Subject : Managerial Economics Chp: 1

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Check Answer Report You have got 0%. Please go through the study materials again Here indicate UserGiven Answer Light Green color Indicates Correct Answer. Light Red Color Indicates Wrong Answer. 1 Demand is defined as desire backed by ability and _______ to pay. capacity responsibilty quantity willingnes 2 When the price of milk is Rs 20/- per litre, schools demand 2,000 litres. This statement about demand is incomplete as it lacks _____ dimension. time market price none of the above 3 Demand statement to be complete must have time

market price all of the above 4 Demand for any product solely depends upon its price. True False 5 There is the possibility that as more and more possess a particular good, others are also psychologically activated to demand that good. This is known as _____ effect. Bandwagon Snob Giffens Paradox 6 Qxd = f(Px,P1, Yd, U,Q,T,A . . . . etc) is a demand function, that considers _______ variables on which demand is dependent. a few price and quality all none of the above 7 Qxd = f(Px) where P1 = P0; Yd = Yd0; U = U0; etc. time market

price all of the above 8 The demand curve slopes ________ from left to right indicating inverse relation between demand & price. upwards towards downwards all of the above 9 Extension and contraction of demand is shown by shift in demand curves. movement across the demand curve. either shift or movement. all of the above. 10 When factors other than price of commodity influence the demand we have shift in demand curves. movement across the demand curve. either shift or movement. all of the above. 11 When at a lower price the same quantity is demanded, demand is said to have decreased

increased changed 12 Storability and postponability are two characteristics of _________ products. durable non-durable perishable all of the above. 13 The demand for most of the consumer goods is generally autonomous, whereas demand for producers goods is direct. pure. derived. all of the above. 14 Demand for personal computers and printers is a case of _____ demand cross composite joint all of the above. 15 In a monopolistic situation, market demand and firm demand are opposite

different increasing identical 16 A firm under monopoly is a price maker taker conscious all of the above. 17 The demand curve for a firm under perfect competition tends to be vertical horizontal sloping downwards sloping upwards 18 A firm under perfect competition is a price maker taker conscious all of the above. 19 Demand existing at a point of time is referred to as _______ demand. short term

long term both of the above 20 Demand that exists as a result of price changes, competition, product improvement etc is referred to as _______ demand. short term long term both of the above

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1 Wants are unlimited. recurring. cannot be satisfied fully all of the above 2 Means to satisfy wants are unlimited limited and scarce relative ample 3 Marginal utility goes on _______ as more and more units of a commodity are consumed. increasing

diminishing strengthening sliding 4 Total utility goes on _______ as more and more units of a commodity are consumed. increasing diminishing strengthening sliding 5 Desire to buy on the part of consumer is adequate to create demand for a commodity. True False 6 Reward to organization as a factor of production is rent interest wages profit 7 Consumer goes on consuming unit after unit of a commodity, till total utility becomes maximum and marginal utility maximum minimum

zero infinity 8 As income goes on increasing, the consumption also goes on increasing but at a rate _____ increase in income. more than less than equal to all of the above 9 As income goes on increasing, the savings also go on increasing but at a rate _____ increase in income. more than less than equal to all of the above 10 With increase in income, consumption increases and savings rise. fall. remain constant are uncertain 11 As income grows marginal propensity to consume goes on falling

rising remaining constant getting uncertain 12 As income grows marginal propensity to save goes on falling rising remaining constant getting uncertain 13 Market price is more influenced by the _______ side. supply demand price value 14 Normal price is more influenced by the _______ side. supply demand price value 15 To arrive at _____ profit, depreciation and taxes are to be deducted from revenue. gross

net retained distributed 16 Unit of study under Micro Economics is individual aggregate slicing lumping 17 Method used under Micro Economics is individual aggregate slicing lumping 18 Vision of birds eye view or forest as whole is available under Micro Economics Macro Economics both of the above 19 Alfred Marshall is advocate of Micro Economics Macro Economics

both of the above 20 Study of national income, general level of prices, trade cycles etc. form subject matter of Micro Economics Macro Economics both of the above
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1 Demand is defined as desire backed by ability and _______ to pay.

responsibilty quantity willingnes 2 When the price of milk is Rs 20/- per litre, schools demand 2,000 litres. This statement about demand is incomplete as it lacks _____ dimension. time market price none of the above 3 Demand statement to be complete must have

time market price all of the above 4 Demand for any product solely depends upon its price. True False 5 There is the possibility that as more and more possess a particular good, others are also psychologically activated to demand that good. This is known as _____ effect. Bandwagon Snob Giffens Paradox 6 Qxd = f(Px,P1, Yd, U,Q,T,A . . . . etc) is a demand function, that considers _______ variables on which demand is dependent. a few price and quality all none of the above 7 Qxd = f(Px) where P1 = P0; Yd = Yd0; U = U0; etc. time

market price all of the above 8 The demand curve slopes ________ from left to right indicating inverse relation between demand & price. upwards towards downwards all of the above 9 Extension and contraction of demand is shown by shift in demand curves. movement across the demand curve. either shift or movement. all of the above. 10 When factors other than price of commodity influence the demand we have shift in demand curves. movement across the demand curve. either shift or movement. all of the above. 11 When at a lower price the same quantity is demanded, demand is said to have decreased

increased changed 12 Storability and postponability are two characteristics of _________ products. durable non-durable perishable all of the above. 13 The demand for most of the consumer goods is generally autonomous, whereas demand for producers goods is direct. pure. derived. all of the above. 14 Demand for personal computers and printers is a case of _____ demand cross composite joint all of the above. 15 In a monopolistic situation, market demand and firm demand are opposite

different increasing identical 16 A firm under monopoly is a price maker taker conscious all of the above. 17 The demand curve for a firm under perfect competition tends to be vertical horizontal sloping downwards sloping upwards 18 A firm under perfect competition is a price maker taker conscious all of the above. 19 Demand existing at a point of time is referred to as _______ demand. short term

long term both of the above 20 Demand that exists as a result of price changes, competition, product improvement etc is referred to as _______ demand. short term long term both of the above
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1 For any change in the price of a commodity, demand for it may change _______ proportionately.

any of the above 2 Price Elasticity of demand is the degrees of responsiveness of quantity demanded of commodity X to the change in price of X itself commodity Y both X and Y all of the above 3 Demand is ______ elastic when elasticity of demand Ep is = 1; relatively

unit perfectly none of the above 4 Demand is relatively inelastic when Ep is = 1 Ep is = 0 Ep is < 1 any of the above 5 Demand is perfectly elastic when Ep is = 1 Ep is = 0 Ep is < 1 Ep is = a 6 Demand is relatively elastic when Ep is = 1 Ep is = 0 Ep is > 1 Ep is = a 7 As per Marshalls method of measuring demand elasticity, if a price change for a commodity causes increases in consumers total outlay on that commodity, then demand for that commodity is relatively elastic

relatively inelastic unit elastic all of the above 8 If change in income brings about change in demand for a commodity in the same direction, then income elasticity of demand with respect to that good is positive negative zero all of the above 9 As per Marshalls method of measuring demand elasticity, if a price change for a commodity causes falls in consumers total outlay on that commodity, then demand for that commodity is relatively elastic relatively inelastic unit elastic none of the above 10 The degree of responsiveness of quantity demanded of B to the change in price of A is the ___________ elasticity of demand. price cross income none of the above 11 If change in income brings about change in demand for a commodity in the opposite

positive negative zero any of the above 12 _________ cross elasticity of demand is observed among commodities that can substitute each other. Negative Corrobotive Positive Dubious 13 Cross elasticity of demand observed among commodities like mangoes and blankets or cell phones and pencils is bound to be Negative Corrobotive Positive Zero 14 Equation %?Qdx %?Px = ? ; shows cross elasticity Ex income elasticity Ey price elasticity Ep none of the above 15 Equation Y/Q x ?Q/?Y = ? ; shows

cross elasticity Ex income elasticity Ey price elasticity Ep none of the above 16 Monopolist can charge higher prices for commodities with elasticity of demand that is relatively elastic relatively inelastic perfectly elastic all of the above 17 Taxes cannot be levied heavily on commodities, demand for which is inelastic elastic both of the above 18 Demand for necessities is inelastic, and it will be observed that they are normally under the tax net. not under the tax net. both of the above 19 Those industries are considered for nationalization whose products have demand that is inelastic.

elastic. both of the above 20 When price of X was Rs. 60/-, demand for it was 100 units. When price changed to Rs. 50/- , the demand shifted to 110 units & at the price of Rs 40/- , demand was at 120 units. Figures show that demand for X must be relatively elastic perfectly elastic unit elastic relatively inelastic
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1 Demand Forecasting, like other forecasts, minimizes risk and margin of _______ in business. losses gains certainty uncertainty 2 Qualitative approach to demand forecasting is warranted for ______ term forecasts. short

long mid none of the above 3 Quantitative approach to demand forecasting is warranted for ______ term forecasts. short long mid none of the above 4 Qualitative approach to demand forecasting is the only approach available for demand forecasts for new products to be launched in the market. True False 5 This method is expected to counter bias in the results obtained from Expert Opinion Method of demand forecasting. Index Delphi Time series End-use 6 This method of demand forecasting is the most direct one. Time Series Econometric Models

Consumers Survey Moving Average 7 For the success of Consumer Surveys the ________ has to be simple, complete, covering all aspects and at the same time, interesting enough to evoke consumers response. sample regression questionnaire consensus 8 This method of demand forecasting covers response from each and every consumer. Econometric Models Sample Survey Exponential Smoothing Complete Enumeration 9 This method of demand forecasting is the most expensive among the three consumer survey methods. Econometric Models Sample Survey Exponential Smoothing Complete Enumeration 10 Results of demand forecast from Consumer Sample Survey method depend upon how ________ is the composition of the sample. consistent

uniform representative complex 11 This method can yield quick and reliable results in demand forecasting, provided number of consumers is limited. Time Series Complete Enumeration End-user Econometric Models 12 The fact that there are formidable barriers to learning the buying intentions of the household consumers limits usefulness of ________ methods of demand forecasting. Qualitative Quantitative both of the above 13 This method is certainly not representative of a Qualitative approach to demand forecasting. Exponential Smoothing Sample Survey End User Complete Enumeration 14 This method is certainly not representative of a Quantitative approach to demand forecasting. Index Numbers

Exponential Smoothing Sample Survey none of the above 15 Time Series method of demand forecasting provides data on various trends. But data on ______ is used for the forecast. cyclical fluctuation secular trend random fluctuations seasonal variation 16 Moving Average Method of demand forecasting requires demand in previous n months to be divided by 12 100 n None of the above. 17 Econometric models for demand forecasting can be formulated only quantitatively. True False 18 There is always a unique method for forecasting True False

19 Time Series Analysis and Regression Analysis are not the methods recommended for demand forecasting in _____ stage of product lifecycle. Introduction & Development Rapid Growth Steady Growth None of the above. 20 Sample Surveys are suitable for demand forecasting, but quite often they are Objective Subjective Quantitative None of the above.

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1 Supply refers to the various amounts of a good which the sellers are _______ to sell at any given price per unit of time. likely expected certain willing and able 2 Price is a major determinant of supply. Higher the price, normally _____ will be the quantity supplied. more less uncertain none of the above 3 Technological improvements determine the quantity of supply. They invariably lead to ______ quantity of supply. lower higher uncertain all of the above 4 With changes in prices or demand, supply gets adjusted immediately after a certain period in rare cases

fully 5 Supply function Qxs = f (Px) assumes all factors affecting supply are considered only price affecting supply is considered price and supply are not related none of the above 6 The supply curve slopes upwards from left to right indicating a ________ relationship. absence of presence of negative positive 7 Durability of a commodity would _______ sellers reservation price. decrease destabilize increase not affect 8 Low cost of storage of a commodity would _______ sellers reservation price. decrease destabilize increase

not affect 9 If change in the price of X is the only factor influencing the quantity supplied of X then we have either _________ in supply increase or decrease rise or fall extension or contraction none of the above 10 When factors other than price of a commodity influence the supply of that commodity, then we have either _________ in its supply increase or decrease rise or fall extension or contraction none of the above 11 Increases and decreases in Supply are reflected by _________ supply curve. movements across shifts in crosses on the none of the above 12 Decrease in supply is indicted when at a higher price ,________ quantity is supplied more same

no none of the above 13 Supply is ________ when elasticity of supply is < 1. unit elastic relatively inelastic relatively elastic perfectly inelastic 14 Supply is ________ when elasticity of supply is > 1. unit elastic relatively inelastic relatively elastic perfectly inelastic 15 Supply is ________ when elasticity of supply is = 0. unit elastic relatively inelastic relatively elastic perfectly inelastic 16 Marshall stated that supply reacts to a price change immediately. only after some time

both of the above 17 Depending upon, __________ supply can adjust itself either partly or fully or not at all to the change in demand and price. the period of time cost of production both of the above 18 In the very short period, supply _______ adjust to change in demand. can cannot should none of the above 19 In the long period, supply is expected to _______ adjust to change in demand. hardly fully rarely fail to 20 Nothing is certain about demand and supply in the ______ period. short very long regular

intermittent

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1 Cost is valuation placed on the use of manpower. material. machines. resources. 2 Costs incurred even if there is no output, are known as _______ costs. variable semi-fixed semi-variable fixed 3 Costs of raw materials, power, fuel etc. are known as _______ costs. variable direct prime all of the above 4 Total cost TC curve is _______ to the total variable cost TVC curve. parallel diagonal

perpendicular none of the above 5 If output goes on increasing average ______ cost, goes on decreasing. variable direct fixed all of the above 6 Average fixed cost curve slopes downward from right to left. left to right. both of the above 7 Other things remaining the same, AC curve which is summation of these AFC & AVC , is L shaped. U shaped Y shaped none of the above 8 _________ = TCn - TCn-1. AFCnth ACnth

MCnth None of the above 9 When average cost is falling, the Marginal Cost curve lies ______ the Average Cost Curve. over parellel under none of the above 10 The U shape of long run AC curve is ________ than the U shape of short run AC curves. flatter sharper deeper none of the above 11 _________ costs of production are the prices which have to be paid to factors of production. Money Real both of the above 12 _________ cost is the current cost that will have to be incurred by the firm to purchase the input acquired in the past. Replacement

Historical Social None of the above 13 Financial accountants, tax authorities are always concerned with _______cost. historical variable real none of the above 14 Opportunity cost is also known as _______ cost. fixed variable alternate real 15 When increase in output of one product causes increase in output of another product, then the products and their costs are termed _____ costs. joint byproduct alternate none of the above 16 when increase in output of one product is accompanied by a reduction in output of other products, it is a case of ______ products. joint

byalternative none of the above 17 Under two or more products emerging from the same process, when one product is much less important that the other, it is regarded as alternate product by-product joint none of the above 18 ________ cost means even though work is performed there is no corresponding payment. Implicit Explicit both of the above 19 When a factory is set up, there is ______ cost to the owner in the form of buildings, plant etc. private social both of the above 20 When externalities take the form of pollution, congestion etc., these are termed positive

negative both of the above

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1 The process of addition of _________ to the existing matter by changing form, place and keeping it over time is referred to as Production in Economics. manpowe r material capital utilities 2 This factor is considered to be essentially free gifts of Nature. Land Labour Capital Organization 3 This is considered to be essentially a man made factor of production. Land Labour Capital Organization 4 This factor coordinates the various other factors in a manner to minimize the cost of

production and maximize the output Land Labour Capital Organization 5 ______ function is the economists summary of technical knowledge. Production Supply Demand Distribution 6 The ______ is that period of time in which all factors are variable. short-run long-run both of the above 7 The factors of production are _____ substitutes for one another hence the phenomenon of diminishing returns imperfect perfect alternate complementary 8 In the process of production, when all the inputs can be varied in equal proportion then

the relation between factor inputs and the output gives rise to iso-quant diminishing returns returns to scale Laws of returns 9 When we have Increasing Returns to Scale, production function ? is >1 =1 =0 <1 10 The Cobb Douglas Production Function is a Linear Homogeneous Production function implying ______ Returns to Scale. constant increasing diminishing None of the above 11 The iso-quant curve must slope _______ from left to right. upwards downward slightly deeply

convex concave at tangent none of the above 13 No two iso-quant curves should intersect True False 14 Producers Equilibrium is at the point of _____ Cost Factor Combination highest shortest least none of the above 15 Technical, managerial, commercial, financial and risk-bearing are typical _________ economies. internal external environmental technical 16 Technical, managerial, commercial, financial and risk-bearing are typical internal economies.

diseconomies. both of the above 17 Appointment of experts as function heads, Division of each department into independent sections or Total division of labor in management are examples of _______ economies. Technical commercial risk bearing managerial 18 Lower interest rates, credit and finance at better terms and conditions or facility to offer better security are examples of _______ economies. commercial financial both of the above 19 Efficiency to Inefficiency, Administrative difficulties are examples of _______ diseconomies. internal external both of the above 20 On the iso-quant curve, representing 20 units of output, different factor combinations on this curve are to yield _______ output minimum different units of

20 units maximum
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