Question Type – True/False

Question: In case of a proprietary firm the liability of the proprietor is limited.
Answer: False

Question: In experimental price approach the firms takes some cognizance of the demand for the product and proceeds to fix a price by a trial and error method.
Answer: True

Question: Consumer’s protection involves protection to the consumers from unfair trade practices.
Answer: True

Question: The law of supply is not hypothetical.
Answer: False

Question: When a change in income has no effect upon the quantity demanded of a product, the income elasticity of demand is zero.
Answer: True

Question: Public enterprises have shown a very high rate of return of the capital invested.
Answer: False

Question: In the traditional concept of equilibrium, a firm attains the equilibrium when the firm’s Total Revenue (T.R.) =Total Cost (T.C.).
Answer: False

Question: Supply management is related to the volume of supply & its distribution system.
Answer: True

Question: The sum of total fixed costs and total variable costs is the total cost.
Answer: True

Question: During the period of depression, a large part of a country’s resources lie involuntarily idle.
Answer: True

Question: Under the New Industrial Policy, in order to invite foreign investment in high priority industries, it was decided to provide approval for direct foreign investment upto 51% equity in such industries.
Answer: True

Question Type – Multiple Choice Multiple Answer

Question: Accounting profit includes
Answer: Wages , Rent , Interest

Question: Exceptions to the Law of Demand are
Answer: Griffin goods , Articles of snob appeal , Speculation

Question: Characteristics of Pure Public goods are
Answer: They are completely indivisible , Their marginal cost would be zero or close to zero , Their benefits cannot be priced

Question: Main aims of the New Industrial Policy (1991) are :-
Answer: To unshackle the Indian industrial economy from the cobwebs of unnecessary bureaucratic control , To introduce liberalization with a view to integrate the Indian economy with the world economy , To remove restrictions on direct foreign investment as also to free the domestic entrepreneur from the restriction of MRTP act

Question: Factors leading to differences in the economic & the traditional concepts of valuation are
Answer: Inventory Valuation , Depreciation , Unaccounted value changes in the assets & liabilities

Question: Under cost plus pricing
Answer: Actual costs, standard costs are included , Certain percentage of profit also included , The price is set to cover material, labour cost

Question: Demand is determined by
Answer: Price of the product , Relative prices of other goods , Tastes and habits

Question: Different types of Elasticity of Demand are
Answer: Cross elasticity of demand , Price elasticity of demand , Income elasticity of demand

Question: Assumptions of the Law of Demand are
Answer: No change in consumer’s income , No change in consumer’s preferences , No change in fashion

Question: A competitive industry has three basic characteristics
Answer: Large Number of Firms , Homogeneous Product , Free entry and exit

Question: Types of Share capital of Joint-Stock Company are
Answer: Registered or authorized capital , Issued capital , Paid-up capital

Question: Defects of market system
Answer: Inequalities of income and wealth , Emergence of monopolies , Failure to provide full employment

Question Type – Multiple Choice Single Answer

Question: In case of perfectly elastic supply, the supply curve is
Answer: Horizontal
Your Answer

Question: Every nation’s resources which are used to produce the quantities of goods and services that would be required to satisfy all its citizen’s wants are
Answer: insufficient

Question: Managerial economics is also understood to refer to
Answer: applied economics

Question: Economists have pointed out that the real world is full of
Answer: Imperfect competition

Question: Under perfect competition, generally demand and supply act and react upon each other and determine the price
Answer: equilibrium

Question: A firm gets an opportunity to produce multiple products because changes in business activity in a firms is
Answer: Cyclical

Question: Managerial economics generally refers to the integration of economic theory with business
Answer: Practice

Question: The method of inventory valuation in which, the cost of production is calculated on the assumption that the material which was last to enter the inventory of the company was used first is
Answer: LIFO

Question: In case of a Joint-Stock Company, the liability of share holders is
Answer: Limited

Question: Expansion of supply is shown by the movement in the supply curve which is
Answer: Upward

Question: Saving is a
Answer: Private virtue

Question: According to the Government, the building up of inflationary pressure during the Nineties was attributed to
Answer: Higher Fiscal deficit

Question: The income which a businessman might expect from the second best alternative use of his resources is called as
Answer: Opportunity cost

Question Type – Select The Blank

Question: Super-normal profit is also called ________.
Answer: Excess profit

Question: When Government repays old loans, the purchasing power at the disposal of the people ________.
Answer: Increases

Question: Propensity to consume is defined as the relationship between consumption and ________.
Answer: Income

Question: ________ effects are those externalities which flow from the production or use of the good to other parties or economic units.
Answer: Third party

Question: Advertising forms an integral part of decision-making and________.
Answer: Forward – planning

Question: True inflation starts only after reaching ________.
Answer: Level of full employment

Question: The financing of ________ goods is done through Public expenditure.
Answer: Public