NEW
Font size
WorksheetsEconomics - Kaun Banega CA
Total questions: 60
Worksheet time: 35mins
Endogenous factors refer to _______________ causes.
(a) Internal
(b) External
(c) Economic
(d) Ecological
The great depression of ____________ is still cited for the enormous misery & human sufferings it caused.
(a) 1929 – 1930
(b) 1929 – 1931
(c) 1929 – 1932
(d) 1929 – 1933
Which of the following macroeconomic variables would you include in an index of leading economic indicators?
(a) Employment
(b) Inflation
(c) Real interest rates
(d) Residential investment
According to trade cycles occur due to the onset of innovations.
(a) Haw trey
(b) ADAM Smith
(c) JM Keynes
(d) Schumpeter
The most probable outcome of an increase in the money supply is
(a) interest rates to rise, investment spending to rise, and aggregate demand to rising
(b) interest rates to rise, investment spending to fall, and aggregate demand to fall
(c) interest rates to fall, investment spending to rise, and aggregate demand to rising
(d) the interest rate of all investment spending to fall and aggregate demand to fall
Which Of The Following Statement Is Not Correct?
(a) Under monopoly there is no difference between a firm and industry.
(b) A monopolist may restrict the output and raise the price.
(c) Commodities offered for sale under perfect competition will be heterogeneous.
(d) Product differentiation is peculiar to monopolistic competition
A firm having a kinked demand curve indicates that:
(i) If the firm reduces the price, competitive firms also reduce the price
(ii) If the firm increases the price, competitive firms also increases the price
(iii) If the firm reduces the price, competitive firms do reduce the price
(iv) If the firm increases the price, competitive firms do increase the price
Only (i) above
Both (i) and (iv) above
Both (ii) and (iv) above
Both (ii) and (iii) above
When the price is less than the average variable cost at the profit-maximizing level of output, a firm should:
(a) produce where marginal revenue equals marginal cost if it is operating in the short run.
(b) produce where marginal revenue equals marginal cost if it is operating in the long run.
(c) shutdown, since it will lose nothing in that case.
(d) shutdown, since it cannot even cover its variable costs if it stays in business
The monopolistic competition differs from perfect competition primarily because
In monopolistic competition, firms can differentiate their products.
In perfect competition, firms can differentiate their products.
In monopolistic competition, entry into the industry is blocked.
In monopolistic competition, there are relatively few barriers to entry
A firm in a perfectly competitive market is a price taker. This designation as a price taker is based on the assumption that:
The firm has some but not complete control over its product price
There are so many buyers and sellers in the market that anyone buyer or seller cannot affect the market
Each firm produces a homogeneous product
There is an easy entry into or exit from the marketplace.
In a competitive market, if price exceeds Average Variable Cost (AVC) but remains less than Average Cost (AC) at the equilibrium, the firm is:
Making a profit
Planning to quit
Experiencing loss but should continue production
Experiencing loss but should discontinue production.
At price P1, the -firm in the figure would produce
Zero output
Q3
Q5
Q6
In the above figure, curve E is the firm’s
Marginal Cost Curve
Average Cost Curve
Demand Curve
Marginal revenue Curve
The time element was conceived by
Adam Smith
Alfred Marshall
Pigou
Lionel Robinson
At which of the following points, does the Marginal Cost Curve meet the Average Variable Cost Curve?
Shut Down Point
Break-Even Point
Equilibrium Point
Profit Maximization Point
Which of the following statements is false?
(a) Economic costs include the opportunity costs of the resources owned by the firm.
(b) Accounting costs include only explicit costs.
(c) Economic profit will always be less than accounting profit if resources owned and used by the firm have any opportunity costs.
(d) Accounting profit is equal to total revenue less implicit costs.
Average Revenue
Money which a Firm realises by selling certain units of a commodity.
Revenue earned per unit of output
Change in Total Revenue (TR) resulting from the sale of an additional unit of the commodity.
None of the above
When a market is in equilibrium —
No shortages exist
Quantity demanded equals quantity supplied
A price is established that clears the market.
All of the above are correct.
An Isoquant shows
All the alternative combinations of two inputs can be produced by using a given set of outputs fully and in the best possible way.
All the alternative combinations of two products among which a producer is indifferent because they yield the same profit.
All the alternative combinations of two inputs yield the same total product.
Both (b) and (c).
In the long—run, the Firm will operate at the _____________ for any output level, by choosing the appropriate Plant Size.
Optimum cost
Minimum cost
Maximum cost
Nothing can be said
Which one of the following is also known as the planning curve?
Long-run average cost curve.
Short-run average cost curve.
The average variable cost curve
The average total cost curve
Marginal Costs are applicable in —
Short—Run
Long—Run
Both (a) and (b)
Neither (a) nor (b)
Which of the following is a variable cost in the short run?
(a) rent of the factory.
(b) wages paid to the factory labour.
(c) interest payments on borrowed financial capital.
(d) payment on the lease for factory equipment
Which of the following statements is correct?
When the average cost is rising, the marginal cost must also be rising.
When the average cost is rising, the marginal cost must be falling.
When the average cost is rising, the marginal cost is above the average cost.
When the average cost is falling, the marginal cost must be rising.
Social Cost =
Explicit Cost + Implicit Cost
Private Cost + External Cost
Private Cost + Internal Cost
None of the above
All variable costs are avoidable or discretionary in nature. This statement is ------
True
False
Partially True
Nothing can be said
Identify the correct statement:
The average product is at its maximum when the marginal product is equal to the average product.
The law of increasing returns to scale relates to the effect of changes in factor proportions.
Economies of scale arise only because of the indivisibilities of
factor proportions.
Internal economies of scale can accrue when industry expands beyond optimum
Which of the following statements is not true?
Accumulation of capital depends solely on the income of individuals.
Savings can be influenced by government policies.
External economies go with size and internal economies with the location.
The supply curve of labour is an upward sloping curve.
To economists, the main difference between the short run and the long run is that:
In the short run, all inputs are fixed, while in the long run inputs are variable.
In the short run, the firm varies all of its inputs to and the
least-cost combination of inputs.
In the short run, at least one of the firm’s input levels is
fixed.
In the long run, the firm is making constrained decisions about how to use existing plants and equipment efficiently.
Which of the following is the best definition of “production function”?
Their relationship between market price and quantity supplied.
The relationship between the firm’s total revenue and the cost of production.
The relationship between the quantities of inputs needed to produce a given level of output.
The relationship between the number of inputs and the firm’s marginal cost of production.
Diseconomies of Scale refer to —
Forces which reduce the Average Cost of producing a product as the Firm expands the Size of its Plant
Forces which reduce the Marginal Cost of producing a product as the Firm expands the Size of its Plant
Forces which increase the Average Cost of producing a product as the Firm expands the Size of its Plant
Forces which increase the Marginal Cost of producing a product as the Firm the Size of its Plant
In the long run all factors -
Are Fixed
Are Variable
Remain unchanged
None
The law of variable proportions is drawn under all of the assumptions mentioned below except the assumption that:
the technology is changing.
there must be some inputs whose quantity is kept fixed
we consider only physical inputs and not economically portability in monetary terms.
the technology is given and stable.
____________________ means a sustained increase in the stock of real capital of a country.
Capital formation
Savings
Mobilizationofsavings
Mobilization of capital
The production function is a relationship between a given combination of inputs and:
another combination that yields the same output.
the highest resulting output.
the increase in output generated by the one-unit increase in one output.
all levels of output that can be generated by those inputs.
Diminishing marginal returns implies:
decreasing average variable costs.
decreasing marginal costs.
increasing marginal costs.
decreasing average fixed costs.
When the consumers have more & more unit of food, he is prepared to give up less & less units of clothing. It is due to ________________-
Falling MRS
Rising MRS
Constant MRS
None of these
The substitution effect of fall in the price of the commodity will lead to :
An upward movement in the indifference curve
Download movement in indifference curve
Movement from lower IC to a higher one
None
The slope of IC can be:
Downward
Upward
Straight line
Can be all above
In the case of a right-angled indifference curve the goods are:
Perfect complements
Perfect substitutes
Inferior goods
Giffen good
The concept of Consumer’s Surplus is based on the assumption that Marginal Utility of Money is
Zero
Negative
Constant
Any of the above
A Buyer’s willingness to pay is that Buyer’s —
The minimum amount he is willing to pay for a product.
Producer Surplus
Consumer Surplus.
Maximum Amount he is willing to pay for a product.
Which of the following is an assumption under Cardinal Approach to Utility Analysis?
Measurability of Utility in monetary terms
Change in Marginal Utility of Money
Utility arises even at zero consumption
All of the above
A Rational Person does not act unless —
The action is ethical.
The action leads to Marginal Costs that exceed Marginal Benefits.
The action produces Marginal Benefits that exceed Marginal Costs.
The action makes money for the person
Which of the following statement is not correct?
Under monopoly, there is no difference between a firm and industry.
A monopolist may restrict the output and raise the price.
Commodities offered for sale under perfect competition will be heterogeneous.
Product differentiation is peculiar to monopolistic competition
Given the Market Demand, the burden of specific tax that will be borne by the Consumer (Buyer) depends on the —
Price Elasticity of Supply
Price Elasticity of Demand
Consumer’s Ability
Type of the Product
If the Demand of a commodity is perfectly inelastic, an increase in Supply will result in —
Decrease in both Price and Quantity at equilibrium
Increase in both Price and Quantity at equilibrium
Increase in Equilibrium Quantity, Equilibrium Price remaining constant
Decrease in Equilibrium Price, Equilibrium Quantity remaining constant
If the supply of a commodity is perfectly elastic, an increase in Demand will result in —
Decrease in both Price and Quantity at equilibrium
Increase in both Price and Quantity at equilibrium
Increase in Equilibrium Quantity, Equilibrium Price remaining constant
Increase in Equilibrium Price, Equilibrium Quantity remaining constant
If the supply of bottled water decreases, other things remaining the same, the equilibrium price —— and the equilibrium quantity ————
increases; decreases.
decreases; increases.
decreases; decreases.
increases; increases.
A decrease in the demand for cameras, other things remaining the same will.
increase the number of cameras bought.
decrease the price but increase the number of cameras bought.
increase the price of cameras.
decrease the price and decrease in the number of cameras bought.
The elasticity of supply is defined as the responsiveness of quantity supplied of a good to change in ____.
Price of concerned good
Price of a substitute good
Demand
None
In case of failure of rains, floods, fires, etc. the supply of agricultural commodities will
Increase
Decrease
Remain Constant
Become Zero
Which of the following is the determinant in the Law of Supply?
Technology
Price of related goods
Price of the product
None of these
The concept of Elasticity of Demand was developed by —
Alfred Marshall
Edwin Cannon
Paul Samuelson
Fredric Bonham
Two important factors which make difference in the Elasticity of Demand for different commodities are
Preferences and Income
Income and Expenditure
Quantity and Price of the Commodity
Tax Rates and Level of Income
Which of the following statements is correct?
With the help of statistical tools, the demand can be forecasted accurately.
The more the number of substitutes of a commodity, the more elastic is the demand.
Demand for butter is perfectly elastic.
Gold jewellery will have a negative income elasticity
What effect does an increase in the price of a product have on the Purchasing Power of the Consumer?
Increases
Decreases
No effect
Decreases initially, but increases over a period of time
If the demand curve is parallel to the x-axis, what will be the nature of elasticity?
Perfectly elastic
Inelastic
Elastic
Highly elastic
Which of the following statements is true?
The Economy has unlimited resources and there is a need for choosing the most efficient alternative.
Decisions are always taken under conditions of imperfect knowledge and uncertainty
Decision making arises only if there is a choice available
All of the above
Which type of economy gives rise to the most efficient allocation of resources and capital in the
standard Micro— Economics framework?
Free Market Economy
Command Market Economy
Controlled Market Economy
Regulated Market Economy
