6/4/13 Exam Reports

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Section I

Group Question

Answer the following questions based on the information given below.

FEI for a country in a year, is the ratio (expressed as a percentage) of its foreign equity inflows to its GDP. The following figure displays the FEIs
for select Asian countries for the years 1997 and 1998.

[CAT 2000]

1. The country with the largest change in FEI in 1998 relative to its FEI in 1997, is
3 Marks

1) India

2) China

3) Malaysia

4) Thailand

Solution:

Hence, option 1.

2. Based on the data provided, it can be concluded that

3 Marks

1) absolute value of foreign equity inflows in 1998 was higher than that in 1997 for both Thailand and South Korea.

2) absolute value of foreign equity inflows was higher in 1998 for Thailand and lower for China than the corresponding values
in 1997.

3) absolute value of foreign equity inflows was lower in 1998 for both India and China than the corresponding value in 1997.

4) none of the above can be inferred.

Solution:
The values in the graph are all expressed as a percentage of FEI based on the GDP inflows. Absolute values for GDPs are not given.

∴ Nothing can be inferred.

Hence, option 4.

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3. It is known that China’s GDP in 1998 was 7% higher than its value in 1997, while India's GDP grew by 2% during the same period.
3 Marks The GDP of South Korea, on the other hand, fell by 5%. Which of the following statements is/are true?

I. Foreign equity inflows to China were higher in 1998 than in 1997.

II. Foreign equity inflows to China were lower in 1998 than in 1997.
III. Foreign equity inflows to India were higher in 1998 than in 1997.
IV. Foreign equity inflows to South Korea decreased in 1998 relative to 1997.
V. Foreign equity inflows to South Korea increased in 1998 relative to 1997.

1) I, III & IV

2) II, III & IV

3) I, III & V

4) II & V

Solution:
Let us assume that the GDP of India, China and South Korea in 1997 is 100.

∴ From the table above we can figure out that only statement II and V are true.

Hence, option 4.

4. China’s foreign equity inflows in 1998 were 10 times that into India. It can be concluded that
3 Marks

1) China’s GDP in 1998 was 40% higher than that of India.

2) China’s GDP in 1998 was 70% higher than that of India.

3) China’s GDP in 1998 was 50% higher than that of India.

4) No inference can be drawn about relative magnitudes of China’s and India’s GDPs.

Solution:
Let x be the Foreign Equity inflow of India.

∴ China’s Foreign Equity inflow is 10x.

∵ FEI in India in 1998 = 0.72

FEI in China in 1998 was 4.8.

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∴ China's GDP is 50% higher than that of India.

Hence, option 3.

Group Question

Answer the following questions based on the information given below.

The figures below present annual growth rate, expressed as the % change relative to the previous year, in four sectors of the economy of the
Republic of Reposia during the 9 year period from 1990 to 1998. Assume that the index of production for each of the four sectors is set at 100 in
1989. Further, the four sectors manufacturing, mining and quarrying, electricity, and chemicals, respectively, constituted 20%. 15%. 10% and
15% of total industrial production in 1989.

[CAT 2000]

5. Which is the sector with the highest growth during the period 1989 and 1998?
3 Marks

1) Manufacturing

2) Mining and quarrying

3) Electricity

4) Chemicals

Solution:
In the graph of electricity there is no negative growth registered even in a single year and there is a good constant growth in all the
years.

Actual calculations will take a very long time.

For theoretical purposes, electricity growth would be [100 (1.08)(1.085)(1.05) ... (1.06)] − 100.

Hence, option 3.

6. The overall growth rate in 1991 of the four sectors together is approximately
3 Marks

1) 10%

2) 1%

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3) 2.5%

4) 1.5%

Solution:
In 1989, the production of the Manufacturing, Mining and Quarrying, Electricity and Chemical sectors is in the ratio 20 : 15 : 10 : 15

Let the productions of these sectors in 1989 be 20x, 15x, 10x and 15x respectively.

The productions of these sectors in 1990 and 1991 are as in the following table:

The closest option is 1.5%

Hence, option 4.

7. When was the highest level of production in the manufacturing sector achieved during the nine year period 1990-1998?
3 Marks

1) 1998

2) 1995

3) 1990

4) Cannot be determined

Solution:
As the production is continuously increasing except for one year, the highest production has to be in the year 1998.

Hence, option 1.

8. When was the lowest level of production of the mining and quarrying sector achieved during the nine year period 1990-1998?
3 Marks

1) 1996

2) 1993

3) 1990

4) Cannot be determined

Solution:
From the graph we can observe that the growth in the mining and quarrying sector becomes negative in the year 1993 for the first
time.

∴ Production in 1993 = 1.04 × 1.01 × 1.01 × 0.97 ≈ 1.03 times

This is lower than the value in 1990.

Hence, option 2.

9. The percentage increase of production in the four sectors, namely, manufacturing, mining & quarrying, electricity and chemicals,
3 Marks taken together, in 1994, relative to 1989, is approximately

1) 25

2) 20

3) 50

4) 40

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Solution:
Let the base is 100 in 1989.

∴ Cumulative contribution of the four sectors in 1989 = 20 + 15 + 10 + 15 = 60

In 1994, the four sectors are

Manufacturing = 100 + 9 − 1 + 3 + 6 + 9 = 126

Mining and quarrying = 100 + 4 + 1 + 1 − 3 + 6 = 109

Chemicals = 100 + 8 + 1 + 2 + 6 + 8 = 125

Electricity = 100 + 8.5 + 9 + 5 + 7.5 + 9 = 139

Note: The actual values are slightly more than what we have calculated above as the growth is multiplied not added. But we can get a
closer answer by adding also because the option values are not so close.

Multiplying with the respective weights, we get,

Cumulative weight = (126 × 0.2) + (109 × 0.15) + (139 × 0.10) + (125 × 0.15) = 74.2

Hence, option 1.

10. It is known that the index of total industrial production in 1994 was 50 percent more that in 1989. Then, the percentage increase in
production between 1989 and 1994 in sectors other than the four listed above is
3 Marks

1) 57.5

2) 89.5

3) 127.5

4) 47.5

Solution:
If total industrial production in 1989 is 100, then in 1994 it is 150.

From the previous question,

Contribution of 4 sectors in 1989 = 60

Contribution of 4 sectors in 1994 = 74.2

∴ Contribution from other sectors in 1989 = 100 – 60 = 40

∴ Contribution from other sectors in 1994 = 150 – 74.2 = 75.8

Hence, option 2.

Group Question

Answer the following questions based on the information given below.

ABC Ltd. produces widgets for which the demand is unlimited and they can sell all of their production. The graph below describes the monthly
variable costs incurred by the company as a function of the quantity produced. In addition, operating the plant for one shift results in a fixed
monthly cost of Rs. 800. Fixed monthly costs for second shift operation are estimated at Rs. 1200. Each shift operation provides capacity for
producing 30 widgets per month.

Note : Average unit cost, AC = Total monthly costs/monthly production, and

Marginal cost, MC is the rate of change in total cost for unit change in quantity produced.

[CAT 2000]

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11. Total production in July is 40 units. What is the approximate average unit cost for July?
3 Marks

1) 3600

2) 90

3) 140

4) 115

Solution:
Total monthly costs = Fixed Cost + Variable Cost

∴ Total monthly cost for the month of July = (800 + 1200) + 3600 = Rs. 5600

Hence, option 3.

12. ABC Ltd. is considering increasing the production level. What is the approximate marginal cost of increasing production from its July
3 Marks level of 40 units?

1) 110

2) 130

3) 240

4) 160

Solution:
Total cost for 41 units = 800 + 1200 + 3700 = 5700

Total cost for 51 units = 800 + 1200 + 5000 = 7000

∴ Total cost for 10 units = 7000 − 5700 = 1300

∴ Cost per unit = Marginal Cost = Rs. 130

Hence, option 2.

13. From the data provided it can be inferred that, for production levels in the range of 0 to 60 units.
3 Marks

1) MC is an increasing function of production quantity.

2) MC is a decreasing function of production quantity.

3) Initially MC is a decreasing function of production quantity, attains a minimum and then it is an increasing function of
production quantity.

4) None of the above.

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Solution:
From the table below it can be inferred that none of the options 1, 2 and 3 are true because MC keeps on fluctuating.

Hence, option 4.

14. Suppose that each widget sells for Rs 150. What is the profit earned by ABC Ltd. in July? (Profit is defined as the excess of sales
3 Marks revenue over total cost.)

1) 2400

2) 1600

3) 400

4) 0

Solution:
Sales Revenue = 150 × 40 = 6000

Total Cost for 40 widgets in July = 5600

∴ Profit = 6000 – 5600 = Rs. 400

Hence, option 3.

15. Assume that the unit price is Rs. 150 and profit is defined as the excess of sales revenue over total costs. What is the monthly
3 Marks production level of ABC Ltd. at which the profit is highest?

1) 30

2) 50

3) 60

4) 40

Solution:
Profit = Sales Revenue – Total cost

Profit at 30 units = (150 × 30) – (800 + 2500)

= 4500 – 3300

= Rs. 1200

∵ Second shift charges will be incurred as the cost when the number of widgets are more than 30.

Profit at 40 units = (150 × 40) – (800 + 1200 + 3700)

= 6000 – 5700

= Rs. 300

Profit at 50 units = (150 × 50) – (800 + 1200 + 5000)

= 7500 – 7000

= Rs. 500

Profit at 60 units = (150 × 60) – (800 + 1200 + 6700)

= 9000 – 8700

= Rs. 300

∴ Profit at 30 units will be maximum.

Hence, option 1.

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16. For monthly production level in the range of 0 to 30 units

3 Marks

1) AC is always higher than MC.

2) AC is always lower than MC.

3) AC is lower than MC up to a certain level and then is higher than MC.

4) None of the above is true.

Solution:
From the table in the solution of the third question of the set, it is clear that none of the statements is true.

Hence, option 4.

Group Question

Answer the following questions based on the information given below.

Figure 1 shows the amount of work distribution, in man-hours, for a software between offshore and onsite activities. Figure 2 shows the estimated
and actual work effort involved in the different offshore activities in the same company during the same period. [Note: Onsite refers to work
performed at the customer's premise and offshore refers to work performed at the developer's premise.]

[CAT 2001]

17. Which of the work requires as many man-hours as that spent in coding?
3 Marks

1) Offshore, design and coding

2) Offshore coding

3) Testing

4) Offshore, testing and coding

Solution:
Man-hours spent in coding = offshore coding + onsite coding = 410 + 100 = 510

Now, total man-hours spent in offshore design and offshore coding = 100 + 410 = 510

Hence, option 1.

18. Roughly what percentage of the total work is carried out onsite?
3 Marks

1) 40 percent

2) 20 percent

3) 30 percent

4) 50 percent

Solution:
Total man-hours spent on offshore work = 100 + 410 + 290 = 800

And total man-hours spent on onsite work = 90 + 100 + 150 = 340

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And total man-hours spent on onsite work = 90 + 100 + 150 = 340

∴ Percentage onsite work = 340/(800 + 340) ≈ 30%

Hence, option 3.

19. The total effort in man-hours spent onsite is nearest to which of the following?
3 Marks

1) The sum of the estimated and actual effort for offshore design

2) The estimated man-hours of offshore coding

3) The actual man-hours of offshore testing

4) Half of the man-hours of estimated offshore coding

Solution:
Total man-hours spent on onsite work = 90 + 100 + 150 = 340

Sum of the estimated and actual effort for offshore design = 100 + 100 = 200

Estimated man-hours of offshore coding = 410

Actual man-hours of offshore testing = 300

Half of the man-hours of estimated offshore coding = 205

∴ Total man-hours spent on onsite work is more closer to actual man-hours of offshore testing.

Hence, option 3.

20. If the total working hours were 100, which of the following tasks will account for approximately 50 hours?
3 Marks

1) Coding

2) Design

3) Offshore testing

4) Offshore testing plus design

Solution:
Using the data from the previous question.

Total amount of work = 800 + 340 = 1140

Total coding man-hours = 410 + 100 = 510

Total design man-hours = 90 + 100 = 190

Total offshore testing man-hours = 290

Total offshore testing plus design man-hours = 290 + 190 = 480

50% of 1140 = 570

510 is more closer to 570.

Hence, option 1.

21. If 50 percent of the offshore work were to be carried out onsite, with the distribution of effort between the tasks remaining the same,
3 Marks the proportion of testing carried out offshore would be

1) 40 percent

2) 30 percent

3) 50 percent

4) 70 percent

Solution:
Man-hours required for testing offshore = 290

50% of this is now carried out onsite.

∴ Man-hours for testing offshore = 290 − 145 = 145

And man-hours for testing onsite = 150 + 145 = 295

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Total man-hours of testing = 145 + 295 = 440

∴ Required percentage = (145 × 100)/440 ≈ 33%

Hence, option 2.

22. If 50 percent of the offshore work were to be carried out onsite, with the distribution of effort between the tasks remaining the same,
3 Marks which of the following is true of all work carried out onsite?

1) The amount of coding done is greater than that of testing

2) The amount of coding done onsite is less than that of design done onsite

3) The amount of design carried out onsite is greater than that of testing

4) The amount of testing carried out offshore is greater than that of total design

Solution:

From the table, amount of coding done is greater than testing for onsite work.

Hence, option 1.

Group Question

Answer the following questions based on the information given below.

There are six companies, 1 through 6. All of these companies use six operations, A through F. The following graph shows the distribution of
efforts put in by each company in these six operations.

[CAT 2001]

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23. Suppose effort allocation is interchanged between operation B and C, then C and D, and then D and E. If companies are then ranked
3 Marks in ascending order of effort in E, what will be the rank of company 3?

1) 2

2) 3

3) 4

4) 5

Solution:
If we will interchange the efforts allocated to various operations, then the values of B will be assigned indirectly to values of E.

∴ According to B, the rank of company 3 is third in ascending order.

Hence, option 2.

24. A new technology is introduced in company 4 such that the total efforts for operations B through F get evenly distributed among
3 Marks these. What is the change in the percentage of effort in operation E?

1) Reduction of 12.3

2) Increase of 12.3

3) Reduction of 5.6

4) Increase of 5.6

Solution:
Total of B, C, D, E and F for company 4 = 100 − 18.5 = 81.5

After introducing the new technology the value of E = 81.5/5 = 16.3

∴ The change in the value of E = 16.3 − 28.6 = −12.3

Hence, option 1.

25. Suppose the companies find that they can remove operations B, C and D and redistribute the effort released equally among the
3 Marks remaining operations. Then, which operation will show the maximum across all companies and all operations?

1) Operation E in company 1

2) Operation E in company 4

3) Operation F in company 5

4) Operation E in company 5

Solution:

The value for each of the options is calculated as given in the table.

Hence, option 4.

Group Question

Answer the following questions based on the information given below.

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Answer the following questions based on the information given below.

The questions are based on the pie charts given below. Chart 1 shows the distribution of twelve million tons of crude oil transported through
different modes over a specific period of time. Chart 2 shows the distribution of the cost of transporting this crude oil. The total cost was Rs. 30
million.

[CAT 2001]

26. The cost in rupees per ton of oil moved by rail and road happens to be roughly
3 Marks

1) 3

2) 1.5

3) 4.5

4) 8

Solution:

≈ 1.5
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≈ 1.5

Hence, option 2.

27. From the charts given, it appears that the cheapest mode of transport is
3 Marks

1) Road

2) Rail

3) Pipeline

4) Ship

Solution:
Ratio of the cost of transportation of crude oil per ton by Rail, Road, Ship and Pipeline are calculated below.

∴ Road is the cheapest mode of the transport.

Hence, option 1.

28. If the costs per ton of transport by ship, air and road are represented by P, Q and R respectively, which of the following is true?
3 Marks

1) R>Q>P

2) P>R>Q

3) P>Q>R

4) R>P>Q

Solution:
From the calculations in the previous question, Road is the cheapest mode of transport of crude oil.

∴ Only option 3 satisfies this condition.

Hence, option 3.

Group Question

Answer the following questions based on the information given below.

The chart given below indicates the annual sales tax revenue collections (in crores of rupees) of seven states from 1996 to 2001.

[CAT 2002]

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29. If for each year, the states are ranked in terms of descending order of sales tax collections, then how many states don't change their
3 Marks ranking more than once over the five years?

1) 1

2) 5

3) 3

4) 4

Solution:

The table given above indicates the ranks according to the annual sales-tax revenue collections of seven states from 1996-97 to
2000-01.

WB, TN and MA have the ranks 7, 2, and 1 respectively over the five years.

AP and KA change their ranks only once, in 1997-98.

∴ There are five states for which the ranks didn’t change more than once.

Hence, option 2.

30. Which of the following states has changed its relative ranking most number of times when you rank the states in terms of the
3 Marks descending volume of sales tax collections each year?

1) Andhra Pradesh

2) Uttar Pradesh

3) Karnataka

4) Tamil Nadu

Solution:
From the table given in the solution of the previous question, we see that UP and GU have changed their rankings twice (in the
years1997-98 and 2000-01).

Hence, option 2.

31. The percentage share of sales tax revenue of which state has increased from 1997 to 2001?
3 Marks

1) Tamil Nadu

2) Karnataka

3) Gujarat

4) Andhra Pradesh

Solution:

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Similarly calculating for other states, we get:

∴ We can see that the percentage share of sales tax revenue has increased only for AP.

Hence, option 4.

32. Which pair of successive years shows the maximum growth rate of tax revenue in Maharashtra?
3 Marks

1) 1997 to 1998

2) 1998 to 1999

3) 1999 to 2000

4) 2000 to 2001

Solution:
Growth rate of tax revenue in MA for 1997-98

Growth rate of tax revenue in MA for 1998-99

Growth rate of tax revenue in MA for 1999-00

Growth rate of tax revenue in MA for 2000-01

Hence, option 3.

33. Identify the state whose tax revenue increased exactly by the same amount in two successive pair of years?
3 Marks

1) Karnataka

2) West Bengal

3) Uttar Pradesh

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4) Tamil Nadu

Solution:
For Karnataka the increase from the year 1998-1999 to 1999-2000 and the increase from the year 1999-2000 to 2000-2001 is the
same.

Increase from 1998-1999 to 1999-2000 = 4839 – 4265 = 574

Increase from 1999-2000 to 2000-2001 = 5413 – 4839 = 574

Hence, option 1.

34. Which state below has been maintaining a constant rank over the years in terms of its contribution to the total tax collections?
3 Marks

1) Andhra Pradesh

2) Karnataka

3) Tamil Nadu

4) Uttar Pradesh

Solution:
From the table given in the solution of the first question of the set, it is seen that WB, TN and MA have a consistent rank.

∴ From the given options, only Tamil Nadu has been maintaining a constant rank.

Hence, option 3.

Group Question

Answer the following questions based on the information given below.

Chart A represents the distribution by value of top 6 suppliers of MFA Textiles in 1995. The total value of Chart A is 5760 million Euro.

Chart B represents the distribution by quantity of top 6 suppliers of MFA Textiles in 1995. The total value of Chart B is 1.05 million tons.

[CAT 2002]

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35. The country which has the highest average price is:
3 Marks

1) USA

2) Switzerland

3) Turkey

4) India

Solution:
The highest ratio of the percentages will be the highest average price because the multiplying factor is common for all.

∴ Switzerland has the highest average price.

Hence, option 2.

36. The average price (Euro per kg) in Turkey is roughly:

3 Marks

1) 6.20

2) 5.80

3) 4.20

4) 4.80

Solution:
Distribution value of Turkey = 16% of 5760 million Euro

Distribution quantity of Turkey = 15% of 1.05 million tons

Hence, option 2.
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Hence, option 2.

Group Question

Answer the following questions based on the information given below.

The length of an infant is one of the measures of his/her development in the early stages of his/her life. The figure below shows the growth chart of
four infants in the first five months of life.

[CAT 2003 Leaked Test]

37. After which month did Seeta's rate of growth start to decline?
3 Marks

1) Second month

2) Third month

3) Fourth month

4) Never

Solution:
It starts to decline after the 3rd month because the slope of the line depicting her development starts to decrease after the 3rd month.

Hence, option 2.

38. Who grew at the fastest rate in the first two months of life?
3 Marks

1) Geeta

2) Seeta

3) Ram

4) Shyam

Solution:
Geeta grew at the fastest rate because her development line has the maximum slope.

Hence, option 1.

39. The rate of growth during the third month was the lowest for ___.
3 Marks

1) Geeta

2) Seeta

3) Ram

4) Shyam

Solution:
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Rate of growth during the third month was the lowest in case of Geeta because the slope of her development line is negative while it
is positive for the 2nd month.

Hence, option 1.

40. Among the four infants, who grew the least in the first five months of life?
3 Marks

1) Geeta

2) Seeta

3) Ram

4) Shyam

Solution:
Taking approximate values for the growth rates of the infants we get:

Growth of Seeta in first five months = 58 – 50 = 8

Growth of Geeta in first five months = 62 – 49 = 13

Growth of Ram in first five months = 63 – 52 = 11

Growth of Shyam in first five months = 63 – 54 = 9

Though the growth of Seeta and Shyam is approximately the same but looking at the graph we can see that growth of Seeta is less
as compared to Shyam.

Hence, option 2.

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