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WorksheetsBCK MCQ 1
Total questions: 100
Worksheet time: 2hrs 40mins
‘’The wealth of Nation” Considered as the first modern work of Economics was written by :
Marx
Adam-Smith
Lipsey
Allen
Business Economics is:
Normative Science
Interdisciplinary
Pragmatic in approach
All of the above
The Central Economic Problem is:
What to produce?
What provision (if any) are to be made for economic growth?
How to produce?
All of the above
The ‘communist Manifesto’ was published in:
1848
1905
1952
None of the above
Which of the following is not within the scope of Business Economics??
Risk analysis
Accounting Standards
Capital Budgeting
All of the above
The allocation of resources in a free-market economy is determined by:
Level of profits of firms
Consumer preferences
Central planning authority
None of these
Which of the following exhibit direct price demand relationship:
Substitute goods
Complementary goods
Giffen goods
None of these
Which of the following is a variable case for a firm?
Interest on loan
Monthly rent
Insurance premium
Wages to employees
A firm’s average fixed cost (AFC) is Rs. 20 at Six Units of output. What will be AFC at four Units of Output?
Rs. 20
Rs. 30
Rs. 40
Rs. 50
X,Y and Z are confused with the formula for defining TC
(a) X Says : TC = TVC +TFC
(b) Y Says: TC = AC X output
(c) Z Says: TC = ZMC + TFC
Identify who amongst them is correct
X
Y
Z
All of them
Which two curves are intersected by MC Curve at their minimum points:
AC and AVC
AC and AFC
AC and TVE
AVC and AFC
There will be ------- in the demand Curve of cars with an increase in the Price of Petrol
Leftward shift
Rightward shift
Upward movement
Downward movement
The Consumer surplus is derived from:
Law of diminishing marginal utility
Marginal rate of substitution
Budget line
None of these
Income elasticity in the case of Inferior good will be:
Zero
Positive
Negative
Infinite
What are the determinant of Price elasticity of demand?
Availability of substitute
Tied demand
Time period
All of these
When the two goods are complementary to each other the cross elasticity between them is:
Negative
Positive
Either of these
None of these
According to Hicks and Allen the demand curve slopes downwards due to :
Income and substitution effect
Diminishing marginal utility
Price elasticity
None of these
The heavy advance order for Capital goods is an example of
Lagging indicator
Leading indicator
Coincidental indicator
None of these
The commonly available technique of demand forecasting are:
Survey of buyer's intention
Expert opinion method
Least square method
All of these
If the price of both goods fall how would that budget line, be affected?
The budget line will be shifting to the left
The budget line would not shift
So long as the prices of both goods change in the same proportion the new budget line will have same slope
None of these
Two Suppliers and many buyers are in -------- market.
Duopoly
Monopoly
Perfect competition
Oligopoly
Interest on own capital is a ----
Explicit cost
Implicit cost
Future cost
None of these
The transformation of physical inputs into output is known as ----
Supply
Demand
Cost
Production
When e = 0 elasticity of demand is
Unitary
Inelastic
Perfectly inelastic demand
None of these
Which curve is not affected by fixed cost?
MC curve
TC curve
AC curve
AFC curve
Which two curves are intersected by MC curve at their minimum points:
AC and AVC
AVC and AFC
AC and AFC
AC and TVC
Which of the following is an example of “Implicit cost”?
Interest that could have been earned on retained earnings used by the firm to finance expansion
Payment of rent by the firm
Interest Payment made by the Firm for funds borrowed from a Bank
Payment of wages by the firm
Demand curve of perfectly competitive market form is a horizontal straight line parallel to X-axis. It happens because:
Selling costs are zero
There is freedom of entry and exit
Firm is a price-taker
None of these
Under which market form, the demand curve is steeper as compared to monopolistic competition?
Monopoly
Oligopoly
Perfect competition
None of these
Firms cooperate with each other in determining price or output or both. It is a feature of:
Pure Oligopoly
Non-collusive Oligopoly
Imperfect Oligopoly
Collusive Oligopoly
Consumers get maximum variety of goods under:
Perfect competition
Monopolistic competition
Monopoly
Pure competition
‘A few big sellers’ is a characteristics of:
Perfect competition
Monopolistic competition
Oligopoly
None of these
Ceteris paribus means:
Holding supply constant
Holding demand constant
Price being constant
Other factors being constant
Who defined Business economics in terms of the use of economic analysis in the formulation of business policies?
Adam Smith
Robbins
Joel Dean
Alfred Marshall
A rational person does not act unless___
The action is ethical
The action produces marginal cost that exceeds marginal revenue
The action produces marginal benefits that exceed marginal costs.
The action makes money for the person
Which one of the following countries does not follow Capitalist economic system?
USA
UK
Germany
India
“The increase in demand of a commodity due to the fact that others are also consuming the same commodity” is known as__________
Veblen effect
Bandwagon effect
Snob effect
Demonstration effect
In the Cobb-Douglas production function given as: Q = A*L^a*k^(1-a) the share of labour in total production is
a
1 - a
A
a .L
Assertion (A): Investment has also a supply effect.
Reason (R): Because it raises capacity to produce.
(A) is true and (R) is false
Both (A) and (R) are true & (R) is the correct explanation of (A)
Both (A) and (R) are true & (R) is not the correct explanation of (A)
(A) is false and (R) is true
Which of the following statement is incorrect?
Kinked Demand Curve is related to Oligopolistic market
Even a monopolistic firm can incur losses
Firms are price takers in perfectly competitive market
It is always beneficial for a firm in a perfectly competitive market to discriminate prices
In economics, generally the classification of the markets is made on the basis of
Time
Geographic area
Volume of business
All of these
Peak is the ____________ stage of expansion
Later
Earlier
Either A or B
None of the above
Coincident economic indicators are also called ___________
Concurrent indicators
Compound indicators
Coexist indicators
Random indicators
Demand for complementary goods are:
Derived demand
Autonomous demand
Aggregate demand
None of these
The budget line is also known as:
Production possibility curve
Consumption possibility curve
Iso utility curve
None of these
Allocation of resources is dealt in:
Macro-economics
Micro-economics
Public Finance
None of these
The Product under Pure Monopoly is:
Homogenous
Differentiated
Unrelated
None of these
Demand for Electricity is elastic because
it is very expensive
it has alternative uses
it has a number of close substitutes
None of these
Fluctuation in economic activities according to Keynes are due to :
Innovations
Changes in money supply
Fluctuation in aggregate effective demand
Fluctuation in government spending
In business cycle peaks and troughs are collectively known as:
Turning points
Equilibrium points
Real business cycle events
None of these
Price Rigidity explained by Sweezy’s model is related to which market form:
Monopoly
Oligopoly
Monopolistic competition
None of these
Secular Period is also known as :
Short period
Very long period
Long period
Very short period
Which of the following is correct about Cartel?
There are few firms
All of which are similar in size
Most cartels have only a subset of producers
All of the above
Which of the following is not a determinant of the firm’s cost function?
Taxes
The production function
The price of the firm's output
None of these
Comfort lie between:
inferior goods and necessities
luxuries and inferior goods
necessities and luxury
None of these
Inequality and Exploitation is minimal under:
Mixed economy
Capitalism
Socialism
None of these
A vertical supply curve parallel to Y axis implies that the elasticity of supply is :
Infinity
Zero
Greater than zero but less than infinity
Equal to one
When the Output of the firm increases in the Short run , its average fixed cost :
Decreases
Increases
First decline and then rise
Remains constant
Price discrimination will be profitable only if the elasticity of demand in different sub market is :
Different
Uniform
Zero
Less
When e > 1 the MR is
One
Negative
Positive
Zero
Find out the incorrect:
Economic activities are drive by rationality.
Economic activities are guided by self-interest
Non-Economic activities are driven by emotional or sentimental force.
Non-Economic activities are not at all important in life
National Water Mission is related to -
Environmental aspect
Legal cause
Social welfare
Economic planning
One of the leading companies in Paint Industry, Asian Paints, was incorporate is in the year-
1962
1942
1868
1980
Mark incorrect as Globalization refers to:
Encouraging regional economic cooperation
Integrating the world into one economic global village
It pares the way for higher factor mobility
Drawing countries out of their insulation
Which of the following is NOT a function of RBI?
Monopoly of note issue
Banker to the government
Advancing loan to large business houses
Controller of credit
Which of the following is incorrect?
Arbitrage is simultaneous purchase and sale of a commodity
Current assets are those which can be turned into cash within a year
Intangible assets are those which do not have physical form. They are in the form of rights
Break-even point is also called an optimum point of a firm
The Karta in Joint Hindu Family Business has
Limited liability
Unlimited liability
No liability for debts
Joint liability
Environmental Analysis helps in:
Providing input for strategic decision making
Turning threats to firm’s advantage
Anticipate opportunities and to take optimal responses
All of the above
Which one of the following is NOT a Foreign Company?
Dr. Reddy’s Laboratories Ltd.
Walmart
Nestle
HP
Privatization may NOT be of conceptualized in form of:
Divestment
Disinvestment
Dedication
Displacement
Which one of the following is NOT a SEBI function as one body?
Quasi-legislative
Quasi-judicial
Quasi-fiscal
Quasi-executive
ADR stands for:
American Deficit Record
American Depository Receipt
Asset Depreciation Record
Asset Depository Receipt
Which of the following is NOT an economic objective of the firm?
Sales growth
Improvement in market share
Profits and return on investment
Conservation of natural resources
In the PEST framework for environmental analysis, what does the letter ‘E’ stand for?
Ecological
Economic
Ethical
Educational
The mission of Bharti Airtel Ltd. is:
Hunger to win customers for life
Focus on value-based marketing
Continual improvement
Serving for better
Which policies are meant for specific segments of society, it can be in the area of public distribution to people below poverty line, justice for women etc.?
Financial
Distributive
Facilitating
Economic
Which of these was originally privately owned?
SEBI
IRDAI
RBI
NABARD
Risk is a probable chance that investments’ actual returns will be _____ than as calculated
Increased
Reduced
Equal
None of the above
Find out the incorrect:
Sole proprietor is a business unit having unlimited liability
LLP firm may be constituted
HUF business may be formed by a group of people who do not belong to family
Hindu includes Buddha, Jain, Sikh, Parsi families
Mark incorrect: Partnership implies
Contractual ownership of business
Liability of partner is limited to the extent of one’s share capital
The contract is an agreement enforceable at law is called deed
Deed may be registered in India under the Partnership Act, 1932
Mark the correct:
Tata Sons is a holding company
Infosys, Wipro and TCS are IT companies
Flipkart, Amazon, Myntra are online trading companies
All of the above are correct
Find out the correct:
For sustainable economic development, FII is more preferable to FDI
FDI has strong speculative effect in equity market
In India, permission for FDI is not uniform for all sectors.
FDI is usually done to reap short term gains.
Which of the following Institution has a portfolio of Natural Resource Management Programmes involving diverse fields like Watershed Development, Tribal Development etc., though dedicated funds set up for the purpose?
SEBI
RBI
SBI
NABARD
Which of the following is not covered under four P’s of Marketing?
Product
Price
Place
Procedure
A partnership may NOT be formed to carry on:
Any trade
Occupation
Profession
Social enterprise
Relationship between organisation and environment can be described through:
Exchange of information
Exchange of resources
Exchange of influence and power
All of the above
Luca Maestri is the CFO of which company?
Walmart
Nestle
Apple
Microsoft
The form of privatization, where government keeps hold of responsibility and private enterprise handles the management of it fully or partly is known as:
Disinvestment
Deregulation
Delegation
Decentralization
Where is the head office of NABARD?
Mumbai
Delhi
Gurugram
Bengaluru
What is a bull market?
A market in which the stock prices are increasing consistently
A market in which the stock prices are decreasing consistently
A market in which the stock prices are stable over a long time
None of the above
A HUF cannot comprise members of a:
Hindu and Sikh family
Parsi family
Buddhist family
Muslim Family
The term PESTLE analysis is used to describe a framework for analyzing:
Macro environment
Micro environment
Both macro and micro environment
None of the above
Indane LPG is the product of which corporation in India?
IOCL
NTPC
ONGC
PGCIL
Simplification of trade restrictions related to import is an example of:
Globalization
Privatization
Disinvestment
Aggregation
The RBI has been vested with extensive power to control and supervise commercial banking system under the-
Reserve Bank of India Act, 1934
The Banking Regulation Act, 1949
Both (a) and (b)
The Companies Act, 2013
______ is a strategy that is used to minimize the risk of a particular investment and maximize the returns of an investment.
Cap
Ecryption
Hedge
Term insurance
Which one is NOT a part of environmental scanning?
Identify opportunities & threats affecting business
It takes events, trends, issues and expectations in the consideration
It is done by government to know if the firm is engaged in any anti national activity.
It helps in formulating future path of the firm.
Identify the sector where, FDI is NOT permitted:
Automobile
Infrastructure
Textile
Atomic energy
How many members of SEBI should be from RBI?
4
3
1
2
. A portion of the after‐tax profits paid out to the owners of a business as a return on their investment is:
Dividend
Expense
Expenditure
Deferred Income
