Subject :Economics for Engineers

( Multiple Choice Type Questions )

Choose the correct alternatives from the following :

i) Contribution margin is the

a) Excess of sale price over variable costs b) Excess of sale price over fixed costs
c) Excess of sale price over both variable and fixed costs d) None of these

ii) The firm’s decision to invest its funds in fixed and long term assets is known as
a) Assets Planning b) Capital Budgeting
c) Long Term Budgeting d) Short Term Budgeting
iii) To increase a given present value, the discount rate should be adjusted
a) Upward b) Downward
c) Cannot be determined d) None of these
iv) In Mercantile basis of accounting
a) Only Income received and Expenses paid are considered. b) Only Income Received and
Expenses paid or not are considered. c) Income and Expenses in a particular accounting period are
considered. d) None of these.
v) Economics is the study of
a) Production and consumption of goods b) Transfer of wealth to Production.
c) All aspects of countries economy d) All of these.

vi) The opportunity cost of a goods is

a) the time lost in finding it b) the quantity of other goods sacrificed to get another unit of that
goods c) the expenditure on the good d) the loss of interest in using savings
vii) Under Diminishing Balancing Method, Depreciation is charged on
a) Original Cost of Asset b) Market Value of Asset
c) Opening value of Asset of every year d) None of these
viii) The Ideal Standard of Liquid Ratio is
a) 1:1 b) 2:1 c) 1:2 d) None of these.
ix) Demand-pull inflation may be caused by:
a) An increase in costs b) A reduction in interest rate
c) A reduction in Government Spending d) An outward shift in aggregate supply

x) Financial Statement includes

a) Income Statement b) Balance Sheet
c) Income Statement & Balance Sheet d) None of these
xi) What is the relationship between Marginal Cost(MC) and Average Cost(AC) curves?
a) AC cuts the MC from Below b) MC cuts the AC from below
c) AC and MC do not cut each other. d) There is no fixed relationship.