Economics & Management Decisions - Assignment 1

Question 1

1. If the price of any complementary good rises

demand curve shifts to the left

demand curve shifts to the right

demand curve move downwards

demand curve moves upwards

4 points

Question 2

1. "If the demand for a good is inelastic, an increase in its price will cause the total expenditure of the
consumers of the good to"

Increase

Decrease

Remains the same

becomes zero

4 points

Question 3

1. "In the case when a commodity is preferred over another commodity then for each combination of the
two products on an indifference curve, the curve becomes convex to the origin."

True

False

4 points

Question 4

1. Change in Quantity supplied is same as Change in supply

True

False

4 points
Question 5

1. "Where Total Product is maximum, Marginal Product is zero"

True

False

4 points

Question 6

1. Which curve is a function relating to the quantity purchased of a commodity to the level of money
income?

Engel curve

Envelope curve

demand curve

supply curve

2 points

Question 7

1. If the price rise, the direct real burden of public debt will

fall

rise

2 points

Question 8

1. Fiscal deficit in the Union budget means

the difference between current expenditure and current revenue

difference between public expenditure and public revenue

difference between private expenditure and private revenue

2 points
Question 9

1. If a decrease in income causes an individual's demand curve for a good to shift to the left, then the good
is inferior.

True

False

2 points

Question 10

1. The bandwagon effect is the exception to the law of demand.

True

False

2 points

Question 11

1. Who is the father of Economics?

Adam Smith

Marshall

Viner

Walker

2 points

Question 12

1. Middle-class life styles are fundamentally different in different countries.

True

False

2 points

Question 13

1. What is the other name of shift in demand?

Change in demand
 change in quantity demanded

2 points

Question 14

1. The elasticity of demand describes

the responsiveness of quantity demanded to changes in price

the responsiveness of price to the changes in demand.

2 points

Question 15

1. National Income is studied under Macroeconomics

True

False

2 points

Question 16

1. Giffen goods are goods

which are inferior

which are normal

which are inexpensive necessities

2 points

Question 17

1. Boom refers to a situation of fall in prices

True

False

2 points
Question 18

1. The equilibrium of the firm occurs when

MC=MR

AC=AR

MC=SAC

None of the above

2 points

Question 19

1. Supply curve is the graphical representation of the supply schedule

True

False

2 points

Question 20

1. The Engel curve passes through the tendency points of

isoquant and budget line

IC curve and budgetline

1 points

Question 21

1. Which rates are reviewed by the RBI at the time of periodical review of the policy?

Bank rate, saving bank rate and repo rate

call rate and bank rate

repo rate

reverse repo rate

1 points
Question 22

1. In which denomination were India's first bimetallic coins issued in the year 2009?

Rs. 10

Rs.5

Rs. 20

Rs. 2

1 points

Question 23

1. If demand curve of commodity is parallel to Y axis then it shows

highly elastic

perfectly inelastic

fairly inelastic

moderately elastic

1 points

Question 24

1. A commodity is referred to as normal if the quantity demanded increases with the increase in income of
the consumer.

True

False

1 points

Question 25

1. Shut down point is one where a firm

cannot cover its variable costs

can cover variable costs and fixed costs

cannot cover fixed cost

none of the above

1 points
Question 26

1. Firms in monopolistic competition can achieve product differentiation by

exploiting economies of scale in production.

advertising special characteristics.

expanding plant size.

setting the price equal to average revenue

1 points

Question 27

1. How can the RBI decrease the money supply in the market?

by selling government securities

by buying government securities

by buying bonds

by selling bonds

1 points

Question 28

1. Demand Schedule is shown as

a result of change in state

function of price alone

a result of increase in the size of the family

All of the above

1 points

Question 29

1. Full cost pricing method is also known as

Full cost plus Pricing

cost plus pricing

moderate fluctuations

Marginal Costing

1 points
Question 30

1. What is the Cash Reserve Ratio?

the fraction of the deposits that commercial banks must keep with RBI

fraction of deposits kept with the commercial banks themselves for emergency purposes

fraction of deposits kept with SBI

1 points

Question 31

1. Bandwagon effect is found in

relative income hypothesis

permanent income hypothesis

life cycle hypothesis

absolute income hypothesis

1 points

Question 32

1. What are open market operations?

exchange of goods for goods

selling of currency by the RBI

Selling of gilt edged securities by the government

Sale of shares by FIIS

1 points

Question 33

1. How does paper currency has value?

it has the sanction of the Government

it does not have the sanction of the government

1 points
Question 34

1. A perfectly competitive firm has which kind of demand curve

perfectly elastic

perfectly inelastic

inelastic

elastic

1 points

Question 35

1. The rate at which banks lend to RBI is known as?

bank rate

repo rate

reverse repo rate

interest rate

1 points

Question 36

1. How many languages are used on a note of Rs.10

15

13

14

10

1 points

Question 37

1. Why the average fixed cost curve does not touch the output axis?

because AFC cannot be zero

because AFC can be zero

Incorrect

1 points
Question 38

1. The cost incurred by the firm in hiring labour is called is

explicit cost

implicit cost

marginal cost

total cost

1 points

Question 39

1. Define Recession.

The fall in prices and decline in economic activity in an economy

rise in prices

increase in economic activity

1 points

Question 40

1. A monopoly producer usually earns

abnormal profits

normal profits

losses

all of the above

1 points

Question 41

1. The compensated” demand curve is the demand curve that

shows only the income efffect

shows only the subsitution effect

shows both the income and substitution effect

shows the giffen good demand curve

1 points
Question 42

1. In which denomination were India's first bimetallic coins issued in the year 2009.

Rs 10

Rs 5

Rs 20

Rs 2

1 points

Question 43

1. In which year was the Imperial Bank of India rechristened as State Bank of India?

1955

1965

1978

1970

1 points

Question 44

1. Short term regular variations related to the calendar or time of day is known as

Trend

Seasonality

Cycles

Random Variations

1 points

Question 45

1. There are four phases of a business cycle. Identify the correct sequence of the occurrence of these
phases

Recovery, Recession,Expansion, Depression

Recovery,Expansion, Depression,Recession

Depression, Expansion, Recession, Recovery

Recovery, expansion, recession, depression

1 points

Question 46

1. The reserves held by Commercial Banks over and above the statutory minimum, with the RBI are
called

excess reserves

minimum reserves

maximum reserves

1 points

Question 47

1. Open Market Operations, one of the measures taken by RBI in order to control credit expansion in the
economy means

sale and purchase of government securities

issuance of different types of bonds

auction of gold

to make available direct finance to borrowers

1 points

Question 48

1. Features of monopoly includes

single seller

price maker

price discrimination

All of these

1 points

Question 49

1. A firm that break even after all the economic costs are paid in earning

Economic Profit

Accounting profit

Normal Profit

Supernormal profit
1 points

Question 50

1. The demand curve shows the relationship between

quantity demanded and price

quantity supplied and price

both of these

1 points

Question 51

1. In Monetary terminology, what is called the monetary base or high powered money?

the total liability of RBI

Paper notes and currency with RBI

deposits with commercial banks

1 points

Question 52

1. Which of the following is the apex institution which handles refinance for agriculture and rural
development in India?

NABARD

IDBI

RRB

SIDBI

1 points

Question 53

1. The place where bankers meet and settle their mutual claims and accounts is known as

clearing house

SBI

PNB

Syndicate Bank

1 points
Question 54

1. Inflation benefits

Debtors

creditors

fixed income groups

agricultural farmers

1 points

Question 55

1. The tax levied by the union government on income of individuals is known as

Personal Income tax

Interest tax

Wealth tax

Corporation tax

1 points

Question 56

1. Elasticity of demand when there is a substantial change in the price of a commodity can be shown
using

total outlay method

point method

arc method

percentage method

1 points

Question 57

1. The price elasticity of demand depends upon

percentage change in the quantity demanded

percentage change in price

both of these

1 points
Question 58

1. The RBI made Indian Rupee fully convertible in current account transactions related to goods and
services in the year

1985

2002

1994

2001

1 points

Question 59

1. Demand is inelastic if

a large change in quantity demanded results in a small change in price

the price elasticity of demand is greater than 1

the quantity demanded is very responsive to changes in price

the price elasticity of demand is less than 1

1 points

Question 60

1. an increase in government purchases increases the aggregate demand and shifts the AD curve to its
right. On the other hand, a decrease in the aggregate demand shifts the AD curve to its left.

True

False

3 points

Question 61

1. Which of the following is defined as the study of the aggregate economy studied as a whole?

mathematical economics

econometrics

macroeconomics

microeconomics

3 points
Question 62

1. Which of the following is not an asset held by the Commercial Banks?

Fixed Deposits

Current account deposits

credit balance with the Reserve Bank

Money lent at short notice

3 points

Question 63

1. Monopoly refers to the control over consumption

True

False

Economics & Management Decisions - Assignment 2

Question 1

1. Where is the consumer in equilibrium through indifference curve approach?

the point of tangency of a higher indifference curve with the budget line.

midpoint

OX-axis

OY-axis

2 points

Question 2

1. Wages, interest, rent, and profits are the four factors of production

True

False

2 points
Question 3

1. The arc price elasticity of demand measures the price elasticity at a point on the demand curve.

True

False

2 points

Question 4

1. The quantity of a commodity demanded by a consumer is influenced by the prices of related

commodities

True

False

2 points

Question 5

1. The third stage of Law of Variable proportions is the constant returns

True

False

2 points

Question 6

1. Who examined capitalism closely?

J.M.Keynes

Karl Marx

Viner

Walker

2 points
Question 7

1. Which type of goods have an inelastic demand?

Necessities

luxuries

comforts

2 points

Question 8

1. Individual demand is a demand by single buyer. .

True

False

2 points

Question 9

1. The marginal utility is derived from the consumption of extra unit of commodity

True

False

2 points

Question 10

1. Demand forecasting is the pre-requisite for production planning

True

False

2 points

Question 11

1. Demand means a want.

True

False
2 points

Question 12

1. An economy as a whole faces scarcity because of limited national income.

True

False

2 points

Question 13

1. Production and cost figures help managers with hiring and recruitment of the staff

True

False

2 points

Question 14

1. The demand for durable goods is inelastic.

True

False

2 points

Question 15

1. Delphi Technique is the way of getting repeated opinions of experts without their face to face
transactions

True

False

2 points

Question 16

1. Electricity has composite demand.

True
 False

2 points

Question 17

1. Money market instruments include

cash

demand deposits

treasury bills

all of these

4 points

Question 18

1. Cartels are formed in monopolistic competition

True

False

4 points

Question 19

1. "If both the demand and supply curves shift rightward, the equilibrium price definitely rises."

True

False

4 points

Question 20

1. "If a firm sells its output on a market that is characterized by many sellers and buyers, a homogeneous
product, unlimited long-run resource mobility, and perfect knowledge, then the firm is a"

a monopolist

an oligopolist

a perfect competitor

a monopolistic competitor
4 points

Question 21

1. If the waste is dumped in the river, the private cost is nil, but the social cost increases, as it is not
friendly for the society.

True

False

5 points

Question 22

1. If the consumer's weekly income rises from Rs. 300 to Rs. 320, his purchase of the good X increases
from 25 units per week to 30 units, then his income elasticity of demand for X is:

5 points

Question 23

1. If the Fed is worried about inflation and wants to raise the interest rate, it

increases the demand for money.

increases the supply of money.

decreases the demand for money

decreases the supply of money.

5 points

Question 24

1. If total cost is Rs. 8000 and N= 800, then Average cost is Rs.100

True

False

5 points
Question 25

1. Who is authorised to issue coin in India?

SBI

RBI

Ministry of Finance

High Court

1 points

Question 26

1. The tax levied by the union government on income of individuals is known as

Personal Income tax

Interest tax

Wealth tax

Corporation tax

1 points

Question 27

1. What is the range of prices for galloping inflation?

20 to 100%

20 to 30%

2 to 3%

0.8

1 points

Question 28

1. Who signs the ten rupee note?

Governor, RBI

Minstry of finance

Incorrect

1 points
Question 29

1. The measure of location which is the most likely to be influenced by extreme values in the data set is
the

range

median

mode

mean

1 points

Question 30

1. Managerial economics generally refers to the integration of economic theory with business

Ethics

management

Practice

all of the above

1 points

Question 31

1. A characteristic of monopolistic competition is

a low ratio of fixed to variable costs.

a high capital-output ratio.

product differentiation.

the absence of advertising

1 points

Question 32

1. Open Market Operations mean

purchase and sale of securities by the Central Bank

sale of bonds

purchase of bonds

none of the above

1 points

Question 33

1. Price Line is same as

production possibility frontier

iso-cost line

budget line

MR curve under perfect competition

1 points

Question 34

1. Firms in monopolistic competition have rivals that

set their prices according to the demand curves they face.

match their price decreases.

agree on a common price.

match their price increases

1 points

Question 35

1. The most appropriate measure of a country's economic growth is

GDP

NDP

Per Capita Real Income

GNP

1 points

Question 36

1. If the elasticity of demand is zero, the demand curve will be

parallel to the OX-axis

parallel to vertical axis

upward sloping 450 line

downward sloping from left to right

1 points

Question 37

1. Demand is inelastic if

a large change in quantity demanded results in a small change in price

the price elasticity of demand is greater than 1

the quantity demanded is very responsive to changes in price

the price elasticity of demand is less than 1

1 points

Question 38

1. An example of a Euro Currency is

a dollar deposit outside the US

a pound sterling deposit outside the UK

a Mark deposit outside Germany

All of the above

1 points

Question 39

1. Inflation benefits

Debtors

creditors

fixed income groups

agricultural farmers

1 points

Question 40

1. Interest Rate Policy is a part of

Monetary Policy

Industrial Policy

Fiscal Policy

None of these
1 points

Question 41

1. For a firm in monopolistic competition, the marginal cost curve intersects the average total cost curve

at no point

at the minimum average total cost.

to the left of the minimum average total cost.

to the right of the minimum average total cost.

1 points

Question 42

1. An accuracy measure that may be used to indicate any positive or negative bias in the forecast is

tracking signal

Mean Absolute deviation

Standard error

All of these

1 points

Question 43

1. As per the law of Demand, a demand curve

slopes downward from left to right

slopes downwards from right to left

slopes upward from right to left

parallel to the OY-axis

1 points

Question 44

1. Which public sector banks has the largest number of branches in foreign countries?

Bank of Baroda

PNB

OBC

SBI
1 points

Question 45

1. Charging the maximum price for each unit of the product is

first degree price discrimination

second degree price discrimination

third degree price discrimination

1 points

Question 46

1. Inflation initiated by the increase in cost of production is termed as

Cost Push Inflation

Demand Pull Inflation

Stagflation

1 points

Question 47

1. During the period of High Inflation

lendors are worse off because they are repaid with currency that is worth more

lendors are worse off because they cannot find anyone who wants a loan.

borrowers are better off because they can pay off their loans with currency that is worth less.

borrowers are worse off because they have to pay off their loans with currency that is worth
more

1 points

Question 48

1. Which of the following is known as the Gossen's first law

Law of equi-marginal utility

law of diminishing marginal utility

the law of indifference

law of substitution

1 points
Question 49

1. If the price elasticity is between 0 and 1, demand is

inelastic

elastic

perfectly elastic

unitary elastic

1 points

Question 50

1. The price elasticity of demand depends upon

percentage change in the quantity demanded

percentage change in price

both of these

1 points

Question 51

1. Which of the following is the apex institution which handles refinance for agriculture and rural
development in India?

NABARD

IDBI

RRB

SIDBI

1 points

Question 52

1. In case of complimentary goods, cross elasticity of demand will be

negative

zero

unitary

infinite

1 points
Question 53

1. Which theory is generally included under micro economics ?

Price Theory

Income theory

Employment theory

None of the above

1 points

Question 54

1. A group of firms that gets together to make price and output decisions is called

Cartel

price leadership

total cost plus pricing

a concentrated industry

1 points

Question 55

1. Gross National Product

will exceed gross domestic product if net factor payments from abroad are positive

will always exceed gross domestic product in a closed economy

will be higher in a private sector economy than in an economy where there is also a public sector
that taxes the private sector
is identical to the gross domestic product in Canada

1 points

Question 56

1. A straight-line demand curve along which the price elasticity of demand equals 0 is one that

forms a 45 degree angle with the vertical axis.

is horizontal

is vertical

forms a 60 degree angle with the horizontal axis