11july20071111111 Take Test: MBCE701D-Economics

& Management Decisions-Jan 21-Assignment1

QUESTION 1
1. One of the most important differences between a firm‟s economic profit and its accounting
profit is the subtraction of
"Costs incurred when hiring labor, capital, and land."
Any taxes on the retained earnings of the firm
Any explicit cost incurred by the entrepreneur for risk taking
Any implicit charges for the use of capital owned by the entrepreneur.

4 points
QUESTION 2
1. "If the price increases, there will be more producers as the objective of a business is to make a
profit"

True

False

4 points
QUESTION 3
1. "If a 20% fall in price of a commodity brings about a 40%, then the demand for the commodity
will be termed as-"
Inelastic
Perfectly elastic
Highly elastic
Perfectly inelastic

4 points
QUESTION 4
1. Demand of the commodity depends upon
Price
Income
price of related goods
all of the above

4 points
QUESTION 5
1. "As income increases, consumers purchase more goods and services and vice-versa"

True

False

4 points
QUESTION 6
1. Income refers to which type of concept?
 Flow Concept
Stock Concept

2 points
QUESTION 7
1. Highly priced commodities have which kind of demand?
Inelastic
Elastic
unitary elastic
perfectly inelastic

2 points
QUESTION 8
1. Supply is said to be elastic when the quantity supplied changes more than proportionately to the
change in price.

True

False

2 points
QUESTION 9
1. GDP measures
a country's income
real income
money income
personal disposable income

2 points
QUESTION 10
1. Who assesses the change in consumer preferences
managerial economist
economist
Manager
supervisor

2 points
QUESTION 11
1. The growth of electronic commerce has been limited by the fact that it increases the costs to
retailers of executing sales.

True

False

2 points
QUESTION 12
1. What is the main economic problem?
 scarcity of resources
abundance of resources

2 points
QUESTION 13
1. Average fixed cost can be obtained through
AFC=TFC/number of units produced
TC/TFC
TFC-TVC
none of the above

2 points
QUESTION 14
1. Unitary elastic demand rarely occurs in practice.

True

False

2 points
QUESTION 15
1. As consumption increases the marginal utility also increases

True

False

2 points
QUESTION 16
1. AVC=TVC/no. of units produced

True

False

2 points
QUESTION 17
1. Normal goods have positive elasticity

True

False

2 points
QUESTION 18
1. Demand forecasting is the pre-requisite for production planning

True

False

2 points
QUESTION 19
1. Which line shows the total expenditure or cost of the firm when only labour and capital is used
by the firm?
An Isoquant
An indifference curve
Price Line
Demand Curve

2 points
QUESTION 20
1. In a market-based economy majority of the economic decisions are taken by private households
and firms who interact in free markets backed by a system of prices to take a decision regarding
the allocation of resources.

True

False

3 points
QUESTION 21
1. Historical cost is same as replacement cost

True

False

3 points
QUESTION 22
1. Which of the following is not considered as a factor of production?
money
land
unskilled labour
machinery

3 points
QUESTION 23
1. Which statement is true of the basic economic problem?
the problem will exist as long as resources are limited and desires are unlimited
the problem exists only in less developed countries
the problem will disappear as production expands
the advancement of technology will cause the problem to disappear

3 points
QUESTION 24
1. What was the form of money in ancient period?
grain and cattle
metallic money
plastic money
 credit money

1 points
QUESTION 25
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 26
1. Two goods have to be consumed simultaneously are
substitutes
complementary
identical
none of these

1 points
QUESTION 27
1. What is Repo Rate?
it is the rate at which RBI sells government securities from banks
it is the rate at which RBI buys government securities from banks
it is the rate at which RBI allows small loan in the market
None of the above

1 points
QUESTION 28
1. In which city is the Head Office of Reserve Bank of India located?
Mumbai
Calcutta
Chennai
J&K

1 points
QUESTION 29
1. If the price elasticity is between 0 and 1, demand is
inelastic
elastic
perfectly elastic
unitary elastic

1 points
QUESTION 30
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 31
1. A monopolized market is in long-run equilibrium when
zero economic profit is earned by the monopolist.
production takes place where price is equal to long-run marginal cost and long-run
average cost.
production takes place where long-run marginal cost is equal to marginal revenue and
price is not below long-run average cost.
All of the above are correct.

1 points
QUESTION 32
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 33
1. The financial year in India is
April 1 to March 31
January 1 to December 31
March 1 to April 30
March 16 to March 15

1 points
QUESTION 34
1. The Imperial Bank of India, after its nationalization came to be known as
State Bank of India
Union Bank of India
Vijaya Bank
Punjab National Bank

1 points
QUESTION 35
1. At which point Marginal cost cuts the average variable cost ?
point of inflexion
point of satiety
 shutdown point

1 points
QUESTION 36
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 37
1. Law of Diminishing Marginal Utility states that
Utility initially increases and then after that diminishes at every point
total utility diminishes with the consumption of each additional unit
Utility always falls irrespective of consumption of a good
the marginal utillity derived from consumption of an additional unit of a commodity
always diminishes
1 points
QUESTION 38
1. Who has given scarcity definition of economics ?
Adam Smith
Marshall
Robbins
Robertson

1 points
QUESTION 39
1. To help fight a recession, the government could
lower interest rates by decreasing the cash rate.
decrease taxes to increase aggregate demand.
conduct contractionary fiscal policy by raising taxes
decrease government spending to balance the budget.

1 points
QUESTION 40
1. The prices statutorily determined by the Government for certain important goods like steel,
cement, etc is called
mark up pricing
Customary Pricing
all of the above
Adminsitered Prices
 1 points
QUESTION 41
1. The economic term for the costs associated with negotiating and enforcing a contract is
opportunity costs
real costs
functional costs
transaction costs

1 points
QUESTION 42
1. In case of complimentary goods, cross elasticity of demand will be
negative
zero
unitary
infinite

1 points
QUESTION 43
1. "Human Welfare is the subject of Economics.” This statement is associated with the name of which of the
economists ?
Marshall
Robbins
Adam Smith
All of these

1 points
QUESTION 44
1. A monopolist is a
price maker
price taker
both
none of these

1 points
QUESTION 45
1. After State Bank of India, which bank has the largest number of offices?
Punjab National Bank
Vijaya Bank
Syndicate Bank
Indian Overseas Bank

1 points
QUESTION 46
1. Inflation benefits
 Debtors
creditors
fixed income groups
agricultural farmers

1 points
QUESTION 47
1. A cause of inflation is
increase in money supply
increase in money supply and fall in production
fall in production
decrease in money supply and fall in production

1 points
QUESTION 48
1. A monopoly producer usually earns
abnormal profits
normal profits
losses
all of the above

1 points
QUESTION 49
1. A monopolistically competitive industry has
a small number of large firms.
differentiated products
significant barriers to entry
mutually dependent firms

1 points
QUESTION 50
1. Whose signature is found on one rupee currency note?
Finance Secretary of India
Governor,RBI
Incorrect

1 points
QUESTION 51
1. Delphi method is used for
Judgemental forecast
Time series forecast
Associative Model
all of the above
 1 points
QUESTION 52
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 53
1. Setting a price below that of the competition is called
Skimming Pricing
Penetration Pricing
Market defence
Predatory Pricing

1 points
QUESTION 54
1. The Engel curve passes through the tendency points of
isoquant and budget line
IC curve and budgetline

1 points
QUESTION 55
1. A price- and quantity-fixing agreement is known as
price concentration
game theory
an oligopoly
collusion

1 points
QUESTION 56
1. A characteristic of monopolistic competition is that each firm
faces perfectly elastic demand.
faces a downward-sloping demand curve.
has a perfectly inelastic supply
has a perfectly elastic supply.
1 points
QUESTION 57
1. Inflation initiated by the the increase in aggregate demand is termed as
Demand Pull inflation
Cost push inflation
Stagflation
 1 points
QUESTION 58
1. In which situation double coincidence of wants is the most suitable?
barter system
monetary system
Incorrect

1 points
QUESTION 59
1. If a demand curve of a community is parallel to OY-axis then it shows
E=0
E<1
E>1
E=1

1 points
QUESTION 60
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 61
1. Who signs the ten rupee note?
Governor, RBI
Minstry of finance
Incorrect

1 points
QUESTION 62
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 63
1. Actual saving is also equal to
planned investment
savings in form of deposits
 savings in home safe account
both a and b

1 points

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