

(a) prosperity
 (b) depression
(c) recession
(d) all of the above
Answer : B

(39) . What are the phases of business cycle?

(a) prosperity
(b) depression
(c) recession
(d) all of the above
Answer : D

(40) .What is the causes of demand pull inflation?

(a) deficit financing
(b) population
(c) black money
(d) all of the above
Answer : D

() SECTION B
(41) .The rate at which production, consumption, sales etc take place between two
points.
(a) Capital
(b) Flow
(c) Investment
(d) None of the above
Answer : B

(42) .What is the various types of revenues?

(a) total revenue
(b) average revenue
(c) marginal revenue
(d) all of the above
Answer : D

(43) .What is the practical limitations of Accusation Principle?

(a) no excess capacity
(b) surplus capacity
(c) nature of demand
(d) all of the above
Answer : D

(44) .What is the activities of consumer that effect the environmental degradation?
(a) crime acts
(b) ill-treating animals
(c) creating noise pollution from using the car stereos
 (d) all of the above
Answer : D

(45) .This is reacted to production and output decisions

(a) Inventory goal
(b) Production goals
(c) Profit goal
(d) market share goals
Answer : B

(46) In_____________is the category that is molts utilized in managerial

economics.
(a) micro economics
(b) macro economics
(c) Both a and b
(d) None of the above
Answer : B

(47) What is the exceptions for law of supply?

(a) to clear the stock the seller may sell even the prices is low, but it usually
happens in the short run
(b) change in taste and habits also affects the supply of any commodity
(c) change in technology affects the cost of production and the supply is
influenced in the long run
(d) all of the above
Answer : D

(48) .This is related to demand of members connected with sales.

(a) Inventory goal
(b) sales goals
(c) Profit goal
(d) market share goals
Answer : B

(49) .Thus is reacted to demand of sales management and sales decisions.

(a) Inventory goal
(b) Production goals
(c) Profit goal
(d) market share goals
Answer : D

(50) .What is the key features of bilateral monopoly?

(a) seller has the control over the price
(b) aims at maximum consumer' surplus
(c) single producer meets a single buyer
(d) None of the above
 Answer : C

(51) This is reacted to demand of members in relation to inventory and decisions in

output and sales is.
(a) Inventory goal
(b) Production goals
(c) Profit goal
(d) market share goals
Answer : A

(52) .According to the supply-side model, a reduction in the tax rate

(a) could reduce the size of any budget deficit
(b) would have no effect on output
(c) would have no effect on consumption
(d) none of the above
Answer : A

(53) . The estimated benefits from a capital budgeting project are expected as cash
flows rather than income flows because__________.
(a) it is more difficult to calculate income flows than cash flows
(b) it is cash, not accounting income, that is central to the firm's capital
budgeting decision
(c) this is required by the accounting profession
(d) this is required by the Internal Revenue Service (IRS) and enforced
through filings with the Securities and Exchange Commission (SEC)
Answer : B

(54) .The quantity theory of money allows monetarists to obtain a number of

economic predictions by assuming a constant
(a) velocity of money
(b) nominal output
(c) overall price level
(d) stock of money
Answer : A

(55) . The basic capital budgeting principles involved in determining relevant

after-tax incremental operating cash flows require us to__________.
(a) include effects of inflation, but ignore project-driven changes in working
capital net of spontaneous changes in current liabilities
(b) include effects of inflation, and include project-driven changes in working
capital net of spontaneous changes in current liabilities
(c) ignore both the effects of inflation and project-driven changes in working
capital net of spontaneous changes in current liabilities
(d) ignore the effects of inflation, but include project-driven changes in
working capital net of spontaneous changes in current liabilities
Answer : B
 (56) . In regards to the sale or disposal of a depreciable asset, "recapture of
depreciation" is .
(a) any amount realized in excess of its depreciated (tax) book value
(b) any amount realized in excess of its original depreciable basis
(c) any amount realized in excess of its depreciated (tax) book value, but less
than its original depreciable basis
(d) any amount realized from the sale of the asset
Answer : C

(57) . Which of the following is not a difficulty when estimating replacement cost?
(a) Second hand markets may exist
(b) Technological advances make old assets inferior
(c) The asset may have been custom built
(d) Discounts on purchase price of assets are uncertain
Answer : A

(58) .It is not more than 3% and not at all dangerous, (a) walking inflation
(b) demand pulls inflation
(c) creeping inflation
(d) war and post war inflation
Answer : C

(59) .What is the limitations of Schumpeter theory?

(a) assumption of full employment is unrealistic
(b) bank is not the only source of finance for every innovation in business
(c) Both a and b
(d) None of the above
Answer : C

(60) .___________is the minimum amount of liquid assets maintained by the

banks.
(a) cash reserve ratio
(b) statutory liquidity requirement
(c) minimum reserve requirement
(d) all of the above
Answer : B

() SECTION C
(61) ._______levels which is actually achieved.
(a) ex-post
(b) ex-ante
(c) both a and b
(d) None of the above
Answer : A
 (62) .A price index that measures the average level of the prices of all goods and
services that makes up GDP.
(a) cost of living
(b) GDP inflator
(c) saving function
(d) all of the Above
Answer : B

(63) ._____________is defined in economics as the position of rest or a state of

balance.
(a) ex-post
(b) flows
(c) equilibrium
(d) stocks
Answer : C

(64) .____________is used for income on land.

(a) political rent
(b) economic rent
(c) tax
(d) None of the above
Answer : B

(65) ._________is costs that will not change with any kind of changes.
(a) Opportunity cost
(b) Explicit and implicit cost
(c) Sunk cost
(d) direct cost
Answer : C

(66) .What is the assumptions of Law of Variable Proportion?

(a) the state of technology is given
(b) only one factor of production must be variable
(c) there are some inputs, which is kept consistent or fixed
(d) all of the above
Answer : D

(67) .In perfect completion, the demand curve is___________line.

(a) vertical
(b) parallel
(c) perpendicular
(d) horizontal
Answer : D

(68) .According to___________, the new firm starts with a very low price
composed to the already existing firms.
 (a) skimming price
(b) low penetration pricing
(c) pioneering pricing
(d) all of the above
Answer : B

(69) .____________can be getting by dividing the total revenue with the number
of units sold.
(a) total revenue
(b) average revenue
(c) marginal revenue
(d) None of the above
Answer : B

(70) .__________is these costs that are involved in actual payment to the other
parties.
(a) Opportunity cost
(b) Explicit cost
(c) Sunk cost
(d) direct cost
Answer : B

(71) .During periods of negative demand shocks, deficit target reductions such as
those mandated in the Gramm-Rudman-Hollings Act would tend to:
(a) stimulate the economy and increase employment.
(b) result in additional recessionary declines in employment and income.
(c) stimulate defense spending.
(d) have an automatic stabilizing impact upon the economy.
Answer : B

(72) .The market price of bonds can fluctuate depending on

(a) how many bonds were sold
(b) who bought the bonds
(c) the amount of the coupon
(d) the interest rate
Answer : D

(73) .Employment tends to_______when aggregate output

(a) rise, falls
(b) rise; rises
(c) falls; rises
(d) not change; falls
Answer : B

(74) . Which of the following is not a likely organisational objective for a plc?
(a) Profit maximisation
 (b) To become largest organisation in terms of sales revenue
(c) Full employment for employees
(d) Increased market share
Answer : C

(75) . A van is purchased on 1 January 2001 for Rs.50,000 when the price index
was 80. Its current value on 31 December 2004 when the price index is 130 would be:
(a) Rs.81,250
(b) Rs.96,500
(c) Rs.30,769
(d) Rs.65,000
Answer : A