Managerial Economics

MANAGERIAL ECONOMICS


1. Managerial economics is a a) Scienceb) Artsc) Both a and bd) None

Ans. a

2. “Managerial economics is the integration of economic theory with business practice for the purpose of facilitating decision making and forward planning by the management” it is expressed by

a) Spencer and seigelmanb) Mc Nair c) Meriand) None

Ans. a

3. Main objective of the firm is a) Social welfareb) Profit maximizationc) Survived) All

Ans. b

4. --------- planning implies planning in advance for the future

a) Forwardb) Backwardc) Futured) None

Ans. a

5. Managerial economics is a --------- subjecta) Mathematicb) Practicalc) Theoreticald) None

Ans. b

6. Managerial economics helps in the --------- use of scarce resources of a firm to maximize its profits

a) Maximumb) Optimumc) According to cost d) All

Ans. b

7. Managerial economics also helps in

a) Industry leadershipb) Market share expansionc) Social responsibilitiesd) All

Ans. d

8. Managerial economics helps in forecasting of

a) Supplyb) Pricec) Profitd) All

Ans. d

9. Managerial economics is mainly a -------- science

a) Prescriptiveb) Subjectivec) Objectived) None

Ans. a

10. Managerial economics is makes an attempt to explain how various economic concepts are usefully employed in ---------

a) Managementb) Staff managementc) Business managementd) All

Ans. c

11. ---------- is basically a branch of ----------?a) Economics, scienceb) Economics, artsc) Managerial economics, microeconomicsd) Managerial economics, macroeconomics

Ans. c

12. The managerial economics also use the services of many other sister science like

a) Mathematicsb) Operation researchc) Psychologyd) All

Ans. d

13. Production implies ------------- of inputs into ---------a) Transformation, outputb) Raw material, WIPc) Both a and bd) None

Ans. a

14. The term scope indicates the


a) Area of studyb) Boundariesc) Subject matterd) All

Ans. d

15. Success of any business depends on adequate---------- and proper-------------

a) Capital, financeb) Capital, managementc) Raw material, financed) Raw material, management

Ans. b

16. Two major functions of a managerial economist are ------ and ---------

a) Decision making, forward planningb) Forecasting, sellingc) Production and costd) All

Ans. a

17. State which statement is true for features of managerial economics?

1. It is a new discipline and of recent origin2. it is a highly specialized3. It is mainly a normative science and as such it is

a goal oriented and prescriptive science

a) Only 1 is trueb) 1,2 are truec) 1,3 are trued) All are true

Ans. d

18. Match the followingSet - A

1. Objectives of a firm2. Demand analysis and forecasting3. Production and cost analysis

Set - Ba) How much to produceb) How to producec) Profit maximization

A) 1-c,2-a,3-bB) 1-a,2-c,3-bC) 1-b,2-a,3-cD) None

Ans. A

19. ------------ Helps the business executives to become much more responsive, ------------ and competent to face the ever changing challenges in the ------------- word

a) Economics, realistic, modern business

b) Managerial economics, realistic, modern business

c) Managerial economics, realistic, modern d) None of the above

Ans. b

20. State which statement is true?1. The word ‘decision’ suggests a deliberate choice

made out of several possible alternative2. Decision making is essentially a process of

selecting 3. decision making is a staff function

a) Only 1b) 1,2c) 2,3d) All

Ans. a

21. Demand = a) Desire to buyb) Ability to payc) Willingness to payd) All

Ans. d

22. The graphical presentation of the demand schedule is called

a) Demandb) Demand graphc) Demand curved) None

Ans. c

23. The demand curve has a ----------- slopea) Positiveb) Negativec) Equal to horizontal axisd) All

Ans. b

24. D= a) F(P)b) F(I)c) F(G)d) None

Ans. a

25. The operation of the law is conditioned by the phrase a) Other things being equalb) Other things being changec) Other things being increasedd) None

Ans. a

26. “Demand is a strengthened with a rise in price or weakened with a fall in price” this paradox is given by


a) Veblenb) Giffenc) Robbinsond) None

Ans. b

27. When elasticity is measured over an interval of a demand curve the elasticity is called as an

a) Interval elasticityb) Arc elasticityc) Point elasticityd) Both a and b

Ans. d

28. Perfectly inelastic Demand Symbolized bya) ED = ∞b) ED = 0c) ED>1d) None

Ans. b

29. Relatively inelastic demand is symbolized bya) ED = ∞b) ED>1c) ED<1d) None

Ans. c

30. ----------- goods are those that are considered to be economically interchangeable by buyers

a) Durableb) Single usec) Substituted) Complementary

Ans. c

31. The total quantity of a commodity demanded at different prices in a market by the whole body consumers at a particular period of time is called

a) Market demand scheduleb) Individual demand schedule c) Both a and bd) None of the above

Ans. a

32. A fall in price leads to ----------- in demand and a rise in price leads to --------- in demand

a) Expansion, contractionb) Contraction, expansionc) All of the aboved) None of the above

Ans. a

33. Advertising elasticity refers to the ------------ to change of demand or --------- to change in advertising expenses

e) Responsiveness, salesf) Passiveness, orderg) Both a and bh) None

Ans. a

34. Pe = a) A/Lb) U/Lc) L/Ud) None

Ans. c

Question

35. In the above diagram D1 means

e) Demandf) Backward shiftg) Forward shifth) None

Ans. c

36. In the above diagram D2 meansa) Demandb) Backward shiftc) Forward shiftd) None

Ans. b

37. If demand = 20 and it rise up to 60 and price = 6 and price decrease up to 4. What is the price elasticity?

i) 6j) -6k) 8l) -8

Ans. b

38.


Match the following according to the above diagramSet - A

1. A2. B3. C4. D5. E

Set - Ba) ED = ∞b) ED = 0c) ED >1d) ED<1e) ED = 1

A) 1-b,2-a,3-c,4-d,5-eB) 1-a,2-b,3-d,4-c,5-eC) 1-a,2-c,3-b,4-d,5-eD) 1-a,2-b,3-e,4-d,5-c

Ans. d

39.

Match the following according to the above diagramSet - A

1. A2. B3. C

Set – Ba) E<1b) E>1c) E=1

A) 1-a,2-c,3-bB) 1-b,2-a,3-cC) 1-b,2-c,3-aD) None

Ans. c

40. Price of tea rises from 4 to 6 per cup and demand for coffee rises from 50 cups to 80 cups, then the cross elasticity of coffee is

a) 1b) 2c) 3d) 1.6

Ans. d

41. Demand forecasting refers to an ------------- of most likely future demand for a product under given condition

a) Estimationb) Hypothesisc) Both a and bd) None

Ans. a

42. Demand forecasting helps in estimating -------- financial requirements

a) Long runb) Short runc) Both a and bd) None

Ans. c

43. Level of demand forecasting isa) Micro levelb) Firm levelc) Industry leveld) All

Ans. d

44. Demand forecast for cotton textile industry supply information to the most likely demand for textile

a) Machineryb) Colourc) Dye stuffd) All

Ans. d

45. In the long run forecasting for a period of a) 3 to 5 yearsb) 10 yearsc) 1 yeard) Both a and b

Ans. d

46. National income is Macro levelIndustry levelMicro levelAll

Ans. a

47. Delphi method is developed by Olaf helmer


DalkyGordonAll

Ans. d

48. The straight line equation is used ina) Trend methodb) Moving average methodc) Least squares methodd) None

Ans. c

49. Yc = a) a + bb) a + cxc) a + bxd) none

Ans. c

50. An Automobile Co., while introducing a new version of a car will study the level of demand for the existing car it is the example of

a) Opinion poll approachb) Growth curve approachc) Both a and bd) None

Ans. b

51. In the diagram given below what is the means of A

e) Trend linef) Salesg) Forecastingh) All

Ans. a

52. ---------- method, efforts are made to collect the relevant information directly from the consumers with regard to their future purchase plans

Survey methodConsumer interview methodBoth a and bNone

Ans. b

53. Survey of buyer’s intentions also calledSurvey of buyer’s preferenceOpinion surveysBoth a and b

NoneAns. c

54. In --------- method, the sale of the product under consideration is projected on the basis of demand surveys of the industries using the given product as an intermediate product.

a) End useb) Input – outputc) Both a and bd) None

Ans. c

55. ------------- Movements indicate the general conditions and direction in which graph of a time series move in relatively a ---------- of time

a) Secular, Long period b) Long run, long periodc) Long run, short periodd) Both a and b

Ans. d

56. ∑xy = e) a∑x + b∑x2 f) a∑x + b∑x g) a∑x + ∑x2h) none

Ans. a

57. Match the following according to the above diagramSet - A

1. A2. B3. C4. D

Set - Ba) Trend projection methodb) Collective opinion methodc) Consumers interview methodd) Economic indicators

A) 1-d,2-b,3-c,4-aB) 1-c,2-b,3-a,4-dC) 1-a,2-c,3-b,4-dD) None of the above

Ans. b


Question

Years 1990 1991 1992 1993 1994sales 30 40 35 50 45

58. In the above question Yc for the year 1993 is a) 32b) 36c) 44d) 48

Ans. c

59. In the above question Yc for the year 1996 is a) 52b) 44c) 48d) 56

Ans. d

60. An ---------- indicates change in the magnitude of an economic --------. It gives the signal about the -------- of change in an economic---------

a) Economic indicator, variable, direction, variableb) Economics , variable, direction, variablec) Economic indicator, variable, amount, variabled) None

Ans. a

61. “The supply of goods is the quantity offered for sale in a given, market at a given time at various prices” this definition is given by

a) Thomasb) Prof. Macconnelc) Both a and bd) None

Ans. a

62. In fish and fruits, supply and stock are the a) Different b) Samec) For fish it is different and for fruits it is samed) None

Ans. b

63. S =a) F(P)b) F(X)c) F(D)d) None

Ans. a

64. Political conditions may disrupt production of a product. In that case, supply tends to become ----------

a) Perfectly elasticb) Perfectly inelasticc) Inelasticd) None

Ans. c

65. Supply curve is a) negative slope b) upward slope

c) positive sloped) both b and c

Ans. d

66. Stock is ---------------a) Supplyb) Potential supplyc) Demandd) Potential demand

Ans. b

67. Supply is different froma) Productionb) Stockc) Both a and bd) None

Ans. c

68. Supply schedule is a ---------- representation of different quantities of a commodity supplied

a) Graphicalb) Diagrammaticalc) Tabulard) All

Ans. c

69. There will be a change is supply when the change ina) Cost of productionb) Monopolyc) No. of sellersd) All

Ans. d

70. Modern economics is sometimes calleda) Demand analysisb) Supply analysisc) Equilibrium analysisd) All

Ans. c

71. Stock is the ----------- of a commodity which can be brought into the market for sale at a short notice and supply means the quantity which is ----------- in the market

a) Total volume, actually broughtb) Actual supplied, actually safec) Both a and bd) None

Ans. a

72. According to the law of supply when price falls, supply will ---------- and when price rises, supply will -----


a) Contract, no changeb) Contract, extendc) No change, extendd) None

Ans. b

73. The supply curve is a ------------- representation of the supply ----------

a) Geometrical, curveb) Geometrical, schedulec) Geographical, scheduled) None

Ans. b

74. The changes in equilibrium price will occur when there will be shift either in

a) Demand curveb) Supply curvec) Both demand and supply shiftd) Shift in equilibrium

Ans. c

75. Supply would be more --------- in the ----------a) Elastic, long runb) Inelastic, long runc) Elastic, short rund) None

Ans. a

76. The --------- of a commodity depends upon the --------- of demand and supply

a) Price, degree of elasticityb) Cost, degree of elasticityc) Sale, degree of supplyd) Purchase, degree of demand

Ans. a

77. Match the following according the above diagramSet - A

1. A2. B3. C4. D5. E

Set - Ba) ES =1b) ES >1c) ES <1

d) ES =∞e) ES =0

A) 1-a,2-c,3-b,4-d,5-eB) 1-a,2-b,3-c,4-d,5-eC) 1-d,2-e,3-c,4-a,5-bD) 1-a,2-b,3-c,4-e,5-d

Ans. C

78.

Match the following according the above diagramSet - A

1. A2. B3. C

Set - Ba) Equilibriumb) Supplyc) Demand

A) 1-a,2-b,3-cB) 1-c,2-b,3-aC) 1-b,2-a,3-cD) None

Ans. d

79.

In the above diagram a) There is a change in market equilibriumb) There is no change in market equilibriumc) Supply is increase demand is decreased) Supply is decrease demand is increase

Ans. b


80.

In the above diagram if the demand shift right it means demand is ---------- If the demand shift left it means demand is ---------- and equilibrium is ----------

a) Increase, decrease, changedb) decrease, increase, changedc) Increase, decrease, no changed) None

Ans. a

81. Factor of production isa) Landb) Laborc) Capitald) All

Ans. d

82. Q = a) f(X,Y,Z ---------- etc.)b) f(A,B,C ---------- etc.)c) f(L,N,K ---------- etc.)d) none

Ans. c

83. The law of variable is also calleda) Law of fixed returnsb) Law of variable returnsc) Law of diminishing returnsd) None

Ans. c84. “As the proportion of one factor in a combination of factors is increased after a point, first the marginal and then the average product of that factor will diminish” this is defined by

a) Prof. Benhamb) Prof. Marshallc) Prof. A.L. bowleyd) None

Ans. a

85. Average output is denoted by

a) AOb) APc) EPd) None

Ans. b

86. Each ISO-Quant curve represents ------- particular level of output

a) 1b) 2c) 3d) 4

Ans. a

87. Expand MRTSa) Marginal ratio of technical substitutionb) Marginal rate of technical substitutionc) Marginal rate of technical solutiond) None of the above

Ans. b

88. The ISO – Quant curve will---------- either X or Y axisa) Touchb) May be touchc) May be touch only Y axisd) Not touch

Ans. d

89. ------- arise “with in” or “inside” the firma) Internal economiesb) Real economiesc) Both a and bd) None

Ans. c

90. Cost is analyzed from the --------- point of viewa) Producer’sb) Manager’sc) Share holder’sd) All

Ans. a

91. ----------- input are those factors the quantity of which remains constant irrespective of the level of output produced by a firm

e) Fixedf) Variableg) Both a and bh) None

Ans. a

92. In, the Law of diminishing returns, that in the beginning ------- will be higher than ---------

a) AP,MPb) MP, APc) TP, AP


d) MP, TPAns. b

93. ----------- is a concept to the -------- line of the consumer

a) ISO – Cost, Demandb) ISO – Quant, Budgetc) ISO – Quant, Priced) ISO – Cost, Price

Ans. d

94. The following diagram is a diagram of ------------

a) Constant return to scaleb) Law of diminishing returnsc) Law of variabled) All

Ans. a

95. When the quantity of all inputs are increased by 10% and output increases by 5%, then we say that --------- is operating

a) Returns to scaleb) Diminishing returns to scalec) Both a and bd) None

Ans. b

96. The advantage or benefits that accrue to a firm as a result of increase in its scale of production are called

a) Economies of scaleb) Internal economiesc) Real economiesd) All of the above

Ans. a

97. A firm produces product A and B separately. Cost of producing 100 units of A is Rs. 8000 and cost of producing 100 units of B is Rs. 5000. If the firm produces both products A and B jointly, in that case, its total cost would be Rs. 10000. Find SC

a) 0b) .2

c) .3d) .4

Ans. c

98.

In the above diagram representsa) Production processb) Production functionc) Both a and bd) Production analysis

Ans. c


1. Stage 12. Stage 23. stage 3

Set - Ba) The total output increases at an increasing rate

and MP decline after thisb) TP Increases at a diminishing rate and both AP

and MP declining but they are positivec) TP starts diminishing AP continues to diminish

and MP becomes negative

A) 1-b,2-a,3-cB) 1-a,2-b,3-cC) 1-a,2-c,3-bD) None

Ans. B

100. State which statement is true?1. ISO – Quant is also called equal product curve2. ISO – Quant is a curve which shows the different

combinations of the two inputs producing the same level of output


3. The above is a curve of ISO – Cost

a) Only 1b) Only 2c) Only 3d) Both 1,2

Ans. d

101. The equation U = f(S,M,Id), U meansa) Managers’ utility functionb) Managers’ unlimited functionsc) Managers’ utility factorsd) None

Ans. a

102. In the q. no. 101, Id stands fora) Discretionary investmentb) Discover investmentc) Discontinue investmentd) All

Ans. a

103. Traditional objective of a firm is a) Profitb) Profit maximizationc) Both a and bd) Social welfare

Ans. b

104. ----------- studies the impact of managerial utility functions on the performance of a firm

a) Boumal analysisb) Williamsonc) Marrisd) None

Ans. b

105. Business decisions are made to cope with a) Maintenanceb) Changec) Bothd) None

Ans. b

106. The full form of MR isa) Marginal requirementb) Managerial revenuec) Marginal revenued) None

Ans. c

107. ---------- works as a shock absorbera) Stock paymentb) Slack paymentc) Cash paymentd) None

Ans. b

108. In --------- relationship, growth determines profita) Differentiated diversificationb) Dividend diversificationc) Diamond desiredd) None

Ans. a

109. Sales maximization model is an alternative for ----- model

a) Cyert modelb) March modelc) Both a and bd) Profit maximization model

Ans. d

110. All ----------- are inter connected and supplement on another

a) Modelb) Theoryc) Objectivesd) All

Ans. d

Question

111. In the above diagram loss area is a) Ab) Bc) N1,N2d) Both A and B

Ans. d

112. In the above diagram max. Profit area is


a) Ab) Bc) N1,N2d) Both A and B

Ans. c

113. According to the --------- theory, a traditional firm is a group with a particular organizational and management structure having command over its own property rights

a) Cyert and march’s b) Economist theory of firmc) Profit maximizationd) All

Ans. b114. The management has to keep a high level of retained profits for further expansion and development but it should not displease the shareholders that is

a) Profits / total profits (by giving low dividendsb) Retained profits / total profits (by giving low

dividendsc) Retained profits / total profits (by giving low

dividendsd) None of the above

Ans. c

115. --------------- model highlights that the primary objective of a firm is to maximize its sales rather than profit maximization. It states that the goal of the firm is maximization of sales revenue subject to a minimum profit constraint

a) Boumal’s staticb) Dynamic modelsc) Profit maximization modeld) Both a and b

Ans. d

116. The managers’ utility function is expressed asa) S = f(S,M,Id)b) U = f(S,M,Id)c) U = f(S,U,Id)d) None of the above

Ans. b

117. A firm will be maximizing its profits when --------- and --------- curves cuts -------- curve from ---------

a) MC = MR, MR, MC, belowb) MR = MC, MC, MR, abovec) MR = MC, MC, MR, belowd) MR = MC, MC, AR, below

Ans. c


1. A2. B3. C

Set - Ba) TRb) TCc) Profit

A) 1-a,2-b,3-cB) 1-c,2-b,3-aC) 1-b,2-a,3-cD) None of the above

Ans. c


1. OD output level2. OF output level3. Mid of DE output level

Set - Ba) Profit is maximum and TR is much in excess of

TC b) Profit will fall TR is still in excess of TCc) Profit constraint is less

A) 1-a,2-b,3-cB) 1-b,2-c,3-aC) 1-a,2-c,3-bD) None of the above

Ans. a

120. The -------------- model highlights on achieving a balanced growth rate of a firm. --------------- (g) is equal to two important variables 1. --------------- (gd), 2. --------- (gc). Hence, Max---- = --------=--------

a) Marris growth maximization, minimum growth rate, the rate of demand for the products, growth rate of capital, g,gd,gc

b) Marris growth maximization, maximum growth rate, the rate of demand for the products, growth rate of capital, g,gd,g


c) Cyert and march’s, maximum growth rate, the rate of demand for the products, growth rate of capital, g,gd,gc

d) Marris growth maximization, maximum growth rate, the rate of demand for the products, growth rate of capital, g,gd,gc

Ans. d

121. The -------------, which the firm receives by the sale of its output in the market, is known as its revenue

a) Profitb) Net profitc) Amount of moneyd) All

Ans. c

122. Total revenue is also calleda) TRb) Gross revenuec) Net revenued) Both a and b

Ans. d

123. AR meansa) Priceb) Profitc) Revenued) All

Ans. a

124. --------- is a modified form of full cost pricinga) Rate of return pricingb) Skimming pricingc) Both a and bd) None

Ans. a

125. TR = a) P*Qb) P+Qc) P-Qd) None

Ans. a

126. MR= a) ∆TR / ∆Pb) ∆TC ∆Qc) ∆TR / ∆Qd) None

Ans. c

127. ---------- is the highest when MR is zeroa) TRb) TCc) ARd) AC

Ans. a

128. In perfect competitiona) JR = MR = Priceb) AR = MR = Pricec) AR = MR = Demandd) None

Ans. b

129. In the diagram below it is the diagram under

a) Perfect competitionb) Imperfect competitionc) Both a and bd) None

Ans. b

130. ------------ refers to the share of a firm’s sales of a particular product in the total sales of all firms in the market

a) Market shareb) Firm sharec) Industry shared) Country share

Ans. a

131. If a firm can sell 10 units at Rs. 20 each or 11 units at Rs. 19 each, then the MR from the eleventh unit is

a) 9b) 19c) 20d) 11

Ans. a

132. The diagram given below is

a) Under perfect marketb) Under monopolyc) Oligopolyd) None

Ans. a

Question Production = 8000 units, TFC = 30000, TVC = 50000, 20% net profit margin


133. In the above question what is the per unit costa) 10b) 2c) 20d) 30

Ans. a

134. In the above question what is the selling pricea) 10b) 20c) 30d) 12

Ans. d

135. Capital employed by a firm is Rs. 16 Lacks and the total cost is Rs. 12 Lacks with a planned rate of return of 30%. Find what the selling price is

a) 40b) 12c) 52d) None

Ans. c

136. Under ----------- a firm, fix it’s --------- according to the --------- fixed by the leader

a) Pricing, price, priceb) Going rate pricing, price, pricec) Going rate pricing, demand, demandd) None of the above

Ans. b

Question


1. A2. B3. C

Set - Ba) MRb) ARc) Price

A) 1-a,2-b,3-cB) 1-b,2-a,3-c

C) 1-a,2-c,3-aD) None

Ans. b

138. It is clear for the above diagram that a) (RM / RQ) = RM / (RM – RM)b) (RM / RQ) = RM / (RQ – QM)c) (RQ / RM) = RM / (RM – QM)d) (RM / RQ) = RM / (RM – QM)

Ans. d

139. Suppose that the price of a product is Rs. 4 and the elasticity coefficient is 2 then the corresponding MR will be

a) 1b) 6c) 0d) 2

Ans. a


1. Marginal cost pricing2. Customary pricing3. skimming price policy4. penetration price policy

Set - Ba) Instead of setting a high price, the firm may set a

low price for a new product by adding a low mark up to the full cost.

b) The system of charging high prices for new products

c) Prices of certain goods are more or less fixed in the minds of consumers these are known as charm prices also

d) Price is determined on the basis of MC which refers to the cost of producing additional units

A) 1-a,2-b,3-d,4-cB) 1-b,2-a,3-c,4-dC) 1-a,2-b,3-c,4-dD) 1-d,2-c,3-b,4-a

Ans. d

141. A market structure is characterized by the a) No. of sellersb) No. of buyersc) Scope for entry and exitd) All

Ans. d

142. Perfect competition exhibits an ------ market situation

a) Idealb) Idlec) Normald) None


Ans. a

143. In long term and in perfect competition a firm earna) Profitb) Normal profitc) Super normal profitd) Any of above

Ans. b

145. In perfect competition a firm is pricea) Makerb) Takerc) Both a and bd) None

Ans. b

146. What is the means of MONOa) Singleb) Minusc) Buyerd) Seller

Ans. a

147. “A monopolist is the only producer of a product that has no close substitute” it is defined by

a) Prof. Wilsonb) Prof. Watsonc) Prof. Williamsonsd) None

Ans. b

148. ---------- is a situation in which there are a few large buyers

a) Oligopsonyb) Monopolyc) Bilaterald) None

Ans. a

149. In perfect competition commodity isa) Heterogeneousb) Substitutec) Homogeneousd) All

Ans. c

150. In monopoly there is ------- sellera) 1b) 2c) 3d) Many

Ans. a

151. -------- is a situation where a monopolist faces a ------a) Bilateral, oligopoliesb) Bilateral monopoly, monopsonistc) Both a and b

d) NoneAns. b

Question

152. In the above diagram B and C meansa) Monopoly, Imperfect competitionb) Oligopoly, Imperfect competitionc) Both a and bd) None

Ans. a

153. In the above diagram D meansa) Monopolistic competitionb) Duopsonyc) Bilateral monopolyd) All

Ans. d

154. --------- is a situation of a few big buyers controlling the market, industry analysis explains how the entire market is closely knit and how the structure of the market

a) Oligopolyb) Oligopsonyc) Both a and bd) None

Ans. b

155. ------ is an economic condition similar to a ----------- in which there are only --------- large buyers for a specific product or service

a) Duopsony, Duopoly, two or threeb) Monopsony, Duopoly, twoc) Duopsony, Duopoly, twod) None of the above

Ans. c

156. A ----------- too can adopt price discrimination paying different prices to different sellers according to the -----------

a) Monopolist, Elasticity of supplyb) Monopsonist, elasticity of supplyc) Both a and bd) None

Ans. b

157. In the diagram given below we get


a) Normal profitb) Super normal profitc) Lossd) None

Ans. b

158. In the diagram given below we get

a) Normal profitb) Super normal profitc) Lossesd) None

Ans. c


1. AR> AC2. AR=AC3. AR<AC

Set – Ba) Normal profitb) Super normal profitsc) Losses

A) 1-c,2-b,3-aB) 1-b,2-a,3-cC) 1-a,2-b,3-cD) None of the above

Ans. B

160. The --------- refers to the practice of a seller to charge ------------ for ---------- for the -------------, produced under a single control without corresponding ---------- in cost

a) Policy of price discrimination, different prices, different customers, different commodity, differences

b) Policy of price discrimination, same prices, same customers, same commodity, differences

c) Policy of demand discrimination, different prices, different customers, different commodity, differences

d) Policy of price discrimination, different prices, different customers, same commodity, differences

Ans. d

161. The concept of consumer’s surplus was first invented by a ---------- in the year 1944

a) French Engineer Dupuitb) English Engineer Dupuitc) Roman economist Dupuitd) None

Ans. a

162. The volume of consumers’ surplus varies with variations in

a) Demandb) Pricec) Both a and bd) None

Ans. b

163. When price rise consumers’ surplus is a) Fallsb) Risec) No changed) None

Ans. a

164. The total amount of consumers’ surplus is the area below the ---------- and above the price line

a) Supply curveb) Demand curvec) Both a and bd) None

Ans. b

165. ---------- is a parallel concept to consumers’ surplusa) Production b) Production conceptc) Producers’ surplusd) All

Ans. c

166. The direct or indirect payment by government to producers or consumers to defray part of the cost of economic activity is called

a) Dead weight lossb) Surplusc) Income


d) SubsidiesAns. d

167. According to the Dr. ---------“The government should adopt those economic policies which promote consumers’ surplus”

a) Pattelb) Littlec) Mittald) None

Ans. b

168. The consumers’ surplus concept used ina) Conjectural advantageb) Cost benefit analysisc) Public financed) All

Ans. d

169. The living standards of the people of USA are certainly more when compared to India because the national output and percapita income is high. This is the example of

a) Cost benefitb) Conjectural advantagec) Public financed) None

Ans. b

170. Vivek is a seller and is ready to sell at 20 and actually sell at Rs. 30. Then producer’s surplus is

a) 20b) 30c) 50d) 10

Ans. d

171. Consumers’ surplus = e) What we are prepared to use – what we

actually payf) What we are prepared to pay – what we

actually useg) What we are prepared to pay – what we

actually payh) None

Ans. c

QUESTION

172. In the above question Demand and supply are equal at

a) db) sc) ed) none

Ans. c

173. In the above question RDE is a a) Consumers’ surplusb) Producers’ surplusc) Both a and bd) None

Ans. a

174. In the above question SRE is aa) Consumers’ surplusb) Producers’ surplusc) Both a and bd) None

Ans. b

175. Producer surplus = a) What the seller is actually receiving – what the

seller ready to receiveb) What the seller is actually selling – what the

seller ready to receivec) What the seller is actually receiving – what the

seller ready to selld) None of the above

Ans. a

176. If total units sold 5, total price receive 75, total price expected 25 then producer surplus =

a) 50b) 25c) 100d) 150

Ans. a

177. If total units purchased 5, total utility 200, total price paid 150 then consumers’ surplus =

a) 100b) 80c) 50d) 60

Ans. c



1. A2. B3. C

Set – Ba) MUb) Consumers’ surplusc) Area of expenditure

A) 1-a,2-b,3-cB) 1-b,2-c,3-aC) 1-b,2-a,3-cD) None

Ans. B

179. Match the following according to the above diagramSet – A

1. OD * OQ = ODPQ2. OR * OQ =OPPQ3. ODPQ – ORPQ = RDP4. OR

Set - Aa) C.S.b) Actual expenditure incurred by the consumerc) Total expenditure willing to incurd) Actual market price

A) 1-b,2-a,3-c,4-dB) 1-a,2-c,3-b,4-dC) 1-a,2-b,3-d,4-cD) 1-c,2-b,3-a,4-d

Ans. D

180. Match the following according to the diagram given below

Set - A1. OQ2. OM * OQ = OMNQ3. OS * OQ = OSNQ4. OMNQ – OSNQ = SNM

Set - Ba) Actual salesb) Total price receivedc) Price expected to getd) P.S.

A) 1-b,2-a,3-c,4-dB) 1-a,2-b,3-d,4-c

C) 1-a,2-b,3-c,4-dD) 1-a,2-c,3-b,4-d

Ans. C

181. Macroeconomics is also calleda) Aggregative economicsb) Lumping methodc) Both a and bd) None

Ans. a

182. Macroeconomics covers the topics area) The theory of economics and employmentb) The general theory of price levelc) The theory of growthd) All

Ans. d

183. When values of a variable are to be determined with in the system is called

a) Endogenousb) Exogenousc) Both a and bd) None

Ans. a

184. Macroeconomic variables deal with a) National productb) Consumption functionc) Saving functiond) All

Ans. d

185. Flow variable has a a) Time dimensionb) Demand dimensionc) Price dimensiond) All

Ans. a

186. When a no. of commodities and their prices at two different periods are arranged in a tabular form, it is called as an

a) Consumer’s price indexb) Index numberc) Both a and bd) None

Ans. b

187. ---------- tells us the percentage of consumption out of a given level of income

a) Saving income rationb) Consumption income rationc) Income rationd) None

Ans. b


188. The days of ------- are gonea) Moneyb) Kingdomc) Barterd) None

Ans. c

189. Expand CPIa) Customer’s price indexb) Consumer’s price indexc) Both a and bd) None

Ans. b

190. Expand WPIa) Whole sale price indexb) Whole price indexc) Both a and bd) None

Ans. a

191. ----------- is that branch of economics, which deals with the study of aggregative or average behavior of the entire -------?

a) Macroeconomics, industryb) Macroeconomics, firmc) Macroeconomics, economyd) None

Ans. c

192. The amount that the people actually save in a particular time is called

a) Ex anteb) Ex postc) Both a and bd) None

Ans. b

193. Out of Rs. 100 a person can consume Rs. 80 and save Rs. 20. In this case consumption income ratio is

a) 8:2b) 1:08c) 1:02d) None

Ans. b

194. When we say that COR is 4:1 it implies that a capital investment of Rs. --- is required to produce ------ unit of output.

a) 4,1b) 1,4c) Both a and bd) None

Ans. a

195. GNP Deflator =

a) GNP of the chosen year / 100b) PIN of the chosen year / 100c) PIN of the chosen year * 100 / GNPd) None

Ans. b

196. The GNP deflator acts fas an adjustment factor which is used to convert -------------- into ------------

a) Nominal GNP, Real GNPb) Real GNP, Nominal GNPc) GNP, Real GNPd) None

Ans. a

197. Nominal GNP for the year 2005-06 = Rs. 1500000, WPI for the year is 120, base year PIN 100. then what is the real GNP for 2005-06

a) 1500000b) 150000c) 1250000d) None

Ans. c

198. If we calculate GNP at --------- market prices, it is called as -----------GNP and if we measure GNP at -------- prices, i.e., prices prevailing at the base year, it is described as ----------- GNP

a) Base year, nominal, constant, realb) Current, real, constant, nominalc) Current, nominal, current, reald) Current, nominal, constant, real

Ans. d

199. The concept of ----------- ratio explains the relationship between the ------------- and --------------. It is a ratio of ------------ in output or real income to an ------- in capital

a) Capital output, value of capital investment, value of output, decrease, increase

b) Capital output, value of capital investment, value of output, increase, decrease

c) Capital output, value of capital investment, value of output, increase, increase

d) Capital output, value of capital input, value of output, increase, increase

Ans. c


1. APS2. APC3. Liquidity ratio4. leverage ratio

Set - B


a) Total consumption / total incomeb) Liquid assets/ total assetsc) Total savings/total incomed) Value of debts / total assets

A) 1-a,2-b,3-d,4-cB) 1-c,2-a,3-b,4-dC) 1-b,2-a,3-c,4-dD) 1-a,2-c,3-b,4-d

Ans. B

201. MPC + MPS =a) 0b) 1c) 2d) 3

Ans. b

202. Multiplier concept is developed bya) Prof. Keynesb) Prof. Khanc) Both a and bd) None

Ans. b

203. Investment which varies with the changes in the level of national income is called ---------- investment

a) Induced b) Autonomousc) Both a and bd) None

Ans. a

204. The investment, which is independent of the level of income, is called as -------- investment

a) Inducedb) Autonomousc) Both a and bd) None

Ans. b

205. Autonomous investment is guided bya) Social welfareb) Profit motivec) Both a and bd) None

Ans. a

206. Depreciation is part of a) Investmentb) Net investmentc) Gross investmentd) All

Ans. c

207. ----------- shows the effect of changes in consumption on induced investment and tells us how the volume of investment depends on the level of consumption

a) Multiplierb) Acceleratorc) Both a and bd) None

Ans. b

208. a = a) ∆ C / ∆ Ib) ∆ A / ∆ Cc) ∆ I / ∆ Cd) None

Ans. c

209. Accelerator is calleda) Magnification of derived demandb) Magnification of derived supplyc) Both a and bd) None

Ans. a

210. Consumption function is determined by a number of -------- factors

a) Subjectiveb) Objectivec) Both a and bd) None

Ans. c

211. If total consumption is Rs. 8000 and Yield is Rs. 10000 then what is the APC?

a) 0.8b) 80%c) Both a and bd) None

Ans. c

212. Total income increases from 10000 crore to 20000 crore and total consumption increases from 8000 crore to Rs. 15000 crore then MPC =

a) 70%b) 60%c) 0.6d) None

Ans. a

213. What is the name of the curve is given below?


a) Induced investmentb) Autonomous investmentc) Simple investmentd) All

Ans. a214. If MPC = 2/3 then K =

a) 1b) 3c) 2d) 4

Ans. b

215. The value of MPC is always -------- but -------- onea) Positive, less thanb) Negative, less thanc) Positive, more thand) Negative, more than

Ans. a

216. --------- may be defined as a ------------ to a change in investment

a) Accelerator, ratio of change in incomeb) Multiplier, ratio of change in incomec) Both a and bd) None

Ans. b

217. The supply price of a capital asset is Rs. 3000 and the asset will become useless after two years. Expected yield for first year is 1100 and for second year is 2420. Rate of discount is 10%. Then Cr =

a) 2000b) 3000c) 4000d) 2500

Ans. b

218. State which statement is true?1. MPC is greater than zero2. MPC goes down as income increases3. MPC of the poor is greater than that of the rich4. In the short run MPC is stable

a) 1,2b) 2,3c) 3,4d) All

Ans. d


1. MEC>IR2. MEC<IR3. MEC=IR

Set - Ba) Favorableb) Adverse

c) Neutral

A) 1-b,2-a,3-cB) 1-a,2-c,3-bC) 1-a,2-b,3-cD) None of the above

Ans. C


1. Higher the value of MPC2. When MPS = 0 and MPC = 13. When MPS = 1, and MPC = 0

Set – Ba) There will be a 100% increase in income every

time b) What is earned will be saved and the value of

multiplier will be 0c) Higher would be the value of K.

A) 1-c,2-a,3-bB) 1-a,2-b,3-cC) 1-b,2-a,3-cD) None

Ans. A

221. Instrument of economic stability isa) Monetary policyb) Fiscal policyc) Direct controlsd) All

Ans. d

222. ------ policy deals with the total money supply and its management in an economy.

a) Monetaryb) Fiscalc) Physicald) All

Ans: a

223. According to ----------“Monetary policy is the management of the expansion and contraction of the volume of money in circulation for the explicit purpose of attaining a specific objective such as full employment”

a) RP Kentb) D.C. Rowanc) PR Kentd) C.D. Rowan

Ans. a

224. The monetary policy should be neutral in its effects on

a) Prices and Incomeb) Income and outputc) Output and employmentd) All of the above


Ans. d225. The term “fisc” means

a) Financeb) Teasuraryc) Both a and bd) None

Ans. b

226. Fiscal policy is a package of economic measures of the government regarding its

a) Public expenditureb) Public revenuec) Public debtd) All of the above

Ans. d

227. The amount of new money printed by the government depends on the -------------- of the economy

a) Absorption capacityb) Growthc) Developmentd) All

Ans. a

228. Expand BISa) Built in stabilityb) Built in stabilizersc) Bullet in stabilityd) None

Ans. b

229. Physical policy refers to a) Direct controlb) Indirect controlc) Both a and bd) None

Ans. a

230. Investments in certain fields and foreign trade is regulated through

a) Licensingb) Fixing of quotasc) Import controlsd) All of the above

Ans. d

231. A --------- monetary policy may be followed by cutting down the interest rates or a ------------ monetary policy by raising the rate of interest.

e) Cheap, Positivef) Dear, positiveg) Cheap, dearh) None

Ans. c

232. A Higher rate of -------- ensure -------- condition, higher output, income and better living standards to the people

a) Economic growth, developmentb) Growth in demand, full employmentc) Economic growth, full employmentd) All of the above

Ans. c

233. Import controls are executed through a system of ----and ----------

a) Quotas and Licensesb) Quotas and rationingc) Both a and bd) None

Ans. a

234. --------- policy is the policy of the ---------a) Fiscal, central Bankb) Monetary, Central Governmentc) Monetary, Central Bankd) Fiscal, Judiciary

Ans. c

235. The major objective of Fiscal policy is a) Achieve optimum allocation of economic

resourcesb) Bring about equal distribution of Income and

wealthc) Maintain price stabilityd) All of the above

Ans. d

236. Tax on individual is called ---------- and tax on commodity is called -----------

a) Direct tax, Excise taxb) Direct tax, Indirect taxc) Direct tax, Commodity taxd) Both b and c

Ans. d


1. Bank rate policy2. Open market operations3. variable reserve ratio4. rationing of credit

Set - Ba) Borrowing is discourage when its goes upb) This method is sometimes adopted to make the

bank rate effectivec) Minimum requirement is 3% to 15%d) By limiting the amount available to each

applicant

A) 1-b,2-a,3-c,4-dB) 1-a,2-b,3-d,4-c


C) 1-a,2-b,3-c,4-dD) 1-a,2-c,3-b,4-d

Ans. C


1. Public Revenue2. Public expenditure policy3. Public debt or public borrowing policy4. Deficit financing

Set - Ba) Tax revenueb) Development c) All loan taken by the governmentd) It implies printing of fresh and new currency

notes by the government

A) 1-b,2-a,3-c,4-dB) 1-a,2-b,3-c,4-dC) 1-a,2-b,3-d,4-cD) 1-a,2-c,3-b,4-d

Ans. B

239. State which statement is true regarding direct controls in physical policy?

1. Control over consumption and distribution through price control and rationing

2. Control over investment and production through licensing and fixing of quotas etc.

3. Control over foreign trade through import control, import quotas, export control etc.

a) 1,2b) 2,3c) 1,3d) All

Ans. d

240. State which statement is true regarding role of fiscal policy in the economic development?

1. To act as a saver2. To act as an investor3. To act as growth promoter4. To act as an income redistributer5. To act as balancer

a) 1,2,3b) 3,4,5c) 2,3,4d) All

Ans. d

241. The term business cycle refers to a ------a) Cycleb) Wave

c) Both a and bd) None

Ans. b

242. According to Prof. ------- “The business cycle in the general sense may be defined as an alternation of periods of prosperity and depression of good and bad trade”

a) Haberlerb) Haberc) Keynesd) None

Ans. a

243. Depression is characterized by a) Falling pricesb) Falling profitsc) Large scale unemploymentd) All

Ans. d

244. When economic development starts in full swing and there will be fuller utilization of

a) Resourcesb) Staffc) Outputd) All

Ans. d

245. The recession phase is characterized by a) Hesitationb) Doubtc) Feard) All

Ans. d

246. Hawtrey gives a) Monetary theoryb) Over investment theoryc) Profit maximization theoryd) None

Ans. a

247. Multiplier and accelerator theory is given bya) Hicksb) Samuelsonc) Both a and bd) None

Ans. c

248. Granting of ----- might help in recovering from slump

a) Free foodb) Free Housesc) Aidd) All

Ans. c


249. Country like -------- have used monetary measures to control inflation

a) U.K.b) U.S.A.c) Indiad) All of the above

Ans. d

250. --------- is the phase of highest level of economic activity

a) Boomb) Recoveryc) Increasedd) Jump

Ans. a

251. The business cycle is nothing but --------- in the ------level of economic activity of a nation

e) Rhythmic fluctuations, continuousf) Rhythmic fluctuations, aggregate g) Fluctuations, aggregate h) None of the above

Ans. b

252. Cyclical fluctuations have become a ------- feature of a ------- system

a) Regular, socialistb) Irregular, capitalistc) Regular, capitalistd) None

Ans. c

253. The depression phase comes to an end with the -----programs introduced like---------

a) Recovery, Public worksb) Recovery, Reduction in the rate of interestc) Both a and bd) None of the above

Ans. c

254. According to professor Hayek discrepancy between the ----------- and --------- of interest cause business fluctuation

a) Natural, market rateb) Unnatural, market ratec) Natural, flow of money supplyd) None

Ans. a

255. ---------- policy followed in the ------ during the post war period to fight the prospects of depression

a) Price, U.K.b) Price support, U.S.A.c) Price, U.S.A.d) None

Ans. b

256. The measures which are adopted to mitigate the harmful effects of contraction is

e) Quick liquidation of inventoriesf) Reduction of cost of productiong) Improvement in qualityh) All of the above

Ans. d

257. State which statement is true regarding economic evolution is characterized

1. A period of upswing followed by a period of downswing

2. A period of prosperity alternating with poverty and adversity

3. A period of boom followed by a period of slump

4. A period of recession followed by a period of revival

5. A period of favorable condition by an adverse condition

a) 1,2,3,4b) 3,4,5c) 2,3,4d) All

Ans. d

258.

Match the following according to the diagramSet - A

1. A2. B3. C4. D5. E

Set - Ba) Depressionb) Recessionc) Boomd) Recoverye) Full employment

A) 1-c,2-b,3-a,4-e,5-dB) 1-a,2-c,3-b,4-d,5-eC) 1-c,2-b,3-a,4-d,5-eD) 1-b,2-a,3-c,4-d,5-e

Ans. C


259. --------is a state of affair in which the -------- consumed, produced and level of employment are ------- and there are no --------- or unemployed workers.

a) Prosperity, real income, high, idle resourcesb) Full employment, real income, rising, idle

resourcesc) Both a and bd) Prosperity, income, high, idle resources

Ans. c


1. Schumpeter’s innovations theory of business cycle

2. Over – investment theory of Von Hayek3. Hawtrey’s Pure monetary theory of trade cycles4. Modern theory of Interaction of Multiplier and

Acceleration principleSet - B

a) Introduction of a new method of production, a new process of production

b) There is a natural or equilibrium rate of interest at which the demand for loanable funds is equal to the supply of the same through voluntary savings.

c) The main factor affecting the flow of money supply is the credit creation by the banking system

d) The changes in the level of income caused by the operation of the super multiplier have been explained in five steps

A) 1-b,2-a,3-c,4-dB) 1-a,2-c,3-b,4-dC) 1-a,2-b,3-d,4-cD) 1-a,2-b,3-c,4-d

Ans. D

261. Inflation is a sin; every government -------- ita) Denouncesb) Practicesc) Both a and bd) None

Ans. c

262. According to ---------- “an inflationary rise in price cannot take place before the point of full employment”

a) Keynesb) A.C. Pigouc) Both a and bd) None

Ans. a

263. The Cambridge economists like Lord Keynes and A.C. Pigou viewed inflation as a phenomenon of

a) Monitoryb) Full employment

c) Both a and bd) None

Ans. b

264. According to another approach the sole cause of inflation is the Existence of persistence Excess ----- in the economy

a) Supplyb) Demandc) Both a and bd) None

Ans. b

265. -------- refers to situation where in prices rise on account of increasing cost of production

a) Cost pull inflationb) Cost push inflationc) Demand pull inflationd) All

Ans. b

266. During the period of war, shortage of essential goods create rise in

a) Pricesb) Demandc) Both a and bd) None

Ans. a

267. The value of money and price level are ------- relateda) Positivelyb) Reverselyc) Negativelyd) Both b and c

Ans. d

268. A state of steady fall in price is calleda) Inflationb) Stagflationc) Deflationd) None

Ans. c

269. Inflationary gap is a ----- concepta) Phillipsb) Pigouc) Keynesiand) All

Ans. c

270. Deflation is a state of a) Falling pricesb) Falling incomec) Falling employmentd) All

Ans. d


271. ---------- Inflation may be defined as a situation where the total ----------- persistently exceeds total supply of goods at current prices, so that prices are pulled upwards by the continuous upward shift of the aggregate demand function.

a) Demand pull, demandb) Demand push, monetary demandc) Demand pull, monetary demandd) None

Ans. c

272. Cost of production increases whena) Demand for higher wages by the labor classb) Fixing up of higher profit margins by the

manufacturesc) Introduction of new taxes d) All

Ans. d

273. According to -------- “ The ------- is the amount by which aggregate expenditure would exceed aggregate output at the full employment level of income.”

a) Lipsey, inflationary gapb) Kenyas, demand pullc) Pigou, cost pushd) None

Ans. a

274. Measures to wipe out inflationary gap isa) Increase in savings to reduce aggregate demandb) Raise the out put to match the disposable incomec) Raise the taxes to mop up the excess purchasing

powerd) All of the above

Ans. d

275. ----------- is a portmanteau term in macro economics used to describe a period with a high rate of inflation combined with ------------- and economic recession.

a) Stagflation, Employmentb) Inflation, employmentc) Stagflation, unemploymentd) All

Ans. c

276. ---------- the British economist was the fist to identify the inverse relationship between the rate of ------- and the rate of increase in ---------

a) A.W.P. Phillips, unemployment, money wagesb) A.W. Phillips, unemployment, money wagesc) A.W. Phillips, employment, money wagesd) None of the above

Ans. b

277. The above is a diagram of a) Demand pull inflationb) Demand push inflationc) Both a and bd) None

Ans. a


1. Creeping inflation2. walking inflation3. running inflation4. hyper inflation

Set - Ba) 3%b) 7%c) 15%d) 25%

A) 1-a,2-c,3-d,4-dB) 1-a,2-b,3-d,4-cC) 1-b,2-a,3-c,4-dD) 1-a,2-b,3-c,4-d

Ans. D

279. State which statements are true for anti-inflationary monetary measures?

1. Restrictions on bank credits2. Freezing and blocking particular type of assets3. Increasing bank rate and other interest rates4. Sale of Govt., securities in the open market by

central bank5. Raising the legal reserve requirements like CRR

and SLR6. Regulation of consumer’s credit7. rationing of credit etc.

a) 1,2,3,4,5b) 4,5,6,7c) 3,4,5d) All

Ans. d

280. Gross national Income at current prices is 20000, Local Taxes is 5000, Saving of the community is 3000, Gross national product at pre inflation prices is 15000, Govt. Exp. 6000. Calculate the inflationary gap.

a) 6000b) 8000


c) 9000d) 3000

Ans. d

281. The term ----------- refer to a benefit or cost associated with an economic transaction, which is not taken into account by those directly involved in making it.

a) Positive externalityb) Negative externalityc) Externalityd) None

Ans. c

282. MSB = a) MPB + MSCb) MPB + MECc) MPB + MEBd) None

Ans. c

283. MSC = a) MPC + MECb) MPB + MSCc) MPB + MECd) None

Ans. a

284. ----------- arises as a result of excessive use of fertilizers, soil erosion etc.

a) Air pollutionb) Soil pollutionc) Both a and bd) None

Ans. b

285. Natural environment includesa) Land formb) Location aspectsc) Topographical conditionsd) All of the above

Ans. d

286. ---------- has suggested an alternative approach to tackle the problem of externailities

a) Prof. Monad H. Coaseb) Prof. Ronald H. Coasec) Prof. Ronald P. Coased) None of the above

Ans. b

287. Environmental pollution is an example for ----------a) Negative externailitiesb) Positive externailitiesc) Externailitiesd) All

Ans. a

288. The term acid rain was first introduced ina) 1856b) 1877c) 1872d) 1972

Ans. c

289. The factor which contributed for environmental degradation is

a) Waterb) Soilc) Deforestationd) All

Ans. d

290. Markets are purely guided by ---------a) Social profit considerationsb) Private profit considerationc) All of the aboved) None of the above

Ans. b

291. Installation of pollution control equipment in factories in a specific way is the example of

a) Internalizing externalitiesb) Direct government regulationsc) All of the aboved) None of the above

Ans. b

292. ------------- is a legal limit on how much -------- a firm can emit

a) Emission standard, pollutionb) Direct government regulation, externalitiesc) Both a and bd) None

Ans. a

293. ----------- refer to accidents resulting from nuclear device and --------

a) Soil accidents, Radio active materialsb) Nuclear accidents, Radio materialsc) Nuclear accidents, Radio active materialsd) None of the above

Ans. c

294. Management students should be aware of these ------ problems in its right perspective as it helps them to take right decisions as -----------

a) Global, their studiesb) Global, prospective managersc) Both a and bd) None

Ans. b


295. --------- on earth means progressive warming up of the earth’s surface due to the blanketing effect of man made carbon dioxide with atmosphere

a) Global b) Soil pollutionc) Deforestationd) Green house effect

Ans. d

296. In --------- accident, half of the nuclear power reactor was completely burnt, releasing ----------

a) 28th March, 1978, carbon dioxideb) 18th March, 1979, radioactivityc) 28th March, 1979, radioactivityd) None

Ans. c

297. Match the following according to the following diagram

Set - A1. A2. B3. C4. D

Set - Ba) MSBb) MPBc) MSC = MPCd) Net benefit to the society

A) 1-a,2-b,3-c,4-dB) 1-a,2-c,3-b,4-dC) 1-a,2-b,3-d,4-cD) 1-b,2-a,3-c,4-d

Ans. D


1. MSC > MPC2. MSC< MPC3. MSB < MPB4. MSB> MPB

Set - Ba) The government has to tax on consumers

b) The government has to subsidize producersc) The government has to tax on producersd) The government has to subsidize consumers

A) 1-a,2-c,3-b4-dB) 1-d,2-b,3-c,4-aC) 1-c,2-b,3-a,4-dD) 1-a,2-b,3-c,4-d

Ans. C

299. The -------- effect on earth means --------- of the earth’s surface due to the --------- effect of man made -----in the atmosphere.

a) Greenhouse, warming, blanketing, carbon dioxide

b) Greenhouse, progressive warming, blanketing, carbon dioxide

c) Greenhouse, progressive warming, air polution, carbon dioxide

d) None of the aboveAns. b


1. Positive externality in consumption2. Negative externality in consumption3. Positive externality in production4. negative externality in production

Set - Ba) Govt. provides various kinds of vaccinationsb) A young man rides a noisy motor cyclec) Beekeepers try to put their beehives on farmsd) When an industrial unit dumps its industrial

wastages in to the near by river

A) 1-b,2-a,3-c,4-dB) 1-a,2-b,3-d,4-cC) 1-a,2-c,3-b,4-dD) 1-a,2-b,3-c,4-d

Ans. D


Managerial Economics

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managerial economicsa

b managerial economics

equal b

science b economics

science b arts c

maximum b optimum c

forward b backward c

c production