Semester End Examination February 2014

Diploma in Business Management

Managerial Economics (ADM 103)

Q. No. 1
A
B
C
D

if the price of a petrol increased, than inflation will

Q. No. 2
A
B
C
D

rising pricing of commodities indicate

Q. No. 3
A
B
C
D

the supply of a product depend on

Q. No. 4
A
B
C
D

if the price of a product rise than supply will

Q. No. 5
A
B
C
D

which method is used to measure national income

ADM 103

Decrease
Increased
Constants
none of above

deflation
inflation
both a and b
none of above

Technology
Labor
raw material
all of the above

Increased
Decreased
does not change
none of above

net product method

income method
expenditure method
all of the above

Page 1

Q. No. 6
A
B
C
D

which one is an example of opportunity cost

Q. No. 7
A
B
C
D

the product which are used together are

Q. No. 8
A
B
C
D

if price of a product increase than demand of product will

Q. No. 9
A
B
C
D

law of demand does not depend on

explicit cost
implicit cost
fixed cost
marginal cost

substitute goods
complimentary goods
normal goods
none of above

Increased
Decreased
Zero
Constant

normal goods
FMCG goods
Durable goods
Giffien goods

Q. No. 10
A
B
C
D

when income increased , the demand of inferior goods

Q. No. 11
A
B
C
D

the demand of a product is

Q. No. 12
A
B
C
D

the quantitative tools used for profit maximization is

ADM 103

Increased
Decreased
Constant
none of above

Price
Income
Advertising
all of the above

differentiate
Integration
random sampling
none of above

Page 2

Q. No. 13
A
B
C
D

Giffen Paradox is a ---------------to the law of demand

Q. No. 14
A
B
C
D

all except one are determinants of demand

Q. No. 15
A
B
C
D

The kinked demand curve model

Q. No. 16
A
B
C
D

the scope of managerial economics include

Q. No. 17
A
B
C
D

the example of opportunity cost is

Q. No. 18
A
B
C
D

Baumols is associated to

Q. No. 19
A
B
C
D

profit is maximum when

ADM 103

Example
exception
Elaboration
Analysis

Income
Price
consumer expectation
color of the goods

seeks to explain the price rigidity often found in oligopolistic markets

implies that oligopolists recognize their interdependence
does not imply collusion on the part of the oligopolists.
All of the above

Demand
Supply
market structure
All of the above

fixed cost
variable cost
implicit cost
marginal cost

sales maximization
Growth
profit maximization
All of the above

MR =MC
MR > MC
MR < MC
none of above

Page 3

Q. No. 20
A
B
C
D

law of diminishing return is associated to

Q. No. 21
A
B
C
D

if MU =0 than TU is

Q. No. 22
A
B
C
D

price elasticity of demand of salt is

Q. No. 23
A
B
C
D

isoquant curve is associated to

Q. No. 24
A
B
C
D

in skimming pricing , the price generally

Q. No. 25
A
B
C
D

in penetration pricing, the price are generally

Q. No. 26
A
B
C
D

the supply of a product depends on

ADM 103

Demand
Supply
market structure
none of these

Minimum
Maximum
Constant
none of these

Less than 1
More than 1
Equal to 1
none of these

production
Cost
market structure
All of the above

Increase
Decrease
does not change
none of these

Increase
Decrease
does not change
none of these

Manpower
raw material
Technology
All of the above

Page 4

Q. No. 27
A
B
C
D

if MC = 0, than TC is

Q. No. 28
A
B
C
D

production function depends on

Q. No. 29
A
B
C
D

An increase in firms fixed costs will

Q. No. 30
A
B
C
D

the curve of Average fixed cost is of

Q. No. 31
A
B
C
D

kinked curve is associated to

Q. No. 32
A
B
C
D

Cornet curve in market structure is associated to

Q. No. 33
A
B
C
D

demand of a product depend on

ADM 103

Maximum
Minimum
Constant
All of the above

Labor
Capital
both a and b
none of these

change marginal costs but not total cost

change both marginal and total costs
change variable costs but not marginal costs
change total costs but not marginal costs

U shape
V shape
like Hyperbola
None

Monopoly
Oligopoly
Monopolistic
Perfect Competition

Monopoly
Monopolistic
Oligopoly
perfect

consumer test and preference

population
credit facility
all of the above

Page 5

Q. No. 34
A
B
C
D

the fixed cost in the function c = 23 + 10 q is

Q. No. 35
A
B
C
D

the production of a function depends on

Q. No. 36
A
B
C
D

Baumol contribution is to

Q. No. 37
A
B
C
D

indifference cost is associated to

Q. No. 38
A
B
C
D

the rent and salary are the example of

Q. No. 39
A
B
C
D

profit is maximum when

Q. No. 40
A
B
C
D

tea and coffee are the two

ADM 103

10
23
33
cannot be find out

Labor
Machine
raw material
all of the above

maximize profit
maximize sales
maximize growth
maximize manager utility function

Demand
Production
Cost
market structure

variable cost
marginal cost
fixed cost
average cost

MC =MR
MP = MR
MU =MC
MR =MU

substitutes goods
complimentary goods
normal goods
all of the above

Page 6

Q. No. 41
A
B
C
D

the MC cut AC at its

Q. No. 42
A
B
C
D

In case of Giffen goods, price effect is

Q. No. 43
A
B
C
D

In case of inferior goods, price effects is

Q. No. 44
A
B
C
D

Positive income effect is greater than negative substitution effect in case of

Q. No. 45
A
B
C
D

Reason behind Giffen goods could not be explained by

Q. No. 46
A
B
C
D

In Case of Giffen goods, demand curve will slope

Q. No. 47
A
B
C
D

In case of Veblen goods, demand curve will slope

ADM 103

maximum point
minimum point
neither a nor b
None

Negative
Positive
Zero
None

Zero
Positive
Negative
None

Normal Goods
Inferior Goods
Luxury goods
Giffen goods

Utility theory
indifference curve
Both
None

Upward
Downward
Horizontal
Vertical

Upward
Downward
Horizontal
Vertical

Page 7

Q. No. 48
A
B
C
D

All Giffen goods are inferior, but all inferior goods are not Giffen goods. The statement is

Q. No. 49
A
B
C
D

Of the following commodities, which has the lowest elasticity of demand

Q. No. 50
A
B
C
D

increase in price of steel will

Q. No. 51
A
B
C
D

an example of macroeconomics is

Q. No. 52
A
B
C
D

In the case of monopolistic competition

Q. No. 53
A
B
C
D

Demand for intermediate consumption arises in

Q. No. 54
A
B
C
D

Demand for final consumption arises in

ADM 103

FALSE
True
Sometimes true
None of these

Car
Salt
Tea
House

increase inflation
decrease inflation
no change
None

GDP
aggregate demand
aggregate supply
All of the above

MR curve cannot be defined

AR curve cannot be defined
The short run supply curve cannot be defined
None of the above

Consumer households
Government enterprises only
Corporate enterprises only
All producing sectors of the economy.

Household sector only

Government sector only
Both (a) & (b)
All sectors

Page 8

Q. No. 55
A
B
C
D

managerial economics is also known as

Q. No. 56
A
B
C
D

when income elasticity of demand for a product for a goods is negative, the goods is

Q. No. 57
A
B
C
D

which market structure may form a cartel

Q. No. 58
A
B
C
D

railway is an example of

Q. No. 59
A
B
C
D

which market structure is have few seller in the market

Q. No. 60
A
B
C
D

in penetration pricing generally price are

Q. No. 61
A
B
C
D

the price of a product depends on

ADM 103

business economics
economics of enterprises
economic analysis for business decisions
all of the above

luxury goods
normal goods
necessity goods
inferior goods

Monopoly
Mopolostic
Oligopoly
perfect

Monopoly
Monopolistic
Oligopoly
Perfect

Monopoly
Monopolistic
Oligopoly
perfect

increased
Decreased
Constant
None

cost of product
demand of product
competition in the market
all of the above

Page 9

Q. No. 62
A
B
C
D

Cannot model is associated to

Q. No. 63
A
B
C
D

in which market structure a firm is a price taker

Q. No. 64
A
B
C
D

in which market , there is only a one seller

Q. No. 65
A
B
C
D

profit will be maximum in the situation when

Q. No. 66
A
B
C
D

The depression phase of the business cycle is not defined by the following:

Q. No. 67
A
B
C
D

number of seller in perfect competition are

Q. No. 68
A
B
C
D

if MU is zero then TU will be

ADM 103

Monopoly
Monopolistic
Oligopoly
perfect

Monopoly
Monopolistic
Oligopoly
perfect

Monopoly
Monopolistic
Oligopoly
perfect

marginal revenue is equal to marginal cost

marginal revenue is greater than marginal cost
marginal revenue is less than marginal cost
none

Growth rate falls

Jobs decline
Investment in stock is profitable
Debtors find it difficult to pay-off their debts.

One
Many
Few
None

Minimum
Maximum
Zero
None

Page 10

Q. No. 69
A
B
C
D

according to law of demand if price increase then demand of product will be

Q. No. 70
A
B
C
D

increase in price of steel will

Q. No. 71
A
B
C
D

Profit = total revenue - (?) choose the suitable answer for blank

Q. No. 72
A
B
C
D

the fixed cost in the function Q = 50 + 12Q is

Q. No. 73
A
B
C
D

profit is maximum when

Q. No. 74
A
B
C
D

when AC = MC, then AC is

Q. No. 75
A
B
C
D

All except one are the determinants of demand

ADM 103

Increase
decrease
Zero
does not change

increase inflation
decrease inflation
no change
None

Total cost
Total Price
Total Sale
None of these

50
12
0
cannot be find

MR =MC
MR > MC
MR < MC
none of these

Maximum
Minimum
Constant
none of these

Income
Price
consumer expectation
color of goods

Page 11

Q. No. 76 profit of a firm under monopolistic completion is maximum under which of the following
A
B
C
D

conditions
MR=MC
MR>P
MR=MC
MR < MC

Q. No. 77
A
B
C
D

Short run demand refers to -------------demand

Q. No. 78
A
B
C
D

Giffen Paradox is a -------------to the law of demand

Q. No. 79
A
B
C
D

The demand of a product depend on the

Q. No. 80
A
B
C
D

The products which are used together are known as

ADM 103

New
Late
Old
Current

Example
Exception
Elaboration
Analysis

Price
Advertising
income of consumers
All of the above

substitute products
complementary products
normal products
none of these

Page 12

CASE STUDY
Robers Pvt. Ltd. was established in 1985. The company started manufacturing of light bulbs with a brand
name of 'Prakash'. During initial 10 years, the company made good profits. But, its profits gradually declined
due to competition from national brands. The promoters of the company had a committed team of engineers
who were constantly working on Research and Development. Finally, they came out in the year 2000, with an
innovative product, a unique ceiling fan 'Voltec'. The company is currently supplying its products in
geographically separated markets of Uttar Pradesh and Bihar. The company is currently charging the same
price in Uttar Pradesh and Bihar. The chief Economist of the company has informed the top management that
price elasticity of demand at currently-charged price is 3 in Bihar and 5 in Uttar Pradesh. The top management
is planning to charge two different prices in Uttar Pradesh and Bihar in order to make more profits.

Q. No. 81
A
B
C
D

In which year, Rober Pvt. Ltd. is established

Q. No. 82
A
B
C
D

What is the brand name of light bulbs manufacture by Rober Pvt. Ltd.

Q. No. 83
A
B
C
D

Why the profit of the company is declining

Q. No. 84
A
B
C
D

In monopoly market, the number of seller are

Q. No. 85
A
B
C
D

Pnuelasticity of demand is higher in which state

ADM 103

1990
1980
1985
2000

Rakesh
Prakash
Umesh
Divya

High Competition
High prices
Consumer Behavior
Govt. Policy

One
Two
Three
Four

Bihar
UP
MP
None of these

Page 13

Q. No. 86
A
B
C
D

The nature of market structure for fun industries is

Q. No. 87
A
B
C
D

If place of a product increase, then demand will

Q. No. 88
A
B
C
D

The demand will remain same if elasticity of demand is

Q. No. 89
A
B
C
D

Profit is maximum when

Q. No. 90
A
B
C
D

The Price elasticity of demand for elasticity is

ADM 103

Monopolistic
Perfect
Oligopoly
None of these

Increase
Decrease
Constant
None of these

One
Zero
more than one
Less than one

MR=MC
MR>MC
MR<MC
None of these

Less than 1
More than 1
Equal to 1
Equal to Zero

Page 14