MCA I year I Sem Subject: Modern Economic Analysis Multiple Choice Questions 1.

_________ is the integration of economic theory with business practice for the purpose of facilitating decision making and forward planning by the management. [b] a) Micro Economics b) Managerial Economics c) Macro Economics d) None of these 2. _________ is based on the thought that a rupee now is more worthful than a rupee earned after a year [b] a) Equi-marginal principle b) Discounting principle c) Incremental Principle d) Time Perspective. 3. ___________ is the cost incurred in choosing the next best alternative [c] a) Fixed Cost b) Variable Cost c) Opportunity Cost d) None 4. _________ is the difference of incremental revenue, per unit from incremental cost [a] a) Contribution b) Profit or Loss c) Break Even d) None 5. According to __________, a decision should be taken in account both the short-run and long-run [a] a) Time perspective b) Equi-Marginal Principle c) Discounting Principle d) None 6. Managerial Economics is a specialized discipline of management studies that deals with the application of ____ [d] a) Economic Theory b) Tools c) Methodologies d) All the above 7. ________ is the additional cost incurred to produce additional unit [b] a) Risk b) Marginal Cost c) Total Cost d) None 8. Under time period analysis, very short period is also called as _____________ [d] a) Average Period b) Long period c) Secular period d) Market period 9. The subject of economics is ___________________ [d] a) Physical Science b) Natural Science c) Exact Science d) Social Science 10. __________ states that an input should be so allocated that the value added by the last units is the same in all cases. [a] a) Equi-marginal principle b) Discounting principle c) Incremental Principle d) None of these 11. ____________ is not considered as an economic problem [d] a) What to Produce b) How to Produce c) Where to Produce d) Why to Produce 12. ________ is called as Managerial Rule of Thumb. [c] a) IR = IC b) IR < IC c) IR > IC d) IR IC 13. ______ is a study of particular firms, particular households, individual prices, wages incomes, individual industries and particular commodities [a] a) Micro Economics b) Macro Economics c) Tax d) None 14. ______ is a branch of economics which deals with the aggregate behaviors of the economy as a whole. [b] a) Micro Economics b) Macro Economics c) Decision-Making d) None 15. Micro Economics is also called as _____________ [b] a) Supply Theory b) Price Theory c) Demand Theory d) None 16. _________ is very useful to the planner for preparing economic plans for the countrys development [b] a) Micro Economic Analysis b) Macro Economic Analysis c) Price Index d) National Income 17. ________ is defined as a study of allocation of scarce resources among competing ends. [b] a) Politics b) Economics c) Statistics d) Mathematics 18. Managerial Economics is depended upon the other areas such as ___________________ [d] a) Mathematics b) Statistics c) Accountancy d) All the above 19. _____________ is not considered as factors of production [d] a) Land b) Capital c) Labour d) License 20. __________ refers to the process of expansion which leads to a higher level of per capita real income over a long period of time. [a] a) Economic Development b) Economic Growth c) Economic Analysis d) Economic Stability n 21. The discounted value is given by Vn = A/(1+i) Where I indicates_________________ [d] a) Discounted Value b) Number of Years c) Annuity Value d) Rate of Interest 22. _________ indicates increase in the real income, more inputs, more output etc. [a] a) Economic Growth b) Economic Development c) Economic Analysis d) Marginal Analysis

23. The example of economic development is ___________________ a) UK b) USA c) Australia d) India 24. If price, P = Rs. 10/- per unit and quantity demanded is 50 units, the total volume is _____________ a) Rs. 5/b) 0 c) Rs. 500/d) 0.05 25. The important objective of the business manager is _______________ a) Profit Maximization b) Cost Maximization c) Profit Minimization d) None 26. The consumer is a rational man who seeks ___________________ a) Minimum Profit b) Maximize loss c) Maximum Satisfaction d) None 27. Price Elasticity of Demand = __________________ a) Percentage change in demand / Percentage change in price b) Percentage change in price / Percentage change in demand c) Percentage change in supply / Percentage change in price d) Percentage change in demand / Percentage change in supply 28. The best examples for substitutes are _____________ and _______________ a) Car and Petrol b) Bread and Butter c) Pen and Ink d) Tea and Coffee 29. Cross Elasticity of Demand explains about _____________________ a) Substitutes b) Complementaries c) a and b d) None 30. Demand Curve Always slopes downwards from _________________________ a) Left to Left b) Right c) Left to Right d) Right to Left 31. The functional relationship between price and quantity demanded in known as ___________________ a) Demand Curve b) Demand Function c) Supply Function d) None 32. In demand function equation Dx = f { px,py,M,T,A,U }, Px stands for____________ a) Price of Commodity x b) advertisement c) Technology d) other factors 33. The market demand is also called as __________________________ a) Aggregate demand b) Individual Demand c) Industry Demand d) Derived Demand 34. The demand curve is called as a Rectangular hyperbola in case of ___________________ a) Relatively elastic b) Relatively inelastic c) perfectly elastic d) perfectly inelastic demand e) Unitary elastic demand 35. ____________ is defined as Desire backed up by ability and willingness to pay the price for a product a) Supply b) Demand c) Market d) Demand Function 36. The Best example for economic activity is ______________________ a) Services b) Profession c) Business d) All of these 37. _________ states that as price increases demand decreases and vice-versa a) Price Theory b) Law of Supply c) Law of Demand d) Law of Diminishing Marginal Utility 38. Law of demand is stated by ____________________ b) Lionel Robbins b) Samuelson c) Alfred Marshall d) Spencer and Sieglemen 39. Goods demanded by consumers for direct satisfaction of their wants are called____________ a) Producers Goods b) Consumers Goods c) Inferior Goods d) None 40. The Best Example for perishable goods is ____________ a) Milk b) Money c) Rice d) Carrels 41. The excess of satisfaction derived by the consumer is called ________________ a) Consumer Surplus b) Consumer equilibrium c) Market Equilibrium d) Market Demand 42. Marginal Cost must be ______________ to marginal revenue under Market Equilibrium a) Greater than b) Less than c) Equal to d) Constant 43. The consumer demand for a commodity changes as the consumers income changes is called __________ a) Income elasticity of demand b) Cross elasticity of Demand c) Price elasticity of demand d) None 44. Under price elasticity of demand, the value of e= __________ in case of unitary elastic demand

[d] [c] [a] [c] [a]

[d] [c] [c] [b] [a] [a] [e]

[b] [d] [c] [c] [b] [a] [a] [c] [a] [c]

a) 0

b)

c) 1

d) -1