Question Merged

Question Option 1 Option 2 Option 3 Option 4 A
total average
revenue is revenue is
average
total revenue at a at a
revenue is
is zero. maximum maximum
zero
Choose the correct option from the following If or a or a
marginal revenue is equal to zero minimum. minimum. 3
it is equal to total cost is
profit is at a revenue is
Choose the correct option from the following If marginal also at a
minimum maximum
average cost is at a minimum cost. maximum 1
monopolistic differentiate pure
duopoly
Identify the type of market for automobile competition. d oligopoly. oligopoly. 3
Choose the undelying economic principle for
monopolistic Natural
government providing water supply, Electricity, Monopoly Duopoly
competition. monopoly
Railway, street lights and not the private firms 4
The
market
structure
imperfect
perfect cannot be
monopoly. competition
competition. determine
.
d from the
Identify the market structure If the market demand informatio
curve for a commodity has a negative slope n given. 4
Choose which of the following is an assumption of Average Average
Output price All of the
linear breakeven analysis? variable cost fixed cost is 1
is constant above
is constant constant
Select which out of the following is not included in Free Constructi
Subsidized Old age
estimation of NI medical on of a 2
lunch pension
facilities house
Select which one is not an indicator of barometric Lagging Leading Coincidence Smoothing
technique? 3
indicator indicator indicator indicator
Choose from the following which concept traces
Production Consumption Break even Cost
relationship between cost and revenue at every level 3
analysis analysis analysis anaysis
of output
Choose about the number of firms In monopsony Many
Most retail
suppliers but Single Very large 2
sale
one buyer
Choose the economic term for the minimum expected Normal Monopoly
return to keep an enterpreneur in his present business Gross profit Net profit 3
profit profit
Sales taxes paid to the state by a retail firm are an
example of an implicit cost. TRUE FALSE 2
Business profit is equal to total revenue minus all
implicit costs. TRUE FALSE 2
A firm's total profit is generally at a maximum when
total revenue is at a maximum. TRUE FALSE 2
A firm's total profit is generally at a maximum when
total cost is at a minimum. TRUE FALSE 2
RBI decision to increase interest rate is a part of Micro Macro Both a and b None of the 2
economics economics above
Backed by purchasing power, desire to purchase Demand Price Consumption Utility 3
Tea and coffee are examples of Complementa Substitute Paired Goods Automobile 2
ry Goods Goods Goods
Which is not a measurement of elasticity of demand? Point Elasticity Time Series Arc Elasticity Percentage 2
Method Method
A period of time over which the inputs of all the factors of Short Period No period Duration Long Period 4
production can be varied.
Which of the following is not a law of return? Law of Law of Law of Law of 2
diminishing Negative Increasing Constant
Return Return Return Return
______________ to scale is caused by indivisible of fixed Negative Constant Decreasing Increasing 4
factors which are of minimum size. return return return return
A ______________ function gives the idea of inputs and Cost Supply Demand Production 1
outputs relationship.
As per law of variable proportion, producers should Stage 1 Stage 3 Stage 2 Stage 4 3
produce at which stage?
The ____________ cost is related to scarcity concept. Opportunity Economic Budgetted Actual 1
These costs do not involve any cash payment and do not Explicit Cost Implicit Cost Actual Cost Accounting 2
appear in the accounting system. Cost
Long term AC curve is also called Supply Curve Average Total Curve Plant Curve 4
Revenue Curve
Which is not a type of internal economies? Disintegration Technical Financial Managerial 1
Which is not an exception to the law of supply? Rare Articles Inelastic Goods Specualtive Agricultural 3
Goods Goods
A small increase in price leads to a larger increase in Inelastic Elastic Supply Negative Positive 2
output, i.e. supply. Supply Supply Supply
Here if the price falls supply will decrease much and if Es = 0 Es = 1 Es < 1 Es > 1 4
price raises supply will increase very much.
Which of the following is not a determinant of supply? Government Price Technology Goals of 1
Rules producer
Supply comes out of ___________. Production Business Godown Stock 4
If Total Product is divided by the number of labours, we Variable Average Marginal Investment 2
have Product Product Product
If a firm wants to introduce a new product, the initial Penetration Skimming Cost Plus Marginal 1
price of the product is kept low to capture the market. Pricing Pricing Pricing Pricing
____________ means state of rest. Equilibrium Optimum Sleeping Leisure 1
There are large number of buyers and sellers and no one Duopoly Perfect Monopoly Monopolist 2
can influence the price. Competition ic
To study relations in order to maintain __________ and Productivity Perfromance Profit Punctuality
efficiency of labour by giving incentives and motivate 1
them.
The science of choice when faced with unlimited ends Perfromance Economic Result Supply
and scarce resources having alternative uses is the 2
definition of __________
Analysis of price of the product and try to push the Conditions Situation Functions Awareness
1
product in the market as per the market_________
Managerial economics and ________ always include Finance Marketing Human Social
1
Pricing strategy and earning profit Resource Sciences
Managerial economics is used all the streams _________ Directly and Perfectly and Socially and None of the
1
and ___________ Indirectly Imperfectly Economically abve
Managerial economics refers the application of principles Operating Result Performance Decision
4
of economics in ___________ of the business making
Managerial economics has to study the market, Situation Performance Forecasting Result
determine the demand based on___________ and other 3
circumstances
The scope of Economics is _______ than the scope of Equal Wider Lower Different
2
Managerial economics
Study of market structure is a __________ of managerial Fucntion Type Scope Result
3
economics
Law of demand states Positive Negative Symmetric None of the
relation relation relation above
between price between price between 2
and demand and demand price and
demand
A flatter supply curve is Price elastic Unit price None of Price
elastic these inelastic 3
answers
At the consumer’s optimum consumption bundle The slope of The The relative All of the
the difference indifference process of above
curve equals curve is the two
the slope of tangent to the goods equals 2
the budget budget the marginal
constraint constraint rate of
substitution
Which of the following is not a property of indifference Indifference Indifference Indifference Higher
curve curves are curves are curves do indifferenc
downward bowed not cross e curves
slopping outward each other are 2
preferred
to lower
ones
Goods which are used along with some other goods is Complementa Demand Giffen goods Law of
1
known as ry goods demand
In our economy resources are? Not Available Unlimited Evreywhere Limited 4
What do you mean by utility? It is the The want It is the It uses
quantity of satisfying quantity of some of the
goods quality of goods theories of 2
produced goods supplied macro
economics
Giffen goods are also known as Inferior goods Superior goods Supportive Consumpti
2
goods on of goods
Consumer’s tastes is determined in demand as PT CT DT Only T 4
The elements of demand are Desire Backed by Willingness All of the
money to pay and above
4
part with the
money
The law of diminishing marginal utility was formulated by Prof. Marshall N H Borden Dr. alfred W.
1
Marshall Anderson
The law states that as a consumer increases the Increasing Decreasing Constant None of the
consumption of a product, the utility gained from the above 2
successive units goes on
Under the following situations the law of demand is not Giffen goods Goods in short Costly luxury All of the
4
applicable supply items above
When demand increases the curve shifts out and demand Each price One price level No price None of the
1
will be greater for level level above
Direct demand of goods is demand of those goods and Suppliers Retailers Ultimate Distributors
3
services which are directly consumed by the consumer
Other thinks remianing the same the demand for goods Law of supply Law of demand Law of Giffen
increases as the price decreases and vice-versa is the marginal goods 2
definition of utility
Inferior goods, consumed mostly by the poor people as Law of supply Law of demand Law of Giffen
essential commodities. The demand of these goods marginal goods 4
increases with a rise in price utility
When more than one commodity is required to satisfy a Joint demand Composite Income Individual
1
demand is known as demand demand demand
Any commodity can be put to many uses, and the use of it Joint demand Composite Income Individual
2
depends upon its price - Is a perfect definition of demand demand demand
The goods which can be used more than once over a Perishable Non perishable Durable Non
period of time is known as goods goods goods durable 3
goods
This demand refers to the demand of interrelated good Joint demand Cross demand Income Individual
2
demand demand
It means that demand is the function of price i.e dd=f (p) dd=f (v) dd=f (c) dd=f (f) 1
Diminishing marginal utility schedule total and _________ Total utlility Average utility Marginal None of the
3
utility utility above
The law of ___________________ is formulated by Prof. Demand Supply Dimishing Production
Marshall marginal 3
utility
The price of diamond is more in exchange but it has More Equal Less Constant
3
_______ value in use.
The law of _________ can be derived from the law of Demand Supply Dimishing Production
dimishing marginal utility marginal 1
utility
dd=f(p) means demand is the ___________ of price Function Proportion Equation None of the
1
above
__________ goods arenot essential goods and are Giffen Outdated Costly luxury Speculative
3
consumed by the rich only
______________ goods aregenerally desired by the Giffen Outdated Costly luxury Speculative
2
people and these are durable goods
_______ goods such as shares are traded in the share Giffen Outdated Costly luxury Speculative
4
market which do not follow the law of demand
Government spending excludes governemnt spending on Transfer Tax Goods and Wages and
1
_______________. payments services material
Continuity in consumption is prerequisite for Law of Revealed Indifference Marginal
diminishing preferences curve rate of
4
marginal analysis substitutio
utilities n
Cross elasticity means? An increase or A small change High fall in When the
decrease in in the price of price may price of a
the income of a product increase the product
a person changes the demand increases,
demand of a slightly or the
4
product more not at all demand for
its close
substitute
will
increase
A forecasting methods in which the whole population or Leading Trend Opinion poll None of the
3
its sample are surveyed to determine the trends indicator projection above
Which is a kind of expert opinion method for forecasting Delphi Consumer Opinion poll Trend
1
method survey projection
The businessman has to arrange for Finance, Space, A product A commodity A sell A
Manpower; material etc. This idea is known as forecasting consumptio 1
of demand of n
When the demand of a commodity is responsive to price Income Cross elasticity Price None of the
then it is known as elasticity of of demand elasticity of above 3
demand demand
Price elasticity of demand can be shown as % change in % change in % change in % change in
quantity quantity quantity quantity
demanded demanded - % demandedd demanded 3
+ % change in change in price /% change in * % change
price price in price
When two good are used at the same time to fulfill the Goods Normal goods Complement Repetative
3
demand is known as demanded ary goods goods
Under this the govt. in order to control the exploitation of
Support Administration Cost cut Governemn
the poor farmers announces the support prices of most of 1
pricing pricing pricing t pricing
the agriculture products
The market demand curve for a perfectly competitive
industry is QD=12-2P. The market supply curve is P=6 & Q=9 P=5 & Q=2 P=4 & Q=4 P=3 & Q=6 4
QS=3+P. The market will be in equilibrium if
Which of the following is a barrier to entry that typically Production of the
Production of
results in monopoly? The firm industry’s
the industry’s The firm
controls the product is
product holds an
subject to
entire supply economies of
requires a exclusive 3
of a raw large initial government
scale over a
material capital franchise
broad range of
investment
output
A natural monopoly refers to monopoly that is defended Economies of
from direct competition by scale over a A government Control over a A patent or
broad range of franchise vital input copyright
3
output
Until the
In order of Until 100% In order of
marginal
diminishing of unused income
A single-plant, multi-product firm will introduce revenue from
price plant price 3
additional products the last product
elasticity’s of capacity is elasticity’s
introduced is
demand employed of demand
equal to zero
The answer
Third-degree cannot be
First-degree Second-degree
A firm will realize the highest level of profit if it is able to price determined
price price 1
engage in discriminatio without
discrimination discrimination
n additional
information
The answer
Third-degree cannot be
First-degree Second-degree
A movie theatre that charges a lower price for matinees price determined
price price 1
than for evening showings is engaging on discriminatio without
discrimination discrimination
n additional
information
When large number of able bodied pressures of working Monetary Fiscal
Open market Depression 3
age, which are willing to work cannot get the work policy policy
It is a mechanism to regulate the money supply in an Monetary Fiscal
Bank rate Inflation 2
economy by the central bank policy policy
Your The level of
The price of The wage rate
decision to unemploym
Which of the following is a macroeconomic issue? houses in for plumbers in 4
work or stay ent in the
Oxford London
at home UK
The %
The % change in
Dividing real Dividing the
change in nominal
income by the price level,
price level income
The percentage change in one’s real income can be price level, expressed as an
minus the % minus 4
approximated by expressed as index number,
change in the %
an index by nominal
nominal change in
number income
income the price
level
The price level has doubled in 35 years. The approximate
2
annual percentage rate of increase in the price level over 50 percentage 20 percentage 5 percentage 4
percentage
this period has been:
Unemployme
Part time
The nt that is
employment The
unemployment caused by a
The main measurement of inflation is: and unemploym 3
is subject to decline in
discouraged ent rate
criticism total
workers
spending
Process of translating cash flow into equivalent dollars at Semiannual Annual cash Compounded Discounted
4
common base period is considered as cash flow flow cash flow cash flow
The cost incurred by the government for the welfare of the
Marginal cost Average cost Social cost Total cost 3
people and which improves the life of the people
Managerial economics is ___________ economics in
Macro Micro Positive Negative 2
nature
It is the study of aggregates, i.e. aggregate employment, Positive Micro Macro Normative 3
aggregate income, aggregate saving and investment, Economics Economics Economics Economics
trade cycles, government policies, etc of a nation.
Which of the following is a nature of managerial Pragmatic Opportunistic Macro Normative 1
economics?
Managerial economics is __________ economics and Positive Pragmatic Macro Applied 4
based on normative economics.
"As price increases, demand decreases". Law of Supply Law of Income Law of Price 3
Demand Elasticity of
demand
It is want satisfying power of a commodity. Demand Utility Supply Purchasing 2

power
The three elements of demand are: Desire, Backed by Willingness to Objective Money Purpose 1
Purchasing power and __________. pay
These goods represent status symbols. Associated Speculative Giffen Goods Veblen 4
Goods Goods Goods
If E<1, it is a case of Elastic Unitary Elastic Inelastic Perfectly 3
Demand Demand Elastic
When the demand of a commodity is responsive to Cross Income Price Inelasticity 2
income then it is known as Elasticity Elasticity Elasticity of
demand
Which of the following is true with reference to It is the value It is the value It is useful in It is useful
Opportunity Cost? of the next of a sacrificed decision for valuing
best use for alternative making non 1
an economic marketed
good goods
It is the market value of all the final goods and services GNP GDP Market Price Selling
2
made within the borders of a country in a year. Price
Which is not a reason behind failure of market Rise of Economic Sacrifice of Poverty
mechanism? Monopolies Instability Social 4
Welfare
A form of Govt. intervenes in the economy in which Govt. Legal Control Red Tapism Price Control Politics
3
agency uses its law making power to regulate the prices.
_________ is a method of price control. NPV Bank Rate ARR MBO 2
MRTP is related to Monopolistice Maximum Minimum Measures
Restrictive Retail Price Relative for Retail
1
Trade Trade Policy Trade
Practices Prices
Economic problem arise because of Abundant Resources are Inefficiency Inefficient 2
resources Scarce of authority use of
resources
Which of the following is not a factor of production? Labour Land Profit Capital 3
Act of satisfying one’s wants is known as Demand Aggregate Utility Consumpti 4
demand on
The branch of economics which studies the aggregate Macro Micro Managerial None of the 1
behavior of the economic system economics economics economics above
There is an inverse relationship between the quantity
demanded of a commodity and its price. TRUE FALSE 1
If the demand for a firm's output is horizontal, then
the firm is a perfect competitor. TRUE FALSE 1
Estimates of demand elasticities are used by firms to
determine optimal operational policies TRUE FALSE 1
A scatter diagram is a graph of a linear function. TRUE FALSE 2
The Delphi method generates forecasts by surveying
consumers to determine their opinions. TRUE FALSE 2
Time-series analysis generates forecasts by
identifying cause and effect relationships between TRUE FALSE 1
variables.
______________ demand forecasting is related to the
business conditions prevailing in the economy as a Macro level Industry level Firm level
whole Micro 1
______________ is the change in total revenue
Average Marginal
irrespective of changes in price or due to the effect of Total revenue Increment
revenue revenue
managerial decision on revenue al revenue 4
Demand for necessary goods (salt, rice, etc,) is
Elastic, Inelastic, Elastic, Inelastic,
______________ and demand for comfort and luxury
inelastic elastic elastic inelastic
good is_____________ 2
______________ Method is also known as Consumer
Opinion Expert Delphi
Sales‐Force –Composite method or collective opinion interview
survey opinion method
method method 1
The Importance of micro ecnomics in the managerial economics Theory of Theory of
Theory of Economics
does not inculde commodity consumer 2
factor pricing of welfare
pricing surplus
Managerial economics and HR focuses on Pricing
Planning for Required skill Forecast the strategy and
2
product demand availability cash flow earning and
profit
Cross elasticity of demand is shown as Ce= %
Ce= % change Ce= % change in Ce= % change
change in
in demand of X demand of X in demand of
demand of X
product- % product +% X product / %
product * % 3
change in the change in the change in the
change in the
price of Y price of Y price of Y
price of Y
product product product
product
Total Outlay Method is given by Dr. william
Prof. Marshall N H Borden W. Anderson 1
Marshall
Total product/ number of units of output is a formula of Average
Total product Marginal product Inputs 4
product
The change in output resulting from a unit change in one of the Average
Total product Marginal product Inputs 2
firms variable input is a definition of? product
It is the cost which has been incurred in the past activity Margin of Breakeven Historical
Total cost 4
safety point cost
Which cost is very important cost concept used in business Opportunity Explicit
Actual cost Implicit cost 2
decision cost cost
Which costs are known as supplementary costs and Opportunity Historical
Fixed cost Actual cost 1
indirect cost cost cost
SS=f (Pn, Pr,F,T,G). In this formula Pr stands for? Price of related Price of Performanc
Price 2
goods factors e review
SS=f (Pn, Pr,F,T,G). In this formula Pn stands for? Price of related Price of Performanc
Price 1
goods factors e review
Under this concept the price is fixed on the higher side and Cost plus Pricing Pricing
Marginal Cost 4
demand increases. Pricing Leadership Skimming
The want satisfying quality of goods is a definition of Demand Aggregate Utility Consumpti 3
demand on
What does it include from the following as economic Population Demand Supply Profit 1
problems of world explosion analysis analysis analysis
Which one is a quadratic equation Q = a+bL-cL2 Q = a+bL+cL2- Q = aLb None of the 2
dL3 above
Managerial Economics 1 MCQs [set-13]
301. Related to production function, MRTS stand for;
A. Marginal revenue and total sales
B. Minimum revenue from total sales
C. Marginal rate of total supply
D. Marginal rate of technical substitution

o m
.c
Answer: D
te
a
M
302. Which of the following is not coming under imperfect competition?
q
A. Oligopoly c
B. Duopoly
M
C. Monopoly
D. Monopolistic
Answer: C
303. in economics ……..means ‘a state of rest ‘or ‘stability’
A. Depression
B. Equilibrium
C. Maturity
D. growth
Answer: B
304. In perfect completion, a firm is a
A. Price maker
B. Price taker
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C. Both of the above
D. None of these
Answer: B
305. Which of the following is not a feature of monopolistic completion?
A. Large number of producers
B. Free entry and exit
C. More elastic demand

o m
D. Price competition
.c
te
Answer: D
a
q M
c
M

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'answer' of respective MCQ.
o m
.c
te
a
q M
c
M

276. The properties of indifference curves are:
A. Indifference curve slops downwards from left to right
B. Convex to the point of origin
C. Two indifference curve never cut each other
D. All of these
o m
.c
Answer: D
te
a
q M
277. Price discrimination occurs when variation in prices for a product in
different markets does not reflect variation?
c
A. Costs M
B. Price
C. Demand
D. All of these
Answer: A
278. The competitive firm’s long run supply curve is the portion of it’s
…………..curve lies above average total cost.
A. Marginal cost
B. Revenue cost
C. Fixed cost
D. All of these
Answer: A
279. Whenever marginal cost is more than …………average total cost is

falling:

A. Average total revenue
B. Average total cost
C. Average profit
D. All of these
Answer: B
280. Whenever ………..is greater than average total cost, average total cost
is rising.
o m
A. Marginal cost
.c
B. Variable cost
te
a
C. Fixed cost
q M
D. Full cost
c
Answer: A
M
281. The claim that, other things equal, the quantity supplied of a goods
rises when the price of goods raises known as:
A. Law of economics
B. Law of supply
C. Law of demand
D. All of these
Answer: B
282. The marginal revenue equation can be derived from the:
A. Demand equation
B. Supply equation
C. Cost equation
D. Price equation
Answer: A

283. Marginal revenue is ………….at the quantity that generate maximum
total revenue and negative beyond that point.
A. Zero
B. One
C. +1
D. -1
Answer: A
o m
.c
284. ------------is situation of severely falling prices and lowest level of
economic activities
te
a
A. Boom
q M
B. Recovery c
C. Recession M
D. Depression
Answer: D
285. ------------is situation with increased investment and increased price
A. Recession
B. Progress
C. Boom
D. Recovery
Answer: C
286. Which of the following is not a macroeconomic concept?
A. Business cycle
B. National income
C. Government policy

D. None of these
Answer: D
287. Where boom ends,……….. starts
A. Recovery
B. Recession
C. Progress
D. Depression
o m
Answer: B
.c
te
a period of time are
288. Factors which change over a long
called……..factors
q M
c
A. Business
B. Cyclic
M
C. Secular
D. All the above
Answer: C
289. In business cycle concept, the period (approximately) of “Kit chin

cycle” is of:
A. 5 years
B. 10 months
C. 2 years
D. 4 months
Answer: D
290. The “law of variable proportion” is first explained by
A. Edward west

B. Marshall
C. Veblen
D. Keynes
Answer: A
291. Functional relationship between input and output known as
A. Conversion
B. Production function
o m
C. Work in progress
.c
te
D. Output function
a
Answer: B
q M
c
M
292. …………..product will never be zero or negative
A. Marginal
B. Total
C. Average
D. All the above
Answer: C
293. A graph indicating different combination of inputs with different level

of output is called
A. Iso-cost map
B. BEP map
C. Input-output map
D. Iso-quant map
Answer: D
294. Which is not a property of ISOQUANT?

A. Downward sloping
B. Convex
C. Negative slope
D. Positive slope
Answer: D
295. Which of the following is not a variable input?
A. Raw material
o m
B. Power
.c
te
C. Equipment
a
D. None of these
q M
Answer: C
c
M
296. Which of the following is a short run law?
A. Law of constant return to scale
B. Law of increasing return to scale
C. Law of diminishing return
D. None of these
Answer: C
297. …………is called produced means of production
A. Land
B. Labour
C. Capital
D. Raw material
Answer: C

298. In the long run all input become …………
A. Fixed
B. Variable
C. Semi variable
D. None of these
Answer: B
299. The term “Economies” refers to o m

.c
A. Product advantage
te
a
B. Cost advantage
q M
C. Sales advantage
c
D. All of the above
M
Answer: B
300. Who classified economies of scale into internal and external?
A. Robinson
B. Marshall
C. Edward west
D. Pigue
Answer: B

o m
.c
te
a
q M
c
M

251. The condition for the long run equilibrium of a perfectly competitive
firm
A. Price=MC=AC
B. Price=TC
C. MC=AVC
o m
D. MC=MR
.c
te
Answer: A
a
q M
252. Product differentiation is the important feature of
c
A. monopoly M
B. perfect competition
C. monopolistic competition
D. monophony
Answer: C
253. The no. of firms under oligopoly is
A. 1
B. 2
C. many
D. few
Answer: D
254. The law of diminishing returns applies more to
A. agriculture

B. industry
C. services
D. commerce
Answer: A
255. The opportunity cost of a given activity is
A. the value of next best activity
B. the value of material used

o m
C. the cost of input used
.c
te
D. none of these
a
Answer: A
q M
c
M
256. The function of combining the other factors of production is done by
A. land
B. labour
C. Capital
D. Entrepreneurship
Answer: B
257. The factors used in the production
A. Land and labor
B. capital & entrepreneurship
C. both a&b
D. only capital
Answer: C
258. In a perfect market both buyers and sellers are

A. price maker
B. price giver
C. price taker
D. all the above
Answer: C
259. Which is the determinant of the pricing policy of a firm?
A. Channel of distribution
o m
B. Age of product
.c
te
C. Consumer association
a
D. All of these
q M
Answer: D
c
M
260. Information for pricing decisions involves:
A. Product information
B. Market information
C. Information at the micro level
D. All of these
Answer: D
261. Which is the reason of skimming price?
A. Inelastic demand
B. Diversion of market
C. Safer price policy
D. All of these
Answer: D

262. Which is the condition of for market penetration?
A. High price elasticity of demand in the short run
B. Savings in production costs
C. Threat of potential competition
D. All of these
Answer: D
263. Production may be defined as an act of: o m

.c
A. Creating utility
te
a
B. Earning profit
q M
C. Destroying utility
c
D. Providing services
M
Answer: A
264. The demand curve of a firm in the case of perfect competition is:
A. Parallel to output axis
B. Increasing with the output axis
C. Decreasing with the output axis
D. Complete
Answer: A
265. The implication of the kinked demand curve is reflected in a

discontinuity in the:
A. Marginal revenue curve
B. Marginal cost curve
C. Total revenue curve
D. Total cost curve
Answer: A

266. A firm that is the sole seller of a product without close substitutes
called:
A. Monopoly
B. Oligopoly
C. Competition
D. Bureaucracy
Answer: A
o m
.c
e
267. When all the productive services are increased in a given proportion,
t
a
the product is increased in the same proportion. This situation is called:
A. Law of increasing
q M
B. Situation of constant returns c
C. Fixed cost
M
D. Variable cost
Answer: B
268. Which factors is/are influencing price policy?
A. Cost of product
B. Time factor
C. Government policy
D. All of these
Answer: D
269. Pricing methods are:
A. Standard cost method
B. Learning curve method
C. Marginal cost method

D. All of these
Answer: D
270. Which is the feature of perfect competition?
A. Large number of buyers and sellers
B. Freedom of entry and exit
C. Normal profit in the long run
D. All of these
o m
Answer: D
.c
te
271. Which is/are the salient featuresa
of monopolistic competition?
q M
A. Large number of sellers
c
B. Normal profit M
C. Free entry and exit of firms in industry
D. All of these
Answer: D
272. Which are the characteristics of monopoly?
A. Single seller or producer
B. No close substitutes
C. Inelastic demand curve
D. All of these
Answer: D
273. The causes of emergence of monopoly is/are:
A. Concentration of ownership of raw materials
B. State regulation

C. Public utility services
D. All of these
Answer: D
274. Which are not the features of oligopoly?
A. Few sellers
B. Advertising and sales promotion
C. One firm
o m
D. Conflicting attitudes of firms
.c
te
Answer: C
a
275. The monopoly can be controlled by: q M
c
A. Social boycott M
B. Antimonopoly legislation
C. Public ownership
D. All of these
Answer: D

o m
.c
te
a
q M
c
M

226. Cost plus pricing is also called
A. margin pricing
B. full cost pricing
C. mark up pricing
D. all the above

o m
.c
Answer: D
te
a
M
227. Average cost pricing is also called as
q
A. cost plus pricing c
B. marginal cost pricing
M
C. margin pricing
D. both a & c
Answer: D
228. Under which method, the cost is added with the predetermined target
rate of return on capital invested
A. Cost plus pricing
B. Target pricing
C. Mark up pricing
D. None of these
Answer: B
229. Target pricing is also called as
A. Cost plus pricing

B. Rate of return pricing
C. Mark up pricing
D. None of these
Answer: B
230. Under the Marginal cost pricing, the price is determined on the basis
of;
A. Fixed cost
o m
B. Variable cost
.c
C. Total cost
te
a
D. Average cost
q M
Answer: B
c
M
231. Cinema Theater, telephone bills etc..are following
A. Full cost pricing
B. Marginal cost pricing
C. Differential pricing
D. Mark up pricing
Answer: C
232. Price discrimination is also called as
A. Discriminatory pricing
B. Differential pricing
C. Average cost pricing
D. a & b above
Answer: D

233. The method of pricing which is also known as Parity pricing and
Acceptance pricing is
A. Differential pricing
B. Going rate pricing
C. Discriminatory pricing
D. Mark up pricing
Answer: B
o m
.c
234. The pricing of cup of tea or coffee, is an example of
te
A. Mark up pricing a
B. Marginal cost pricing
q M
c
C. Conventional pricing
D. Cost plus pricing

M
Answer: C
235. ……………………is the method of leadership pricing
A. Going rate pricing
B. Follow up pricing
C. Barometric pricing
D. Parity pricing
Answer: C
236. Generally used strategy for pricing new products is/are
A. Skimming price strategy
B. Penetration price strategy
C. Both a & b
D. None of these
Answer: C

237. …………… provide guidelines to carry out ……………
A. Pricing strategies, pricing policies
B. Pricing policies, pricing strategies
C. Pricing rules, pricing policies
D. Pricing rules, pricing strategies
Answer: B
o m
238. Psychological pricing is also called as;
.c
te
A. Penetration pricing
a
B. Skimming pricing
q M
C. Odd pricing
c
D. None of these M
Answer: C
239. Prices of Bata shoe as Rs.99.99, this pricing is
A. Mark up pricing
B. Odd pricing
C. Marginal cost pricing
D. Follow up pricing.
Answer: B
240. Which one of the following is not a reason for adopting skimming
price strategy
A. When the demand of new product is relatively inelastic.
B. When there is no close substitutes
C. Elasticity of demand is not known
D. Product has high price elasticity in the initial stage
Answer: D

241. Which one of the following is not a reason for adopting penetration
price strategy
A. Product has high price elasticity in the initial stage.
B. The product is accepted by large number of customers.
C. Economies of large scale production available to firm
D. When the buyers are not able to compare the value and utility
Answer: D
o m
.c
242. Customary pricing is also known as
te
a
A. Consumer pricing
q M
B. Conventional pricing
c
C. Cost plus pricing
D. Full cost pricing

M
Answer: B
243. Which of the following is/ are the reason for adopting penetration
price strategy
A. Economies of large scale production available to firm.
B. Potential market for the product is large.
C. Cost of production is low.
D. All the above
Answer: D
244. Which of the following is/ are the reason for adopting skimming price
strategy
A. When the buyers are not able to compare the value and utility.
B. To attract the high income customers.

C. When the product has distinctive qualities, luxuries
D. All the above
Answer: D
245. The market with a single producer’’
A. perfect competition
B. monopolistic competition
C. oligopoly
o m
D. monopoly
.c
te
Answer: D
a
246. In the oligopoly market there are q M
c
A. large no. of firms M
B. a few firms
C. a single firm
D. an infinite no. of firms
Answer: B
247. The short run production function is called;
A. Returns to scale
B. law of variable proportion
C. Production possibility frontier
D. None of these
Answer: B
248. Under oligopoly a single seller cannot influence significantly
A. market price

B. quantity supplied
C. advertisement cost
D. all the above
Answer: D
249. Average revenue is the revenue per
A. unit commodity sold
B. total commodity sold

o m
C. marginal commodity sold
.c
te
D. none of these
a
Answer: A
q M
c
M
250. The distinction between variable cost and fixed cost is relevant only
in
A. long period
B. short period
C. medium term
D. mixed period
Answer: B

o m
.c
te
a
q M
c
M

201. Under ….. Method, a panel is selected to give suggestions to solve

the problems in hand
A. Opinion survey
B. Expert opinion
C. Delphi method
o m
D. Consumer interview
.c
te
Answer: C
a
q M
202. Consumer Interview method of demand forecasting may undertaken
by; c
A. Complete enumeration
M
B. Sample survey
C. End?use method
D. All the above
Answer: D
203. In …….. approach, the demand for new product is estimated on the
basis demand of existing product
A. Growth curve approach
B. Evolutionary approach.
C. Opinion polling approach
D. Vicarious approach.
Answer: B

204. In …….approach, Consumers reactions on the new products arefound
out indirectly with the help of specialized dealers
B. Evolutionary approach.
C. Opinion polling approach
D. Vicarious approach.
Answer: D
o m
.c
205. In ………approach, on the basis of the growth of an established
te
product, the demand for the new product is estimated
a
q M
B. Evolutionary approach. c
C. Opinion polling approach M
D. vicarious approach
Answer: A
206. Method of demand forecasting is also called “economic model

building”
A. Opinion survey
B. Complete enumeration
C. Correlation and regression
D. Delphi method
Answer: C
207. Criteria for good demand forecasting includes;
A. Plausibility
B. Simplicity
C. Economy

D. All the above.
Answer: D
208. ………..is the base of marketing planning
A. Demand Estimation
B. Demand analysis
C. Demand function
D. Demand forecasting
o m
Answer: D
.c
t e
209. Growth curve approach is used a
for forecasting demand of
………….products
q M
c
A. New
B. Old
M
C. Existing
D. Both old and existing.
Answer: A
210. Which of the following is not a method of demand forecasting of new

products
A. Trend projection
B. Substitute approach
C. Evolutionary approach
D. Sales experience approach
Answer: A
211. ………..= R2?R1/Q2?Q1
A. Average revenue

B. Total revenue
C. Marginal revenue
D. Incremental revenue
Answer: C
212. ……….. Measures the differences between the new total revenue and
existing total revenue
A. Average revenue
o m
B. Total revenue
.c
C. Marginal revenue
te
a
q M
Answer: D
c
M
213. ………. means the total receipts from sales divided by the number of
unit sold.
A. Average revenue
B. Total revenue
C. Marginal revenue
Answer: A
214. So long as Average Revenue is falling, Marginal Revenue will be

…………. Average Revenue
A. Less than
B. More than
C. Equal to
D. None of these
Answer: A

215. Where Marginal revenue is negative, TR will be …………..
A. Rising
B. Falling
C. Zero
D. One
Answer: B
o m
216. Total Revenue will be maximum at the point where Marginal Revenue
is .c
te
A. One a
B. Zero
q M
c
C. <1
D. >1
M
Answer: B
217. ………….. is the change in total revenue irrespective of changes in

price or due to the effect of managerial decision on revenue
A. Average revenue
B. Total revenue
C. Marginal revenue
Answer: D
218. In…………..pricing fixed cost are excluded.
A. skimming pricing
B. going rate pricing
C. administered pricing

D. marginal cost pricing
Answer: D
219. Fixing high price during the introduction is called
A. skimming
B. penetrating
C. full cost pricing
D. target pricing
o m
Answer: A
.c
t e
a the industry’s price is called
220. The firm charges price in tune with
q M
A. competitive pricing
c
B. going rate pricing M
C. tune pricing
D. target pricing
Answer: B
221. Method of charging low price initially called……………
A. skimming
B. penetrating
D. target pricing
Answer: B
222. Pricing is done on the basis of managerial decisions, not on the basis
of cost, demand etc…
A. Managerial pricing
B. Administered pricing

C. Full cost pricing
D. Competitive pricing
Answer: B
223. Which of the following method of pricing is popular in wholesale and

retail trades
A. skimming
B. penetrating
o m
.c
D. target pricing
te
a
Answer: C
q M
c is not an internal factor influencing pricing
224. Which one of the following
policy M
A. cost
B. objectives
C. marketing mix
D. demand
Answer: D
225. Which one of the following is an internal factor influencing pricing
A. demand
B. competition
C. distribution channel
D. product life cycle
Answer: D

o m
.c
te
a
q M
c
M

176. An increase in income may lead to an increase in the quantity

demanded, it is
A. Positive income elasticity
B. Zero income elasticity
C. Negative income elasticity

o m
D. Unitary income elasticity
.c
te
Answer: A
a
177. A positive income elasticity may be q M
c
A. Unit income elasticity M
B. Income elasticity greater than unity
C. Income elasticity less than unity
D. Any of the above
Answer: D
178. The proportionate change in the quantity demanded of a commodity

in response to change in the price of another related commodity is called
A. Price elasticity
B. Related elasticity
C. Cross elasticity
D. Income elasticity
Answer: C
179. Tea and coffee are
A. Complimentary goods

B. Substitute goods
C. Supplementary goods
D. Reserve goods
Answer: B
180. Car and petrol are
A. Complimentary goods
B. Substitute goods
o m
C. Supplementary goods
.c
te
D. Reserve goods
a
Answer: A
q M
c
M
181. If the commodities are substitute in nature, cross elasticity will be
A. Negative
B. Positive
C. Zero
D. Any of the above
Answer: B
182. If the commodities are complimentary, cross elasticity will be
A. Negative
B. Positive
C. Zero
D. Any of the above
Answer: A
183. The responsiveness of demand due to a change in promotional

expenses is called

A. Expenditure elasticity
B. Advertisement elasticity
C. Promotional elasticity
D. Above b or c
Answer: D
184. Which one is the method for measurement of elasticity
A. Proportional or Percentage Method

o m
B. Outlay Method
.c
te
C. Geometric method
a
D. All the above
q M
Answer: D
c
M
185. Outlay method of measurement of elasticity is also called as
A. Percentage method
B. Expenditure method
C. Point method
D. Geometric method
Answer: B
186. …….method measures elasticity between two points
A. Proportional or Percentage Method
B. Outlay Method
C. Geometric method
D. Arc Method
Answer: D
187. Demand for necessary goods (salt, rice, etc,) is……….and demand for

comfort and luxury good is
A. Elastic, inelastic
B. Inelastic, elastic
C. Elastic, elastic
D. Inelastic, inelastic
Answer: B
o m
188. ……………..is the process of finding current values of demand for
various values of prices and other determining variables.
.c
te
B. Demand analysis a
C. Demand function q M
c
Answer: A
M
189. Tools and techniques for demand estimation includes;
A. Consumer surveys.
B. consumer clinics and focus groups
C. Market Experiment
D. All o the above
Answer: D
190. ………… is an “objective assessment of the future course of demand”
B. Demand analysis
C. Demand function
Answer: D

191. ………….demand forecasting is related to the business conditions
prevailing in the economy as a whole
A. Macro level
B. Industry level
C. Firm level
D. None of these
Answer: A
o m
.c
192. ……………… demand forecasting is prepared by different trade
te
association in order to estimate the demand for particular industries
products a
q M
A. Macro level
c
B. Industry level
M
C. Firm level
D. None of these
Answer: B
193. ……………forecasting is more important from managerial view point

as it helps the management in decision making with regard to the firms
demand and production.
A. Macro level
B. Industry level
C. Firm level
D. None of these
Answer: C
194. Purposes of Short term Demand forecasting includes;
A. Making a suitable production policy.

B. To reduce the cost of purchasing raw materials and to control inventory.
C. Deciding suitable price policy
D. All the above
Answer: D
195. Purposes of Short term Demand forecasting doesn’t includes;
A. Deciding suitable price policy
o
B. Setting correct sales target on the basis of future demandm
C. Forecasting short term financial requirements
.c
te
D. None of these
a
Answer: D
q M
c
M
196. Purposes of Short term Demand forecasting doesn’t includes;
D. Planning of a new unit or expansion of existing unit
Answer: D
197. Purposes of long term Demand forecasting doesn’t includes;
A. Planning of a new unit or expansion of existing unit.
B. Planning long term financial requirements.
C. Planning of manpower requirements.
D. Deciding suitable price policy
Answer: D
198. Purposes of long term Demand forecasting includes

D. Planning of a new unit or expansion of existing unit
Answer: D
199. Survey method of demand forecasting includes
A. Opinion survey
o m
B. Expert opinion
.c
te
C. Delphi method
a
D. All the above
q M
Answer: D
c
M
200. …………Method is also known as Sales? Force –Composite method
or collective opinion method
A. Opinion survey
B. Expert opinion
C. Delphi method
D. Consumer interview method
Answer: A

o m
.c
te
a
q M
c
M

151. In the case of …………… Consumer may moves to higher or lower

demand curve
A. Extension of demand
B. Contraction of demand
C. Shift in demand
o m
D. Slopes in demand
.c
te
Answer: C
a
q M
152. Higher the price of certain luxurious articles, higher will be the
demand, this concept is called c
A. Giffen effects
M
B. Veblen effects
C. Demonstration effects
D. Both b & c above
Answer: B
153. Demand for milk, sugar, tea for making tea, is an example of
A. Composite demand
B. Derivative demand
C. Joint demand
D. Direct demand
Answer: C
154. Demand for electricity is an example of
A. Composite demand

C. Joint demand
D. Direct demand
Answer: A
155. Demand for tyres depends on demand of vehicles, the demand for
tyres called as
A. Composite demand
o m
.c
C. Joint demand
te
a
D. Direct demand
q M
Answer: B
c
M
156. Determinants of demand includes
A. Price of a commodity
B. Nature of commodity
C. Income and wealth of consumer
D. All the above
Answer: D
157. Exceptional Demand Curve (Perverse demand curve)
A. Moving upward from left to right
B. Moving upward from right to left
C. Moving horizontally
D. Moving vertically
Answer: A

158. Which of the following is not an exception to the downward sloping of
demand curve
A. Giffen paradox
B. Veblen effects
C. Necessaries
D. Income effect
Answer: D
o m
.c
159. The concept of Elasticity of Demand was introduced by
te
A. Alfred Marshall a
B. Lionel Robbins
q M
c
C. Adam smith
D. J M Keynes
M
Answer: A
160. Price Elasticity of demand =
A. Proportionate change in quantity demanded Proportionate change in price
B. Change in Quantity demanded / Quantity demanded Change in Price/price
C. ( Q2?Q1)/Q1 (P2?P1) /P1
D. All the above
Answer: D
161. When a small change in price leads to infinite change in quantity

demanded, it is called
A. Perfectly elastic demand
B. Perfectly inelastic demand
C. Relative elastic demand

D. Relative inelastic demand
Answer: A
162. Quantity remains the same whatever the change in price, this is the
case of
o m
.c
Answer: B
te
a
q M
163. In the case of ………… a small change in price leads to very big
change in quantity demanded c
M
D. Unit elastic demand
Answer: C
164. In case of …….. quantity demanded changes less than proportionate

to changes in price
Answer: D
165. When the change in demand is exactly equal to the change in price, it
is called

D. Unitary elastic demand
Answer: D
166. Ep = 0 in the case of ???????????elasticity

o m
.c
te
a
D. Unitary elastic demand
q M
Answer: B
c
M
167. Perfect elasticity is known as
A. Finite elastic
B. Infinite elastic
C. Unitary elastic
D. Zero elastic
Answer: B
168. in the case of perfect inelasticity, the demand curve is
A. Vertical
B. Horizontal
C. Flat
D. Steep
Answer: A

169. EP =………….in the case of relatively elastic demand
A. 1
B. >1
C. <1
D. 0
Answer: B
o m
170. EP = ………in case of relatively inelastic demand
.c
A. 0
te
a
B. Infinite
q M
C. 1
c
D. <1
M
Answer: D
171. In the case of unitary elastic demand, the shape of demand curve is
A. Vertical line
B. Horizontal line
C. Rectangular hyperbola
D. Steep
Answer: C
172. Unitary elasticity of demand mean
A. EP =>1
B. EP =<1
C. EP = o
D. EP = 1
Answer: D

173. ……… shows the change in quantity demanded as a result of a
change in consumers’ income
A. Price elasticity
B. Cross elasticity
C. Income elasticity
D. None of these
Answer: C
o m
.c
174. For the commodities like salt, sugar etc.,the income elasticity will be
te
A. Zero a
B. Negative
q M
c
C. Positive
D. Unitary
M
Answer: A
175. when income increases, quantity demanded falls, it is
A. Positive income elasticity
B. Zero income elasticity
C. Negative income elasticity
D. Unitary income elasticity
Answer: C

o m
.c
te
a
q M
c
M

126. Which is the characteristics of managerial economics
A. Deals with both micro and macro aspects
B. Both positive and normative science
C. Deals with theoretical aspects
D. Deals with practical aspects.

o m
.c
Answer: D
te
a
q M
127. ………….is economic theory used in business whereas ……….is
economics theory used in business and non business organization
c
A. Micro economics, macro economicsM
B. Business economics, managerial economics
C. Positive economics and normative economics
D. None of these
Answer: B
128. Which of the following is not included in functions of managerial

economists
A. Sales forecasting
B. Industrial market research
C. Advice on foreign exchange
D. None of the above
Answer: D
129. Which of the following is included in specific functions of managerial

economists

A. Economic analysis of competing companies
B. Advice on pricing problems of industry
C. Environmental forecasting
D. All of the above
Answer: D
130. Which of the following is not a function of managerial economists
A. Advice on trade and public relations

o m
B. Economic analysis of agriculture
.c
te
C. Investment analysis
a
D. Supervision and control
q M
Answer: D
c
M
131. Which of the following is not a function of managerial economist
A. Analysis of under developed economies
B. Capital project appraisal
C. Advice on primary commodities
D. None of these
Answer: D
132. Basic economic tools of managerial economics include
A. Opportunity cost principle
B. Incremental principle
C. Discounting principle
D. All of the above
Answer: D
133. ………..principle is closely related to the marginal costs and marginal

revenue of economic theory
A. Principle of time perspective
B. Equi?marginal principle
C. Incremental principle
D. None of these
Answer: C
well as costs is based on o m

134. Analysis of long run and short run affects of decisions on revenue as
.c
A. Principle of time perspective
te
B. Equi?marginal principle a
C. incremental principle q M
c
D. None of these
Answer: A
M
135. “…………in economics means demand backed up by enough money
to pay for the goods demanded”
A. Utility
B. Consumption
C. Supply
D. Demand
Answer: D
136. The demand has three essentials? Desire, Purchasing power and
………..
A. Quantity
B. Cash
C. Supply

D. Willingness to purchase
Answer: D
137. ………… means an attempt to determine the factors affecting the

demand of a commodity or service and to measure such factors and their
influences
A. Demand planning
B. Demand forecasting
C. Demand analysis
o m
.c
D. Demand estimation
te
Answer: C a
q M
138. ………… is known as thec‘first law in market”
A. Law of supply
M
B. Law of consumption
C. Law of demand
D. Law of production
Answer: C
139. Demand =Desires+ …………… +willingness to pay
A. Supply
B. utility
C. Want
D. Purchasing power
Answer: D
140. Law of demand shows the functional relationship between

………….and quantity demanded

A. Supply
B. Cost
C. Price
D. Requirements
Answer: C
141. The relationship between price and quantity demanded is
A. Direct
o m
B. Inverse
.c
te
C. Linear
a
D. Non?linear
q M
Answer: B
c
M
142. …………….means relationship between demand and its various
determinants expressed mathematically
A. Demand extension
B. Demand contraction
C. Demand analysis
D. Demand function
Answer: D
143. D = f (P, Y, T, Ps, U),where the letter U stands for
A. Utility
B. Units of consumption
C. Usage
D. Consumer expectation & others
Answer: D

144. In the above function, the letters Ps stands for
A. Preference of consumers
B. Price of commodity
C. Price of substitutes
D. Product supply
Answer: C
145. In the above function, the letter Y stands for o m

.c
A. Yield of production
te
a
B. Income of consumers
q M
C. Utility
c
D. Supply
M
Answer: B
146. In the above function, the letter T stands for
A. Target price
B. Total supply
C. Total consumption
D. Taste and preference of consumers
Answer: D
147. Basic assumptions of law of demand does not include
A. There is no change in consumers’ taste and preference
B. Income should remain constant.
C. Prices of other goods should change.
D. There should be no substitute for the commodity
Answer: C

148. The change in demand due to change in price only, where other
factors remaining constant, it is called……….
A. Shift in demand
B. Extension of demand
C. Contraction of demand
D. Both extension and contraction
Answer: D
o m
.c
149. When the quantity demanded of a commodity rises due to a fall in
price, it is called
te
a
A. Extension
q M
B. Upward shift c
C. Downward shift M
D. Contraction
Answer: A
150. When the demand changes due to changes in other factors, like taste
and preferences, income, price of related goods etc... , it is called
A. Extension of demand
B. Contraction of demand
C. Shift in demand
D. None of these
Answer: C

o m
.c
te
a
q M
c
M

101. When a firm doubles its inputs and finds that its output has more than
doubled, this is known as:
A. economies of scale.
B. constant returns to scale.
C. diseconomies of scale.
o m
D. a violation of the law of diminishing returns.
.c
te
Answer: A
a
q M
102. The larger the diameter of a natural gas pipeline, the lower is the
c
average total cost of transmitting 1,000 cubic feet of gas 1,000 miles. This
is an example of: M
B. normative economies.
C. diminishing marginal returns.
D. an increasing marginal product of labour.
Answer: A
103. If all resources used in the production of a product are increased by

20 percent and output increases by 20 percent, then there must be:
B. diseconomies of scale.
C. constant returns to scale.
D. increasing average total costs.
Answer: C

104. Surplus is a condition of:
A. excess supply
B. a deficiency in supply
C. market equilibrium
D. excess demand
Answer: A
o m
105. The effect on sales of an increase in price is a decrease in:
.c
A. the quantity demanded
te
a
B. demand
q M
C. supply
c
D. the quantity supplied
M
Answer: B
106. The quantity of product X supplied can be expected to rise with a fall
in:
A. prices of competing products
B. price of x
C. energy savings technical charge
D. input prices
Answer: B
107. Firms under perfectly competitive markets generally are
A. price makers
B. price givers
C. price taker
D. none of these
Answer: A

108. The concept of product differentiation was introduced by
A. tr malthus
B. jm keynes
C. mrs. robinson
D. chamberlin
Answer: D
m
o competition
c
109. The architect of the theory of monopolistic
.
e
A. rosenstein roden
at
B. jr hicks
q M
C. karl marx
c
D. chamberlin M
Answer: D
110. The concept of monopsony was invented by:
A. marshall
B. ap. learner
C. chamberlin
D. mrs. j. robinson
Answer: D
111. A cost that has already been committed and cannot be recovered
known as:
A. sunk cost
B. total cost
C. full cost
D. variable cost
Answer: A

112. ------------ is situation of severely falling prices and lowest level of
economic activities
A. boom
B. recovery
C. recession
D. depression
Answer: D
o m
.c
e
113. ------------ is situation with increased investment and increased price
t
a
A. recession
q M
B. progress
c
C. boom
D. recovery
M
Answer: C
114. A graph indicating different combination of inputs with different level

of output is called
A. iso-cost map
B. bep map
C. input-output map
D. iso-quant map
Answer: D
115. Iso-cost line indicate the price of
A. output
B. inputs
C. finished goods

D. raw material
Answer: B
116. Modern definition is also called as
A. Growth definition
B. Welfare definition
C. scarcity definition
D. Neoclassical definition
o m
Answer: A
.c
t e
a and macro by
117. Economics was classified into micro
q M
A. Ragnar Frisch
c
B. Adam Smith M
C. J M Keynes
D. A C Pigou
Answer: A
118. Who is regarded as a father of Business Economics
A. Joel Dean
B. Adam Smith
C. J M Keynes
D. Ragnar Frisch
Answer: A
119. Decision making and ????????are the two important functions of

executive of business firms
A. Forward planning
B. Directing

C. Supervising
D. Administration
Answer: A
120. “ A rupee tomorrow is worth less than a rupee today” relates to
B. Discounting principle
C. Equi?marginal principle
o m
D. None of these
.c
te
Answer: B
a
121. ………….is micro economic theory q M
c
A. Demand theory M
B. Price theory
C. Income theory
D. None of these
Answer: B
122. Macro economic theory is also called as
A. Demand theory
B. Price theory
C. Income theory
D. None of these
Answer: C
123. Allocation of available resources among alternatives is based on the

principle

B. Discounting principle
C. Equi?marginal principle
D. None of these
Answer: C
124. The techniques of optimization include
A. Marginal analysis
B. Calculus
o m
C. Linear programming
.c
te
D. All of the above
a
Answer: D
q M
c
M
125. Which one is not a characteristics of managerial economics
A. Micro economics
B. Normative science
C. Positive science
D. Pragmatic
Answer: C

o m
.c
te
a
q M
c
M

76. The utility may be defined as:
A. the desire for a commodity
B. the usefulness of a commodity
C. the necessity of a commodity
D. the power of a commodity to satisfy wants

o m
.c
Answer: D
te
a
77. The utility of a commodity is:
q M
A. its expected social value c
B. the extent of its practical use
M
C. its relative scarcity
D. the degree of its fashion
Answer: C
78. Marginal utility curve of a given consumer is also his:
A. indifference curve
B. total utility curve
C. demand curve
D. supply curve
Answer: C
79. The relationship between demand for a commodity and price, ceteris
paribus, is:
A. negative

B. positive
C. non-negative
D. non-positive
Answer: A
80. A demand curve which takes the form of horizontal line parallel to
quantity axis illustrates elasticity which is:
A. zero
o m
B. infinite
.c
C. greater than one
te
a
D. less than one
q M
Answer: D
c
M
81. Consider a demand curve which takes the form of a straight line
cutting both axes. Elasticity at the mid-point of the line would be:
A. zero
B. one infinite
C. infinite
D. cannot be calculated
Answer: B
82. The elasticity of demand for a product will be higher:
A. the more available are substitutes for that product
B. the more its buyers demand loyalty
C. the more the product is considered a necessity by its buyers
D. all of the above
Answer: A

83. In case of Giffen goods, demand curve will slope:
A. vertical
B. horizontal
C. upward
D. downward
Answer: C
o m
84. Cross elasticity of demand between tea and sugar is:
.c
A. positive
te
a
B. zero
q M
C. infinity
c
D. negative
M
Answer: D
85. If the percentage increase in quantity of a commodity demanded is its

price, the coefficient of price elasticity of demand is:
A. greater than 1
B. equal to 1
C. less than 1
D. zero
Answer: C
86. If the quantity of a commodity demanded remains unchanged as its

price changes, the coefficient of price elasticity of demand is
A. greater than 1
B. equal to 1
C. less than 1

D. zero
Answer: D
87. Unitary elasticity of demand is:
A. zero
B. equal to one
C. greater than 1
D. less than 1
o m
Answer: B
.c
te
88. The real business cycle theory isa
most closely related to
q M
A. keynesian theory
c
B. monetarist theory M
C. the classical theory
D. the new keynesian theory
Answer: C
89. In the real business cycle model, business cycles are
A. efficient and do not represent lost output
B. driven by technology shocks
C. occur when markets clear
D. all of the above
Answer: D
90. Real business cycle proponents argue that
A. recessions are caused by movements of output away from the natural rate of output
B. prices and wages are sticky

C. macroeconomics should be based on the same assumptions as microeconomics
D. monetary policy is important in determining recessions
Answer: C
91. Implicit costs are:
A. equal to total fixed costs.
B. comprised entirely of variable costs.
C. "payments" for self-employed resources.

o m
.
D. always greater in the short run than in the long run.c
te
Answer: C
a
q M
92. The law of diminishing returns only applies in cases where:
c
M
A. there is increasing scarcity of factors of production.
B. the price of extra units of a factor is increasing.
C. there is at least one fixed factor of production.
D. capital is a variable input.
Answer: C
93. When the total product curve is falling, the:
A. marginal product of labour is zero.
B. marginal product of labour is negative.
C. average product of labour is increasing.
D. average product of labour must be negative.
Answer: B
94. When marginal product reaches its maximum, what can be said of total
product?
A. total product must be at its maximum

B. total product starts to decline even if marginal product is positive
C. total product is increasing if marginal product is still positive
D. total product levels off
Answer: C
95. Variable costs are:
A. sunk costs.
B. multiplied by fixed costs.

o m
C. costs that change with the level of production.
.c
te
a
D. defined as the change in total cost resulting from the production of an additional
Answer: C
q M
c
M
96. The reason the marginal cost curve eventually increases as output
increases for the typical firm is because:
A. of diseconomies of scale.
B. of minimum efficient scale.
C. of the law of diminishing returns.
D. normal profit exceeds economic profit.
Answer: C
97. If the short-run average variable costs of production for a firm are
rising, then this indicates that:
A. average total costs are at a maximum.
B. average fixed costs are constant.
C. marginal costs are above average variable costs.
D. average variable costs are below average fixed costs.
Answer: C
98. If a more efficient technology was discovered by a firm, there would

be:
A. an upward shift in the avc curve.
B. an upward shift in the afc curve.
C. a downward shift in the afc curve.
D. a downward shift in the mc curve.
Answer: D
99. The firm's short-run marginal-cost curve is increasing when:

o m
A. marginal product is increasing.
.c
te
B. marginal product is decreasing.
a
C. total fixed cost is increasing.
q M
D. average fixed cost is decreasing.
c
Answer: B M
100. A firm encountering economies of scale over some range of output
will have a:
A. rising long-run average cost curve.
B. falling long-run average cost curve.
C. constant long-run average cost curve.
D. rising, then falling, then rising long-run average cost curve.
Answer: B

o m
.c
te
a
q M
c
M

51. Generally demand curve have …………
A. negative slope
B. positive slope
C. horizontal line
D. vertical line
o m
.c
Answer: A
te
a
remaining constant, it is called………. q M
52. The change in demand due to change in price only, where other factors
c
A. shift in demand M
B. extension of demand
C. contraction of demand
D. both extension and contraction
Answer: D
53. When the quantity demanded of a commodity rises due to a fall in

price, it is called
A. extension
B. upward shift
C. downward shift
D. contraction
Answer: A
54. When the quantity demanded falls due to a rise in price, it is called
A. extension

B. upward shift
C. downward shift
D. contraction
Answer: D
55. The Giffen goods are ………. Goods
A. inferior goods
B. superior goods
o m
C. related goods
.c
te
D. same goods
a
Answer: A
q M
c
M
56. Higher the price of certain luxurious articles, higher will be the
demand, this concept is called
A. giffen effects
B. veblen effects
C. demonstration effects
D. both b & c above
Answer: B
57. Demand for milk, sugar, tea for making tea, is an example of
A. composite demand
B. derivative demand
C. joint demand
D. direct demand
Answer: C
58. Perfect elasticity is known as

A. finite elastic
B. infinite elastic
C. unitary elastic
D. zero elastic
Answer: B
59. In the case of perfect elasticity, the demand curve is
A. vertical
o m
B. horizontal
.c
te
C. flat
a
D. steep
q M
Answer: B
c
M
60. In a perfectly competitive market, individual firm
A. cannot influence the price of its product
B. can influence the price of its product
C. can fix the price of its product
D. can influence the market force
Answer: A
61. Perfect competition is characterized by
A. large number of buyers and sellers
B. homogeneous product
C. free entry and exit of firms
D. all the above
Answer: D

62. The market with a single producer
C. oligopoly
D. monopoly
Answer: D
63. Selling cost is the feature of the market form o m

.c
A. monopoly
te
a
q M
C. oligopoly
c
D. none of these
M
Answer: B
64. The product under monopolistic competition are
A. differentiated with close substitute
B. perfect substitute
C. differentiated without close substitute
D. homogeneous
Answer: A
65. In business cycle concept, the period of “long wave” is of;
A. 25 years
B. 50 years
C. 100 years
D. 200 years
Answer: B

66. In economics …….. means ‘a state of rest ‘or ‘stability’
A. depression
B. equilibrium
C. maturity
D. growth
Answer: B
o m
67. Selling at a lower price in export market and at a higher price at home
market is called .c
te
A. export subsidy a
B. dumping
q M
c
C. price cut
D. all the above

M
Answer: B
68. A fall in the price of a commodity leads to
A. a shift in demand
B. a fall in demand
C. a rise in the consumer’s real income
D. a fall in the consumer’s real income
Answer: C
69. An exceptional demand curve is one that slopes
A. upward to the left
B. downward to the right
C. horizontally
D. upward to the right
Answer: D

70. Which one is not an exception to the Law of Demand?
A. normal good
B. articles of distinction
C. ignorance
D. inferior good
Answer: A
71. Demand for a commodity is elastic when ito

m
.c has:
e
A. only one use
at
M
B. uses which cannot be postponed
q
C. many uses
c
M
D. uses very essential for the consumer
Answer: C
72. When the demand curve is a rectangular hyperbola, it represents:
A. perfectly elastic demand
B. unitary elastic demand
C. perfectly inelastic demand
D. relatively elastic demand
Answer: B
73. The horizontal demand curve for a commodity shows that its demand
is:
A. perfectly elastic
B. highly elastic
C. perfectly inelastic
D. moderately elastic
Answer: A

74. When an individual’s income falls (while everything else remains the
same), his demand for an inferior good:
A. increases
B. decrease
C. remains unchanged
D. we cannot say without additional information
Answer: B
o m
.c
e
75. A fall in the price of a commodity whose demand curve is a rectangular
t
a
hyperbola causes total expenditure on the commodity to:
A. increases
q M
B. decrease c
C. remains unchanged
M
D. any of the above
Answer: C

o m
.c
te
a
q M
c
M

26. Product differentiation is an important feature of
C. monopoly
D. none of these
o m
.c
Answer: B
te
a
q M
27. ……… refers to the quantity of a good or service that producers are
willing and able to sell during a certain period under a given set of
conditions c
A. supply
M
B. demand
C. price
D. production
Answer: A
28. ………. for a product is a statement of the relation between the quantity
supplied and all factors affecting that quantity
A. market demand function
B. production function
C. market supply function
D. all of the above
Answer: C
29. Which is/are determinants of Supply…….

A. price of the commodity
B. state of technology
C. cost of production
D. all the above
Answer: C
30. …………a statement in the form of a table that shows the different
quantities of a commodity that a firm or a producer offers for sale in the
market at different prices.
o m
.c
A. supply schedule
te
B. production schedule a
C. demand schedule
q M
D. price schedule c
Answer: A
M
31. ……….. a schedule that depicts the supply by an individual firm or
producer of a commodity in relation to its price
A. market price schedule
B. market supply schedule
C. individual supply schedule
D. none of them
Answer: C
32. …………… is the degree of responsiveness of supply to changes in the

price of a good
A. elasticity of demand
B. elasticity of supply
C. both (a) & (b)
D. none of them
Answer: B

33. Business Economics is also known as………….
A. managerial economics
B. economics for executives
C. economic analysis for business decisions
D. all the above
Answer: D
m
o added by the last unit is
c
34. An input should be so allocated that the value
.
the same in all cases.
e
at
A. opportunity cost principle
q M
B. equi-marginal principle
c
M
C. incremental principle
D. discounting principle
Answer: B
35. The principle reasons behind economic problems
A. unlimited wants
B. limited or scarce of means
C. alternatives uses of means
D. all of the above
Answer: D
36. Managerial utility function is expressed as:
A. u = s (s, m, i)
B. u = s (s, m)
C. u = f (s, m, i)
D. u = f (s, m, i)
Answer: C

37. The value of an entrepreneur’s resources that she uses in production
are known as:
A. explicit costs.
B. sunk costs.
C. operating expenses.
D. implicit costs.
Answer: D
o m
.c
38. Inflation is:
te
a
M
A. a decrease in the overall level of economic activity.
q
c
B. an increase in the overall level of economic activity.
M
C. an increase in the overall price level.
D. a decrease in the overall price level.
Answer: C
39. A recession is:
A. a period of declining unemployment.
B. a period of declining prices
C. a period during which aggregate output declines
D. a period of very rapidly declining prices.
Answer: C
40. Opportunity cost means
A. the accounting cost minus the marginal benefit.
B. the highest-valued alternative forgone.
C. the monetary costs of an activity.
D. the accounting cost minus the marginal cost
Answer: B

41. ______ is economic theory used in business whereas ______ is
economics theory used in business and non-business organization
A. micro economics, macro economics
B. business economics, managerial economics
C. positive economics and normative economics
D. none of these
Answer: B
o m
.c
42. Managerial economics is also called
te
a
A. micro economics
q M
B. theory of the firm
c
C. economics of the firm
D. all of the above.

M
Answer: D
43. Want satisfying power of commodity is called
A. demand
B. utility
C. satisfaction
D. consumption
Answer: B
44. In economics, desire backed by purchasing power is known as
A. utility
B. demand
C. consumption
D. scarcity
Answer: B

45. The demand has three essentials ? Desire, Purchasing power and
………..
A. quantity
B. cash
C. supply
D. willingness to purchase
Answer: D
o m
.c
e
46. .………… means an attempt to determine the factors affecting the
t
a
demand of a commodity or service and to measure such factors and their
influences
q M
A. demand planning
c
B. demand forecasting M
C. demand analysis
D. demand estimation
Answer: C
47. .………… is known as the ‘first law in market”
A. law of supply
B. law of consumption
C. law of demand
D. law of production
Answer: C
48. Demand = Desires + …………… + Willingness to pay
A. supply
B. utility

C. want
D. purchasing power
Answer: D
49. Law of demand shows the functional relationship between _______ and
quantity demanded
A. supply
B. cost
o m
C. price
.c
D. requirements
te
a
Answer: C
q M
50. Basic assumptions of lawc
of demand include
M
A. prices of other goods should change.
B. there should be substitute for the commodity.
C. the commodity should not confer any distinction.
D. the demand for the commodity should not be continuous
Answer: C

o m
.c
te
a
q M
c
M

1. A utility function shows the relation between …..
A. the amount of goods consumed and a consumer utility.
B. income and a consumer utility.
C. prices and consumers utility.
o m
D. maximum utility and the price and income facing a consumer.
.c
Answer: A
te
a
2. _______ is known as father of economics
q M
A. marshal c
B. robins
M
C. adam smith
D. a c pigou
Answer: C
3. The famous book on economics “An Enquiry into the Nature and Cause
of Wealth of Nation” was written by
A. marshal
B. ricardo
C. robins
D. adam smith
Answer: D
4. Welfare (neo classical) definition of economics is given by
A. j b say

B. lionel robbins
C. adam smith
D. alfred marshall
Answer: D
5. If the income elasticity of demand is that one, the good is a
A. necessity
B. luxury
o m
C. substitute
.c
te
D. complement
a
Answer: B
q M
c
M
6. The income elasticity of demand is negative for a
A. positive good
B. normal good
C. elastic good
D. inferior good
Answer: D
7. What effect is working when the price of a good falls and consumers
tend to buy it insteadof other goods
A. income effect
B. substitution effect
C. price effect
D. none of these
Answer: B
8. “A rupee tomorrow is worth less than a rupee today” relates to

A. opportunity cost principle
B. discounting principle
C. equi?marginal principle
D. none of these
Answer: B
9. Basic economic tools of managerial economics does not include
A. principle of time perspective

o m
B. equi?marginal principle
.c
te
a
D. none of these
q M
Answer: D
c
M
10. …….. principle is closely related to the marginal costs and marginal
revenue of economic theory
D. none of these
Answer: C
11. Analysis of long run and short run affects of decisions on revenue as
well as costs is bas ed on
D. none of these
Answer: A

12. Two goods that are used jointly to provide satisfaction are called
A. inferior goods
B. normal goods
C. complementary goods
D. substitute goods
Answer: C
13. Demand curve slopes downwards because of o m

.c
A. the law of diminishing marginal utility
te
a
B. the income effect
q M
C. substitution effect
c
D. all of the above
M
Answer: D
14. If the income and substitution effect of a price increase works in the
same direction the good whose price has changed is a
A. giffen goods
B. inferior goods
C. normal goods
D. superior
Answer: C
15. Which of the following is not a survey method of demand forecasting
A. consumers interview method
B. expert opinion method
C. barometric method
D. collective opinion method
Answer: C

16. Which of the following is not a method of demand forecasting
A. trend projection method
B. substitute approach
C. sales experience approach
D. evolutionary approach
Answer: A
o m
17. Which one is not a property of isoquant
.c
te
A. downward sloping
a
B. convex
q M
C. negative slope
c
D. positive slope M
Answer: D
18. In which production function, the degree of homogeneity is always one
A. cobb doubglas production fuction
B. homogeneous production function
C. linear homogeneous production function
D. none of these
Answer: C
19. Which of the following is a short run law
A. law of diminishing returns
B. law of constant returns to scale
C. law increasing returns to scale
D. none of these
Answer: A

20. Which of the following is not a variable input
A. raw material
B. power
C. equipment
D. none of these
Answer: C
o m
c
21. Which cost is more useful for decision making
.
e
A. opportunity cost
at
B. sunk cost
q M
C. historical cost
c
D. none of these M
Answer: A
22. Which cost are recorded in books of accounts
A. opportunity cost
B. implicit cost
C. social cost
D. explicit cost
Answer: D
23. Fixed cost per unit increases when
A. volume of production decreases
B. volume of production increases
C. variable cost per unit decreases
D. none of these
Answer: A

24. Variable cost per unit
A. remains fixed
B. varies with the volume of production
C. varies with sales
D. none of these
Answer: B
o m
25. Firms in an oligopoly
.c
te
A. are independent of each other’s action
a
B. can each influence the market price
q M
c
C. charge a price equal to marginal revenue
D. all of these M
Answer: B

o m
.c
te
a
q M
c
M

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Question Option 1 Option 2 Option 3 Option 4 A

It is want satisfying power of a commodity. Demand Utility Supply Purchasing 2

301. Related to production function, MRTS stand for;

A. Marginal revenue and total sales

B. Minimum revenue from total sales

C. Marginal rate of total supply

D. Marginal rate of technical substitution

303. in economics ……..means ‘a state of rest ‘or ‘stability’

304. In perfect completion, a firm is a

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305. Which of the following is not a feature of monopolistic completion?

A. Large number of producers

B. Free entry and exit

C. More elastic demand

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276. The properties of indifference curves are:

A. Indifference curve slops downwards from left to right

B. Convex to the point of origin

C. Two indifference curve never cut each other

279. Whenever marginal cost is more than …………average total cost is

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B. Average total cost

282. The marginal revenue equation can be derived from the:

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285. ------------is situation with increased investment and increased price

286. Which of the following is not a macroeconomic concept?

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287. Where boom ends,……….. starts

D. All the above

289. In business cycle concept, the period (approximately) of “Kit chin

290. The “law of variable proportion” is first explained by

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291. Functional relationship between input and output known as

D. All the above

293. A graph indicating different combination of inputs with different level

294. Which is not a property of ISOQUANT?

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295. Which of the following is not a variable input?

A. Law of constant return to scale

B. Law of increasing return to scale

C. Law of diminishing return

297. …………is called produced means of production

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299. The term “Economies” refers to o m

300. Who classified economies of scale into internal and external?

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253. The no. of firms under oligopoly is

254. The law of diminishing returns applies more to

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255. The opportunity cost of a given activity is

A. the value of next best activity

B. the value of material used

257. The factors used in the production

A. Land and labor

B. capital & entrepreneurship

258. In a perfect market both buyers and sellers are

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D. all the above

259. Which is the determinant of the pricing policy of a firm?

C. Information at the micro level

261. Which is the reason of skimming price?

C. Safer price policy