Q1  If a 12% fall in the price of burgers leads to a 3% increase in quantity demanded of burgers, then price elasticity would be

5. —1.25
5. —4
5. -0.25
5. -0.5

Q3  A movement on the demand curve will take place when there is

5. a change in own price of the product
5. a change in price of a substitute
5. a change in consumer preferences
5. an increase in per capita income

Q4  A perfectly competitive seller

5. operates at the optimum level of output and charges a higher price
5. operates at the sub-optimum level of output and charges a higher price
5. operates at the optimum level of output and charges a lower price
5. operates at the sub-optimum level of output and charges a lower price

Q5  The reason that you don't drink five cups of coffee at breakfast is that

5. the marginal utility of extra cups of coffee eventually diminishes
5. the total utility of coffee rises as you consume more cups
5. the price of coffee rises as you buy more cups
5. the marginal satisfaction derived from cups of coffee remains constant
5. Q6  If Marginal Product of labor is lesser than Average Product of labour then Average Product of labour is

6.  

7. Constant
5. Decreasing
5. Increasing
5. Maximum

6. Q8  If planned spending exceeds planned output, the result is

    

7. a reduction in GDP
5. unintended inventory increases
5. unintended inventory reductions
5. an increase in government purchases

6.  

   Q9  An isoquant is

    

7. least cost combination
5. a locus of input combinations that give the same level of output
5. a locus of input combinations that give different level of output
5. a locus of product combinations that give the same level of satisfaction

6.  

   Q10For an imperfectly competitive firm:

    

7. the marginal revenue curve will lie below the demand curve because any reduction in price applies only to the extra units sold
5. the marginal revenue curve will lie above the demand curve because any reduction in price applies to all units sold
5. the marginal revenue curve will lie below the demand curve because any reduction in price applies to all units sold
5. total revenue is a straight, upward-sloping line because a firms sales are independent of product price                                                                                  

   Q11  If a pure monopolist is producing a level of output in excess of the MR= MC output,

    

6. it will be in the interest of the firm and society to reduce output
5. it wili be in the interest of the firm and society to increase output
5. it will be in the interest of the firm, but not necessarily of society, to reduce output
5. the firm may or may not be maximizing profits

5.  

   Q13The equilibrium quantity of aggregate output occurs when

    

6. planned aggregate expenditure equals income generated from production
5. the economy reaches the full employment of labor
5. actual aggregate expenditures equal real GDP
5. inventories of goods and services are increasing

5.  

   Q14  In the income-expenditure framework, if planned aggregate expenditures are less than real GDP,

    

6. the price level will increase
5. inventories will increase
5. inventories will decrease
5. consumption will decrease

5.  

   Q15  The demand curve faced by a pure monopolist

    

6. is more elastic than that faced by a single purely competitive firm
5. has the same elasticity as that faced by a single purely competitive firm
5. is less elastic than that faced by a single purely competitive firm
5. may be either more or less elastic than that faced by a single purely competitive firm

5.  

    

   Q17 Following problem will be a part of Macroeconomic analysis

    

6. employment of workers by Tata Motors
7. analytical study of unemployment in India
8. growth of employment in Tata Motors
9. pricing of labourers employed by Tata Motors

5.  

   Q18Thecostofthefactorinputshiredbytheproducertoproducefinal output is called as

    

6. Explicit cost
5. Implicit cost
5. Marginal cost
5. External cost

5.  

   Q19 If total revenue falls, when price falls, the demand of the product will be

    

6. Elastic
5. Unitary elastic
5. Inelastic
5. Perfectly elastic

5.  

   Q21When total utility is maximum Marginal Utility is

6. Falling and positive
5. Falling and negative
5. zero
5. rising

5.  

   Q22 If the money supply increases, the interest rate will         ___and people will want to hold a ___quantity of money.

    

6. fall; greater
5. fall; smaller
5. rise; greater
5. rise; smaller

5. Q23  Demand curve slopes downward due to

6. Income effect
5. Substitution effect
5. Diminishing marginal utility
5. All of the above

5.  

   Q28  Cross elasticity between a battery and a car would-be

    

6. Positive
5. Negative
5. Unitary
5. Zero

5.  

   Q29  Cartel is

    

6. A form of overt collusion
5. A form of tacit collusion
5. Used to explain price rigidity
5. non-collusive oligopoly

5.  

   Q30  If the Indian rupees depreciates in the foreign exchange market, Indian exports will be____ and Indian imports will be _____

    

6. more expensive; more expensive
5. cheaper; cheaper
5. less expensive; more expensive
5. less expensive; less expensive

5.  

    

    

   Q1  The output rises at an increasing rate in the first stage of law of diminishing marginal returns due to

6. Excess plant capacity
7. division and specialization of labour
8. Both a and b
9. None of the above

5.  

   Q2  Contractionary gap can be controlled by

6. Increase in taxation and decrease in public expenditure
7. Increase in taxation and increase in public expenditure
8. Decrease in taxation and decrease in public expenditure
9. Decrease in taxation and increase in public expenditure

5.  

   Q3  Which of the following industry most closely approximates the oligopoly model

6. Automobile
7. Nuclear energy
8. Services of doctors
9. Wheat wholesaler 

5.  

   Q4  gross domestic  product is

6. the sum of money value of all intermediate goods and services produced within the domestic territories of a country during an accountant year
7. the aggregate final goods and services produced during an accounting year
8. the aggregate intermediate goods and services produced during an accounting  year
9. the sum of money value of all final goods and services produced within the domestic territories of a country during an accounting year.

5.  

   Q5  Given the same cost and revenue schedules, a profit-maximising monopolist will produce

6. less output than a competitive industry
7. more output than a competitive industry
8. the same amount of output as a competitive industry
9. output that cannot be determined 

5.  

   Q7  The Law of demand refers to

6. the proposition that price and quantity demanded can be expected to be inversely related showing that consumers will be willing and able to buy more of a good at lower prices that they are at higher prices
7. a shift in the demand curve that occurs when a variable other than the good' s own price changes
8. the amounts of a good that that consumers are willing and able to buy and other relevant variables such as income or the prices of other goods
9. A functional relationship between the various possible prices of a good and the quantity supplied by sellers of it per time period

5.  

   Q8  A firm earns maximum profit when

6. MC=MR
7. MC= ATC
8. Total revenue equals total costs
9. TR is greater than TC by the larger amount

5. Q11. The money spent for MBA course rather than investing back in business by an entrepreneur gives rise to

6. explicit cost
7. historical cost
8. opportunity cost
9. Imputed cost

5. Q12  The current account of balance of payments records

6. Last year’s flows of funds into and out of the country
7. Current flows of imports and exports of goods and services, net income earned by Indian residents from foreign assets, and net transfer payments
8. Current flows of imports and exports of goods only
9. Only net income earned by Indian residents from foreign assets

5.  

   Q14  Which of the following is assumed constant along the aggregate expenditure line?

6. the price levels
7. consumption
8. unintended inventory adjustment
9. actual investment

5.  

   Q15  fixed costs are those costs

6. that are embodied in calculation of marginal cost
7. that are independent to rate of output
8. that are implicit to a competitive firm
9. that are subject to law of variable proportions 

5.  

   Q16  Under perfect competition there are

6. large number of buyers and sellers
7. large number of buyers
8. large number of sellers
9. large number of buyers and sellers and sells are small in size

5.  

   Q18  An increase in the money supply leads to a(n)

6. decline in interest rates, an increase in investment: and an increase in aggregate demand
7. decline in interest rates, a decrease in investment: and an increase in aggregate demand
8. decline in interest rates: an increase in investment: and a decline in aggregate demand
9. increase in interest rates, an increase in investment: and an increase in aggregate demand

5.  

   Q19  The total revenue curve that corresponds to a downward-sloping linear demand curve

6. Slopes downward
7. Slopes upward
8. It is horizontal line
9. First rises, then falls

5. Q20  Prices are measured in India by

6. Consumer Price Index
7. Wholesale Price Index
8. Consumer Price Index and Wholesale Price Index
9. None of these

5.  

   Q22  Macroeconomics does not comprise of

6. Study if unemployment in a country(not sure)
7. Employment of factor inputs by a firm
8. Growth of national income
9. Inflation in a country

5.  

   Q23  Negative cross-elasticity of demand indicates that

6. The product is an inferior good
7. The product is a necessity
8. The product is a luxury
9. The two products are complements

5.  

   Q24  The percentage change in the demand for the film divided by the percentage change in the price of cameras indicates

6. The cross-price elasticity of demand between film and camera
7. The cross-price elasticity of demand for photographs
8. The cross-price elasticity of demand for film
9. The cross-price elasticity of demand cameras

5.  

   Q27  To close a contractionary gap using fiscal policy the government can

6. increase government spending by the size of the gap
7. decrease government spending by the size of the gap
8. increase government spending by less than the size of the gap
9. decrease government spending by more than the size of the gap

5.  

   Q28  Gross domestic product can be calculated by adding------------ in accounting year.

6. Adding Income earned by all factors inputs
7. Expenditure approach
8. Adding output produced by all sectors
9. Any of these methods

5.  

   Q29  If a good is inferior, then the income elasticity of demand for that good is

6. Positive and greater than one
7. Negative
8. Positive and less than one
9. Perfectly elastic

5.  

    

    

   2. An increase in the price of a good normally increases the

   -demand for its substitutes

   -supply of compliments

   -purchasing power of consumer incomes

   -purchasing power of consumer divide incomes

    

    

    

   6. If future price changes were perfectly anticipated by both borrowers and lenders, what would happen to the real interest rate in the future if the price level changed?

    

   -it would increase

   -it would decrease

   -it would not change

   -it would decrease by the amount of the price increase

    

   8. When the first stage of law of variable proportions begins to operate the TVC curve

   -falls at an increasing rate

   -rises at an increasing rate

   -falls at a decreasing rate

   -rises at a decreasing rate

    

   9. In determining comparative advantage, cost is measured in terms of

   -foreign currency

   -opportunities forgone

   -domestic currency

   -gold only

    

   11. If an imperfectly competitive firm is selling its 100^th unit of output for $35, its marginal revenue

   -will be greater than $35

   -will be less than $35

   -will also be $35

   -may be either greater or less than $35

    

   12. The equation for calculation of gross domestic product through expenditure approach is

   -Y=C+I+G+(X-M)

   -Y=C+I+G+(X+M)

   -Y=C+I+G(X-M)

   -Y=C+I+(X-M)

    

   13. Price discrimination refers to

   -the differences between the prices a purely competitive seller and a purely monopolistic seller would charge

   -the selling of a given product at different prices that do not reflect cost differences

   -any price above that which is equal to minimum average total cost

   -selling a given product for different prices at two different points in time

    

   14. As a result of an increased deficit associated with discretionary fiscal policy

   -both the interest rate and real output fall

   -both the interest rate and nominal output rise

   -the interest rate falls and real output rises

   -the interest rate rises and real output falls

    

   15. A consumer maximizes utility when the marginal utilities of all goods

   -having positive money prices that are equal to zero

   -are equal

   -are maximized

   -are exactly proportional to their market prices

    

   16. When prices increases at a such speed that the value of money falls drastically is called as

   -headline inflation

   -core inflation

   -hyperinflation

   -stagflation

    

   17. If the supply of a product increases, then

   -more will be purchased at the same price

   -the price of a product must have declined

   -demand for the good must have increased

   -producers offer less for sale at each possible price

    

   18. The money demand curve describes how the quantity of money demanded varies with

   -nominal GDP

   -the interest rate

   -real GDP

   -the price level

    

   20. Which of the following will not increase when net taxes decrease?

   -saving

   -disposable income

   -consumption

   -government expenditure

    

   21. GDP price index is calculated by the formula

   -Nominal GDP/Real GDP*100

   -Real GDP /nominal GDP*100

   -Nominal GDP/real GDP

   -Real GDP /Nominal GDP

    

   23. The firm is a price taker under

   -perfect competition

   -oligopoly

   -monopolistic competition

   -All of the above

    

   25. Short run cost curves behaviour is explained by

   -laws of returns

   -economies of scale

   -law of variable proportion

   -law of increasing returns

    

   27. For a perfectly competitive firm the average revenue

   -coincides with total revenue

   -is lower than total revenue

   -is equal to marginal revenue

   -is higher than marginal revenue

    

   28. In the long run, a monopolistic competitor

   -incurs losses

   -makes economic profit

   -reaps normal profit

   -any of the above

    

   30. Marginal utility is defined as the

   -average amount of satisfaction gained from consuming a product

   -total amount of satisfaction gained from consuming a product

   -additional satisfaction gained from consuming one more unit of a product

   -total amount of satisfaction gained from consuming a product divided by the number of units consumed.

    

    

   1. A government -imposed price above floor above the market price of milk would increase consumer expenditure on milk only if

    

   -demand is elastic

   -supply is inelastic

   -demand falls

   -demand is inelastic

    

   2. The equilibrium interest rate is determined by

    

   -both the supply of and demand for money

   -demand for money

   -supply of money

   -reserve bank of India

    

    

   6. An arbitrageur in foreign exchange is a person who

    

   -buys foreign currency, hopping to profit by selling it at a higher exchange rate of some later date

   -earns illegal profit by manipulating foreign exchange

   -causes differences in exchange rates in different geographic market

   -simultaneously buys large amount of currency in one market and sells it in another market

    

    

   8. a typical situation when stagnation and inflation coexist is called as an

    

   -Disinflation

   -Hyperinflation

   -Stagflation

   -Headline inflation

    

    

   9. Point of tangency between isoquant and isocost denotes

    

   -producer equilibrium

   -least cost combination

   -optical factor combination

   -all of the above

    

    

   11.When economist say that people act as rational decision makers, that means

    

   -they gather all relevant information before making their purchases

   -once a pattern of behaviour has been established  people tend to become set in their ways

   -people respond in predictable ways to changes in costs and benefits

   -people rarely make errors when they are permitted to make transactions

    

    

   16. In choosing between burger and shirts, consumer increase their purchases of each until

    

   -the marginal utility from the last rupee spent on one is the same as on the another

   -the marginal utility from the last rupee of burger is the same as from the last shirt

   -the total utility from one is the same as from the other

   -none of the above

    

    

   18. A firm is in equilibrium when

    

   -marginal revenue is equal to marginal cost

   -marginal revenue is more than marginal cost

   -marginal cost of the firm is rising

   -both conditions 1 and 2 are fulfilled

    

   19. The law of diminishing marginal utility states that

    

   -the total utility falls continuously additional unit of a product

   -the marginal utility falls continuously with consumption additional unit of a product

   -the average utility falls continuously with consumption additional unit of a product

   -the marginal utility falls continuously with consumption total unit of a product

    

    

   28. Demand pull inflation is due to

    

   -increase in money supply

   -increase in purchasing power

   -increasing in income with the population

   -all of these

    

   30. Total fixed cost includes cost of

    

   -plant and machinery

   -plant and machinery and depreciation cost of plant

   -routine maintenance of plant

   -plant and machinery and routine maintenance of 

    

   SUB-ECOC514

   Q6Under monopolistic

   ANS…

6. Buyers have perfect market information
7. There is absence of cost of transportation
8. Sellers control price through brad loyalty
9. Sellers have absolute control over price of the product

5. Q7The simple spending multiplier is

6. 1/MPC
7. 1/(1-MPC)
8. MPC/(1-MPC)
9. -MPC/(MPC)

5. Q8 A purely competitive firm will be willing to produce at a loss in the short run provided

6. The loss is no greater than its average variable cost
7. The loss is no greater than its marginal costs
8. The loss is no greater than its fixed costs
9. Price exceeds marginal costs

5. Q9Which of the following is the true of the relationship between propensity to consume and the consumption function?

6. The larger the MPC, the higher the level of autonomous consumption
7. The larger the MPC, the steeper the consumption function
8. The larger the MPC, the larger the MPS
9. The smaller the MPC, the steeper the consumption function

5. Q10Utility is

6. Easily measured because all people derive the same utility from consumption
7. Easily measured because it is an objective concept
8. Easily measured because it is a subjective concept
9. Hard to measure because it is a subjective concept

5. Q12Which of the following describes a situation in which demand must be elastic?

6. Total revenue increases by 15 percent when the price of corndogs rises by 15 percent
7. Total revenue increases by less than 15 percent when the price of corndogs rises by 15 percent
8. Total revenue decreases by the more than 15 percent when the price of corndogs rises by 15 percent
9. Total revenue increases by $15 when the price of corndogs rises by $15

5. Q20 fiscal policy  is concerned with

6. Government spending and money only
7. Money and taxation only
8. Government spending and taxation only
9. Government spending. Taxation, and money
10.  

5. Q23Which of the following, other things constant, will shift the money demand curve to the right?

6. An increase in the interest rate
7. A decrease in the interest rate
8. An increase in real GDP
9. An decrease in real GDP

5. Q25 Oligopolistic industries are characterized by

6. A few dominant firms and substantial entry barriers
7. A few dominant firms and low entry barriers
8. Large numbers of firms and low entry barriers
9. Large firms and high entry barriers

5.  

   1. In periods of high inflation,

6. a): people want to hold as much money as possible
7. b): the purchasing power of money is decreasing
8. c): nobody wants to work and earn income
9. d): low nominal interest rates are likely to result

5.  

   13. The crowding in of private investment is associated with

6. increased investment opportunities resulting from a withdrawal of foreign investors
7. increased investment opportunities resulting from a decline in interest rates
8. a reduction in the level of government spending
9. more favorable business expectations resulting from an increase in aggregate demand induced by increased government borrowing

5. 18. A decrease in demand for a good could mean that

6. consumers are willing to pay a higher price for each quantity of the good
7. consumers are willing to buy larger quantities of the good at each price
8. the demand curve has undergone a parallel shift to the right
9. the demand curve has shifted to the left

5.  

   20. A purely competitive firm is in short run equilibrium and its s its AC. It can be concluded that

6. firms will leave the industry in the long run
7. the firm is realizing an economic profit
8. the firm is realizing a loss
9. this is an increasing cost industry

5. 23. Inflation rates differ in metropolitan regions MOSTLY because of

6. defaces in retail prices
7. differences in housing prices
8. transportation cost
9. All of these

5. A ____ exists when there is a gap between a desired state (what managers want) and an existing state (the situation that the managers are facing). (Points : 5) service gap benchmark condition of uncertainty minimum threshold problem

   Ans: Problem

    

   1. In case the producer uses the inputs owned by him in production of final output then the cost incurred by him is called as

6. Explicit cost
7. implicit cost                               
8. opportunity cost
9. Imputed  cost

5. 7. If both demand and supply increase, price will

6. always increase
7. always decrease
8. increase only if supply increases more than demand does
9. increase only if demand increases more than supply does

5. 9. The monopolistically competitive sellers demand curve will tend to become more elastic, the

6. smaller the number of competitors
7. larger the number of competitors
8. greater the degree of product differentiation
9. more significant the barriers to entering the industry

5. 13. The cost that is incurred to retain an input for a firm is called as

6. opportunity cost
7. future cost
8. present explicit cost
9. marginal cost

5. 16. As the interest rate decreases

6. the demand for investment curve shifts to the right
7. the demand for investment curve shifts to the left
8. there is a downward movement along the demand for investment curve
9. there is an upward movement along the demand for investment curve

5. 17. Sales Department of XYZ Pvt. Limited wants to hire an additional salesperson. According to economic analysis his choice would depend on

6. expected economic benefit
7. expected marginal benefit
8. expected marginal cost
9. comparison between expected marginal benefit and expected marginal cost

5. 21. Price elasticity of demand is calculated as

6. the percentage change in quantity demanded divided by the percentage change in price
7. the percentage change in price divided by the percentage change in quantity demanded
8. the absolute change in quantity demanded divided by the absolute change in price
9. the absolute change in price divided by the absolute change in quantity demanded

5. 25. Returns to scale depicts the relationship of an impact on output when there is a change

6. in all inputs simultaneously
7. in all inputs simultaneously and in same proportion
8. in all inputs simultaneously and in different proportion
9. none of the above

5. 26. A budget deficit occurs when

6. there is deflation
7. federal government purchases exceed net taxes
8. there is inflation
9. aggregate demand is greater than aggregate supply

5. 28. An increase in supply will cause equilibrium price to-------- and equilibrium quantity to____.

6. increase; increase
7. increase; decrease
8. decrease; increase
9. decrease;  decrease

5.  

   27. If the Indian Rupee depreciates in the foreign exchange market, Indian exports will be______ and Indian imports will be______ .

6. more expensive; more expensive
7. cheaper; cheaper
8. less expensive; more expensive
9. less expensive; less expensive

5. 28. A manager who wants to introduce flexible work schedules in a company will write which one of the following proposals for management consideration?

   Ans: Internal proposal

    

   29. Before preparing a sales message for a compact disc storage unit person will need concrete answers to questions such as

   Ans:  What will the product do for the receiver?

    

   30; When other things are equal, a decrease in an economy exports will decrease the domestic aggregate expenditure. Which will ultimately result in decrease its equilibrium GDP

    

   31: When addressing issues of high, managers are more aware of the impact their decisions have on others, they are more likely to view the decision as an ethical decision, and they are more likely to worry about doing the right thing.

   Ethical intensity.

    

   32. The higher the anticipated inflation rate

6. the more workers will ask for increase in wages, and the more firms will agree to pay
7. the more workers will ask for increase in wages, and the less firms will agree to pay
8. the less workers will ask for increase in wages, and the less firms will agree to pay
9. the higher the real wage increases offered by firms

5.  

   33. Which of the following would cause an increase in the velocity of money?

6. a decrease in interest rates
7. an increase in the money supply
8. increased use of credit cards
9. an increase in demand for money

5.  

    

   34. Restaurant owners and cable operators face ---------- type of market structure.

6. monopolistic competition
7. homogenous oligopoly
8. heterogenous oligopoly
9. perfect competition

5.  

   35. The exchange rate is

6. an interest rate determined by the interaction of supply and demand
7. the price of foreign exchange determined by the interaction of supply and demand
8. fixed by each government separately
9. always fixed for any two currencies by the two nations involved, regardless of any agreements made with other nations ( not sure)

5. 36. Intersection of the market demand and supply curve of a good determines

6. market clearing price
7. equilibrium quantity
8. equilibrium price
9. all of the above

5. 37. In New Zealand one worker can produce 40 walking sticks or 10 boomerangs each hour. What is the opportunity cost of producing one walking stick?

6. 1/4 of a boomerang
7. 10 boomerangs
8. 40 boomerangs
9. 4 boomerangs

5. 38. For each bow the Romans are producing, they give up the opportunity to make 10 arrows. The Dacians are giving up producing 2 bows for every 40 arrows they are producing. Which of the following is true regarding the production possibilities frontier?

6. With bows on the vertical axis, the Dacians’ production possibilities frontier is steeper than the Romans’
7. The production possibilities frontier for Dacians is identical to the one for Romans
8. With bows on the vertical axis, the Romans’ production possibilities frontier is steeper than the Dacians’
9. With bows on the vertical axis, the Romans’ production possibilities frontier is less steep then the Dacians’

5.