BUSINESS ECONOMICS
1. Who is the father of Economics?
Alfred Marshall
Adam Smith
Lionel Robbins
Samuelson
2. Economics is a ________.
Positive science
Normative science
None
Both
3. The relationship between price and demand is ____________.
Direct
Positive
Negative
None of these
4. Law of demand shows ___________ relationship between price and quantity
demanded.
Positive
Negative
Direct
None of the above
5. Consumer surplus is ____.
Potential price - actual price
MVn=TVn-TVn-1
Demand=supply
None
6. Relatively elastic demand is ____.
e p = 0
e p > 1
e p <1
e p = 1
7. If demand is perfectly inelastic then e is _____.
E∞
e <1
e>1
e=0
8. Indifference curve approach was given by ___________
Alfred Marshall
Adam Smith
Hicks and R.G.D. Allen
J.M.Keynes
9. Production refers to ___.
Destruction of utility
Creation of utility
Exchange value
None of the above
10. The long run average cost curve is also called as_________.
Budget line
Planning curve
Indifference curve
None of the above
11. The main characteristic of monopoly market structure is_________.
Single buyer
Single seller
Many sellers
Many buyers
12. _______ is absence of competition.
Monopolistic
Monopoly
Oligopoly
Duopoly
13. The average income of the people of a country in a particular year is _____
Net national product
National income
Per capita income
Personal income
14. _________ is the total value of all final goods and services produced by the country
in certain year.
National Income
Personal income
Corporate income
Foreign income
15. Relationship between price and supply is ________.
Positive
Negative
Direct
None of the above
16. Perfectly elastic demand curve is a _________ curve.
U shaped
L shaped
Horizontal
Vertical
17.If demand is perfectly elastic then e is _____.
E ∞
e <1
e>1
e=0
18.Relatively inelastic demand is ____.
e p = 0
e p > 1
e p <1
e p = 1
19. Unitary inelastic demand is ____.
e p = 0
e p > 1
e p <1
e p = 1
20. The kinked demand curve explains
Price rigidity
Price flexibility
Demand rigidity
Demand flexibility
21. Macroeconomics is the theory of ________.
Income and employment
Price Theory
Demand Theory
Cost Theory
22. The price elasticity of demand measures _______.
The slope of a budget curve.
How often the price of a good changes.
The responsiveness of the quantity demanded to changes in price.
How sensitive the quantity demanded is to changes in demand
23. Firms in perfect competition face a ________.
Perfectly elastic demand curve
Perfectly inelastic demand curve
Perfectly elastic supply curve
Perfectly inelastic supply curve
24. Few sellers is the feature of
Monopoly
Oligopoly
Perfect competition
Monopolistic competition
25. Market which has two firms is known as
Oligopoly
Monopoly
Duopoly
Perfect competition
26. _________represents the tabular form of quantity demanded of a particular product
during a given period of time.
Law of demand
Demand Curve
Demand schedule
Cross demand
27. Extension and contraction of demand for a good occurs as a result of
Change in the quality of good
Change in the price of a good
Availability of cheaper substitutes
Increases in Income (B)
28. An exceptional demand curve is one that moves
Upward to the right
Downward to the right
Horizontally
Upward to the left. (A)
29. In the case of a Giffen good, a fall in its price tends to
Demand remain constant
Demand increases
Reduce the demand
Abnormal change in demand. (C)
30. What would be the value of elasticity of demand, if the demand for the
good is perfectly inelastic?
0
1
Infinity
Less than Zero (A)
31. The demand for necessities is usually
Highly elastic
Highly inelastic
Unit elasticity
Relatively inelastic (B)
32. The responsiveness of demand to the change in income is known as
Price elasticity of demand
Cross elasticity of demand
Income elasticity of demand
None of these (C)
33. Which is not a statistical method in forecasting?
Trend analysis
Consumer survey
Regression method
Least square method (B)
34. The law which studies the direct relationship between price and quantity
supplied of a commodity is
Law of demand
Law of variable proportion
Law of supply
None of the above (C)
35. When price rises, quantity supplied
Expands
Falls
Increases
Unchanged (A)
36. In case of perfectly inelastic supply the supply curve will be
Rising
Vertical
Horizontal
Falling(B)
37. When a percentage in price results in equal change in quantity supplied, it
is called,
Elastic supply
Perfectly inelastic
Elasticity of supply
Unitary elastic supply (D)
38. When supply of a commodity decreases on a fall in its price, its is called
Expansion of supply
Increase in supply
Contraction of supply
Decrease in supply. (C)
39. Which utility approach suggests that utility can be measured and
quantified?
Ordinal
Cardinal
Both a &b
Diminishing marginal utility. (B)
40. ---------------------- of a commodity is the additional utility derived by a
consumer, by consuming one more unit of that commodity.
Marginal utility
Total utility
Average utility
Maximum utility (A)
41. At what point does total utility starts diminishing?
When marginal utility is positive
When it remains constant
When marginal utility is increasing
When marginal utility is negative.(D)
42. Consumer’s surplus is also known as
Indifference surplus
Elasticity of supply
Buyer’s surplus
Indifference surplus. (C)
43.Which shows various combinations of two products that give same amount
of satisfaction?
Iso-cost curve
Marginal utility curve
Iso-quant
Indifference curve
44. Indifference curve slopes,
Downward to the right.
upward to the right.
Downward to the left.
Upward to the left. Ans. a.
45. The process of capital formation includes,
Capital of savings
Mobilization of savings
Investment of savings
All of the above Ans. d
46. Internal economies is related to
Marketing economies
Financial economies
Labour economies.
All of the above Ans. d
47. When the output produced is maximum for the given level of input the
firms achieve
Maximum profit
Technical efficiency
Economic efficiency
None of these. Ans. b.
48. The shape of TFC curve is
Horizontal line
Downward sloping
U shaped
Upward sloping
49. The point where TR curve cuts TC curve is called
Equilibrium point
Split off point
Point of inflexion.
Break even point.
Ans. d
50. In perfect competition a firm increases profit when _____ exceeds
________.
TC, TR
MC, MR
AR, AC
TR, TFC
51. The discriminating monopoly can be categorized as_______.
Personal
Place
Use
All of the above
52. ---------------------- deals with the behavior of individual decision makings
units such as consumers, resource owners and so on.
Macro economics
Micro economics
Mini economics
None of these
53. A Firm’s profitability depends much on its ----------------- of production.
Price
Charge
Cost
All the above
54.Low price of a good generally keeps its price elasticity of demand as --------
---.
High
Medium
Normal
Low
55. In the case of inferior goods, the income elasticity of demand is --------------
---.
Positive
Negative
Positive, negative
Negative, positive
56. When as a result of increase in price of goods, total expenditure made on
goods falls, price elasticity of demand is ------- than unity.
Greater
Lesser
Nominal
None of these
57.Market ----------- occurs where demand and supply are equal.
Equilibrium
Utility
Elastic
None of these
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