Managerial Economics 1 MCQs [set-5]

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.
D. a violation of the law of diminishing returns.
Answer: A

102. The larger the diameter of a natural gas pipeline, the lower is the average total
cost of transmitting 1,000 cubic feet of gas 1,000 miles. This is an example of:
A. economies of scale.
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B. normative economies.
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C. diminishing marginal returns. te
a
Answer: A
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D. an increasing marginal product of labour.

c
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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:
A. economies of scale.
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

105. The effect on sales of an increase in price is a decrease in:

 A. the quantity demanded
B. demand
C. supply
D. the quantity supplied
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

109. The architect of the theory of monopolistic competition

A. rosenstein roden
B. jr hicks
C. karl marx
D. chamberlin
Answer: D

110. The concept of monopsony was invented by:

A. marshall
B. ap. learner

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 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

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

A. recession
B. progress
C. boom
D. recovery
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

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 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
Answer: A

117. Economics was classified into micro and macro by

A. Ragnar Frisch
B. Adam Smith
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

A. Opportunity cost principle
B. Discounting principle
C. Equi?marginal principle

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 D. None of these
Answer: B

121. ………….is micro economic theory

A. Demand theory
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

A. Opportunity cost 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
C. Linear programming
D. All of the above
Answer: D

125. Which one is not a characteristics of managerial economics

A. Micro economics
B. Normative science
C. Positive science
D. Pragmatic
Answer: C

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