Managerial Economics - 22

LIST OF ATTEMPTED QUESTIONS AND ANSWERS

True/False
Question The damage being done by the factories at and around Agra to Taj Mahal is an example of social cost for private benefit.
Correct Answer True
Your Answer True

Multiple Choice Single Answer
Question The Risk theory of profit was developed by
Correct Answer Hawley
Your Answer Hawley

Multiple Choice Multiple Answer
Question Index numbers may broadly be classified as
Correct Answer Price indices , Quantity indices , Special purpose indices
Your Answer Price indices , Quantity indices , Special purpose indices

Multiple Choice Single Answer
Question Expansion of supply is shown by the movement in the supply curve which is
Correct Answer upward
Your Answer upward

Multiple Choice Multiple Answer
Question Forms of Public Enterprises
Correct Answer departmental management , company management or management by boards , public corporations
Your Answer departmental management , company management or management by boards , public corporations

Select The Blank
Question The financing of ________ goods is done through public expenditure.
Correct Answer public
Your Answer public

Multiple Choice Single Answer
Question A Joint- Stock Company is owned by its share holders but it is managed by
Correct Answer Board of Directors
Your Answer Board of Directors

Multiple Choice Multiple Answer
Question The examples of negative externalities are
Correct Answer nuclear power plants , gargantuan trucks , unsafe factories
Your Answer nuclear power plants , gargantuan trucks , unsafe factories

Match The Following
Question Correct Answer Your Answer

Reduction in demand due to a new substitute in market Uncertainity Uncertainity

Accounting profit Explicit costs Explicit costs

Economic profit Pure profit Pure profit

Risk taking theory Hawley Hawley


Multiple Choice Single Answer
Question Peas & beas, groundnut oil & til oil, tea & coffee are examples of
Correct Answer substitutes goods
Your Answer complimentary goods

Select The Blank
Question Output rises in a lesser proportion to that of the increase in input, under the case of ________.
Correct Answer decreasing returns to scale
Your Answer decreasing returns to scale

True/False
Question A monopolist in a price maker.
Correct Answer True
Your Answer True

Select The Blank
Question The chemical effluents recklessly released by a chemical factory in the river causing water pollution, is an example of ________ cost.
Correct Answer social
Your Answer environmental

True/False
Question The financing of the pure public goods has to be through public expenditure and not through market pricing.
Correct Answer True
Your Answer True

Multiple Choice Single Answer
Question A firm is a unit of production, where production is done with the aim to maximize
Correct Answer profits
Your Answer profits

Select The Blank
Question By ' profits', the economist means total revenue minus ________.
Correct Answer All costs
Your Answer Explicit costs

Multiple Choice Multiple Answer
Question Cost-Benefit Analysis is
Correct Answer The analysis undertaken to judge the investment of any project , Refers to finding out the worth of investment , Enable ranking of optional investments
Your Answer The analysis undertaken to judge the investment of any project , Refers to finding out the worth of investment , Enable ranking of optional investments

True/False
Question Giffen goods are superior goods.
Correct Answer False
Your Answer False

Multiple Choice Multiple Answer
Question The railways use a lot of coal in firing the steam locomotives. This act causes
Correct Answer a lot of sufferings to the people near the railway. , cost to the society. , no cost to the railways.
Your Answer a lot of sufferings to the people near the railway. , cost to the society. , no cost to the railways.

Multiple Choice Single Answer
Question All the buyers and sellers operating under perfect competition have knowledge
Correct Answer perfect
Your Answer perfect

Multiple Choice Multiple Answer
Question Marginal cost pricing explains that the
Correct Answer Price charged should be equal to the marginal cost , Cost price sets the lower limits for firm’s price , Cost price ensures the possible level of profitability
Your Answer Price charged should be equal to the marginal cost , Cost price sets the lower limits for firm’s price , Cost price ensures the possible level of profitability

True/False
Question The question regarding the nature and quantities of commodities to be produced is solely restricted to capitalist economies.
Correct Answer False
Your Answer False

Match The Following
Question Correct Answer Your Answer

Implicit costs are the cost of resources owned by the firm. of resources owned by the firm.

Opportunity costs are also known as alternative costs alternative costs

The difference between average total cost &average fixed cost shows variable cost variable cost

The difference between average cost and average revenue is average profit average profit


True/False
Question During the period of depression, a large part of a country’s resources lie involuntarily idle.
Correct Answer True
Your Answer True

Multiple Choice Single Answer
Question The demand curve (A.R.) of a firm under perfect competition is
Correct Answer perfectly elastic
Your Answer perfectly elastic

Select The Blank
Question The externality which causes an economic gain or an economic loss to other economic units is also referred to as ________ externality.
Correct Answer Pecuniary
Your Answer Pecuniary

Select The Blank
Question While discussing the product divisibility of public and private goods, the principle of ________ may be applied in case of only those people who do not agree to pay or who cannot pay the market price
Correct Answer exclusion
Your Answer exclusion

Select The Blank
Question Under the decreasing returns to scale, the marginal output curve slopes ________.
Correct Answer downward
Your Answer downward

Multiple Choice Multiple Answer
Question Characteristics of Pure Public goods are:
Correct Answer They are completely indivisible , Their marginal cost would be zero or close to zero , Their benefits cannot be priced
Your Answer They are completely indivisible , Their marginal cost would be zero or close to zero , Their benefits cannot be priced

Multiple Choice Multiple Answer
Question Major types of costs are
Correct Answer Accounting costs , Economic costs , Opportunity costs
Your Answer Accounting costs , Economic costs , Opportunity costs

True/False
Question The short run Average Cost (A.C.) curve is U shaped.
Correct Answer True
Your Answer True

True/False
Question Cyclical fluctuations are recurrent in nature
Correct Answer True
Your Answer True

Multiple Choice Multiple Answer
Question Quantitative credit control measures are
Correct Answer open market operations , changes in bank rates , changes in statutory reserve ratio
Your Answer open market operations , changes in statutory reserve ratio

True/False
Question Private profit motive is an essential feature of Capitalism.
Correct Answer True
Your Answer True

Multiple Choice Single Answer
Question The number of buyers & sellers operating under perfect competition is
Correct Answer large
Your Answer large

Select The Blank
Question The sum of all individual demands constitutes________
Correct Answer market demand
Your Answer market demand

Select The Blank
Question The costs which cover the cost of advertising is ________.
Correct Answer Selling cost
Your Answer Selling cost

Multiple Choice Single Answer
Question The relation between variable input and ouput
Correct Answer is direct
Your Answer is direct

Multiple Choice Single Answer
Question With decline in price of a commodity, total expenditure spent on the commodity is less than before, then elasticity of demand for the commodity is
Correct Answer < 1
Your Answer < 1

Multiple Choice Single Answer
Question The public sector is owned & controlled by
Correct Answer state enterprises
Your Answer state enterprises

True/False
Question In the market, any one who agrees to pay the requisite price of a product would be excluded from their consumption.
Correct Answer False
Your Answer False

Multiple Choice Single Answer
Question A downward movement from one point to another point on the same demand curve implies
Correct Answer expansion
Your Answer expansion

Multiple Choice Multiple Answer
Question Methods of forecasting demand for new products are
Correct Answer Product life cycle analysis , Test marketing , Evolutionary approach
Your Answer Product life cycle analysis , Test marketing , Evolutionary approach

True/False
Question The concept of economic profit differs from that of normal profit.
Correct Answer False
Your Answer True

Select The Blank
Question Reasonable profit target as an alternative to the objective of profit maximization was suggested by ________.
Correct Answer Joel Dean
Your Answer Joel Dean

Multiple Choice Single Answer
Question Inflation is characterized by demand which is in
Correct Answer excess of supply
Your Answer surplus

Select The Blank
Question Defence service is an example of ________ good.
Correct Answer indivisible
Your Answer public