SUBJECT NAME:B.

ECONOMICS -I
CORREC
Sr.No QUESTION TEXT OPTION_a OPTION_b OPTION_c OPTION_d T SOLUTION
OPTION
Development
1 ---------studies the functioning of an economy as a whole Macro Economics Micro Economics Welfare Economics a Macro Economics
Economics

The-------------of a chosen activity or commodity is the value of

2 Total cost Opportunity cost Marginal cost Average cost b Opportunity cost
the next best alternative that is foregone.

buyers are willing buyers are willing

buyers are willing buyers are able to
buyers purchase in and able to and able to
3 The demand for a product is the amount that--------------- to purchase at a purchase at a c
the market purchase at purchase at
given price specific price
alternative prices alternative prices
The law of demand is illustrated by a demand curve that is -----
4 horizontal vertical upward sloping downward sloping d downward sloping
-----
A normal good can be defined as one which consumers
5 prices fall prices rise incomes fall incomes rise a prices fall
purchase more of as---------
is caused by may be positive or
6 The income effect of price change -------- may be positive or negative
is always positive is always negative c
consumers tests negative
If a good is normal, then the demand curve for that good must completely
7 downward sloping upward sloping perfectly elastic a downward sloping
be ---------- inelastic
There is an direct There is an inverse
In case of most inferior goods , that are not Giffen goods , the Income effect is Substitution effect
8 There is an inverse price demand relationship
price demand c price demand
following is true always positive is negative
relationship relationship
Consumer's No change in Consumer's
______of the following is not an assumption of the Law of No future
9 income does not consumer's No change of the price of inputs
taste a income does not
Demand . uncertainities
change and preferences change
A change in the price of a commodity , with no change in change in quantity a shift in the an decrease in change in quantity
10 an increase in demand a
other determinants, results in demanded demand curve demand demanded
If there is a change in consumer's income ,with no change in The slope of the This can be shown The demand curve The demand curve
11 price or other determinants,which of the following statement demand curve will The
by ademand curve
movement onwill shift but the slope will
will shift
be unchanged
but the c will shift but the
is correct? change the same demand slope will be slope will be
 SUBJECT NAME:B. ECONOMICS -I
CORREC
Sr.No QUESTION TEXT OPTION_a OPTION_b OPTION_c OPTION_d T SOLUTION
OPTION
If the demand equation is given as Dx = 150 - 5 Px,then at 50
12 RS 10 RS 20 RS 30 RS 40 b RS 20
units quantity demanded, the price will be
everything else everything else
only a change in that affects Economists are that affects
Demand curve shows how quantity demanded changes as the
13 price can shift a quantity
demand is demanded is unrelatedconcerned
to price only b demand is
price changes . It implies that
demand assumed to be with money assumed to be
constant constant
The
Studies have shown that the demand curve for a detergent The price per kg of advertisements Consumer's The price per kg of
14 powder has shifted over a period of five years.Which of the the powder has Number
for the of people living in the cityincome
product has changed
levels has a the powder has
following is least likely to be true in this case? changed has been changed changed
successful
The price elasticity of demand for a particular brand of
raisen by 5 raisen by 10
15 chocolate is estimated to be -2. If quantity demand has fallen by 5 percent fallen by 10 percent a fallen by 5 percent
percent percent
increased by 10 percent, price must have
proportion of
avaibility of nature of the consumer's
16 Price elasticity at a given price is not affected by a change in supply c a change in supply
substitutes commodity income spent on
the commodity
When demand is relatively inelastic, price and total revennue
17 same opposite negative positive a same
changes take place in the _______ direction.
When TR is increasing with every fall in price, the price
18 equal to one greater than one less than one equal to zero b greater than one
elasticity of demand is
19 Average revenue is equal to the ______ per unit of output. Marginal Revenue Price Cost Incremental Incos b Price

Which of the following methods are often used to make short Regression
20 Consumer Surveys Trend Method Moving Average a Consumer Surveys
term forecasts when quantitative data are not available? Analysis
 SUBJECT NAME:B. ECONOMICS -I
CORREC
Sr.No QUESTION TEXT OPTION_a OPTION_b OPTION_c OPTION_d T SOLUTION
OPTION
all potential useful to detect all potential
errors may occur
Which of the following is not a feature of the sample survey consumers are changes in consumers are
21 in large size possibility of consumer bia b
method? included in the consumer tastes included in the
sample
survey and preferences survey
Which of the following methods makes use of historical data Market
22 Consumer survvey End - use Statistical d Statistical
and demand determinants to forecast demannd? experiments
TP begins to rise
TP begins to MP becomes
23 Increasing marginal returns come to an end when AP intercept MP TP begins to rise at a diminising rate c at a diminising
decline negative
rate

24 When TP is maximum, MP is zero Negative Maximum Constant a Zero

TP is rising at an TP is rising at a
25 When AP is maximum, in the following statement is true TP is rising at a diminising rate
TP is constant TP is declining c
increasing rate diminising rate

26 When MP is maximum, which of the following is true? AP is equal to MP AP is declining AP is maximum AP is rising d AP is rising

In case of decreasing returns to scale, the distance between

27 Remain constant Increases Decrease None of the above b Increases
subsequent iso-quant

Short run average Long run average Long run average

28 Returns scale determine the behavior of Marginal cost Average fixed cost d
cost cost cost

Which of the following is not an example of internal Cheaper materials Division of labour Use of specialised Cheaper materials
29 Smaller percentage of inventories to total output held a
economics of scale? and equipment and specialisation capital equipment and equipment

Diminising returns Pollution and Diminising returns

30 An important cause of internal diseconomics of scale is Rising factor costs Transport congestions b
to management health hazards to management
 SUBJECT NAME:B. ECONOMICS -I
CORREC
Sr.No QUESTION TEXT OPTION_a OPTION_b OPTION_c OPTION_d T SOLUTION
OPTION
will decline with
will always have will always have
31 In the short run, a firm's fixed cost is zero can be zero if production isevery
zero increase in b
to be incurred to be incurred
output
cost of using cost of using
equal to total equal to variable
32 Implicit costs are always less than explicit costs
factors belonging d factors belonging
fixed costs costs
to the business to the business
payment of wages payment to the interest to the salary that the
33 Which of the following would be an implicit cost for a firm? salary
and salaries of that the business
supplier of rawowner would have earned bankby forworking elsewhere
borrowed c business owner
workers materials funds. would have
declines over a declines over the is influenced by declines over the
34 Average fixed cost certain output entire output is a long-run concept only decreasing returns b entire output
range range to scale range
its shape is its shape is its shape is
Which of the following statements is true of the long run it is an increasing
35 influenced by the influenced by it isthe
a declining function of output a influenced by the
average cost curve? function of output
laws of returns to law of variable laws of returns to
the lowest the maximum the lowest
the optimum firm
36 LAC is used to deter possible AC for outputthe output at which fixed cost is minimised
at lowest a possible AC for
size
producing various variable cost producing various
At the shutdown point, price is equal to average _______
37 Fixed Variable Above Below b Variable
cost.

When the fixed cost _______ the break-even point is reached

38 Falls Rises Remains constant Shiftsdown b Rises
at a higher level of uotput.

39
Opportunity Cost is always measured in terms of money utility output expenditure a money

40 More willing to substitute the commodity for other

commodities is substitution effect income effect consumption effectinvestment effect a substitution effect
 SUBJECT NAME:B. ECONOMICS -I
CORREC
Sr.No QUESTION TEXT OPTION_a OPTION_b OPTION_c OPTION_d T SOLUTION
OPTION

41
Supply curve typically slopes upward downward horizontally vertically a upward
can be Giffen can be a Giffen
42 good,but a Giffen must be a Giffen has a positively good but a Giffen
An inferior good good is not always good can be a Giffen gooddemand curvegood must
but a Giffen c good
always be must alwaysgood
an inferior
a is the quantity of b is the quantity of a is the quantity of
43 X demanded when X demanded when b is the elasticity X demanded when
In the equation , Dx = a - bPx , price is zero price is zero a is the slope of the of demand
demand curve a price is zero

44 The slope of the the availability of the income of the the availability of
The most important determinant of price elasticity is demand curve substitutes consumer
the price of other goods b substitutes
actual market based on forecast is based
45 Which is not a feature of market experiment method of use of consumer situations are observed on past statisctical
demand forecast clinics created forecast is based onconsumer
past statisctical data c data
The marginal The marginal The marginal The marginal
46 In the short run,which of the following statements describes product of a factor product of a factor product of a factor product of a factor
the precence of diminishing returns is positive and is positive and The marginal productis constant
of a factor is falling is positive and
b and negative

47 The costs are due to the factors which the enterpreneur

himself owns and employs in the firm is known as Explicit Costs Implicit Costs Economic Costs Accounting Costs b Implicit Costs
The costs are due to the contractual cash payments made by
48 the firm for purchesing or hiring the various factors are known
as Explicit Costs Implicit Costs Economic Costs Accounting Costs a Explicit Costs

49 The costs accrue directly to the individuals or private firms

engaged in relevant activity are known as Social Costs Incremental Costs Accounting Costs Private Costs d Private Costs

50 If average fixed cost is Rs 40 and average variable cost is Rs

80 for an output level of 10 , then the total cost is Rs 1200 Rs 120 Rs 40 Rs 400 a Rs 1200