2. Which of the following transactions is included in the current account balance of the Balance of payments statement?
Correct : D. Dividends earned on portfolio investments
3. Personal taxes in India best illustrates a
Correct : B. Progressive tax system
4. In the Union Budget, profits from public sector undertakings are taken under
Correct : A. Revenue receipts
5. Marginal product is………….
Correct : A. Rate at which total production changes with change in variable input
6. Total output is maximum when
Correct : A. MP =0
7. Law of variable proportion applies…………….
Correct : C. Some inputs are fixed and some are variable
8. Law of returns to scale applies when………
Correct : A. All inputs cost are variable
9. Explicit cost refers to
Correct : A. Actual expenses of the firm to purchase or hire input it needed
10. Implicit cost refers to ………………
Correct : D. Value of inputs or services for which no payments were made to outside
11. Which of these costs will increase or decrease with increase in production
Correct : A. Marginal cost
12. If a firms cost of raw material increases then
Correct : C. Marginal cost curve will shift upward
13. If a firms cost of raw material decreases then
Correct : A. Marginal cost curve will shift downward
14. The law of diminishing returns applies in…………….
Correct : A. Short run
15. If total production increases in the short run, the total cost will also……..
Correct : B. Increase due to increase in variable cost
16. Marginal cost is defined as…………………….
Correct : A. Change in total cost due to addition of one unit
17. The positively sloped part of long run cost curve of a firm is due to
Correct : B. Diseconomies of scale
18. The negatively sloped part of long run cost curve of a firm is due to
Correct : A. Increase in production due to specialization and division of labour
19. Which of the following statement is true about average cost function
Correct : D. ATC = AFC + AVC
20. The output and cost pattern of a product are given below Output (q) 0 1 2 3 4 5 Total in `Cost (Tc) 35 42 53 08 75 88 From the above details what is the fixed cost or sunk cost
Correct : A. `25
21. In question No. 123 the marginal cost of producing 2nd unit is
Correct : B. `11
22. In question No. 123 the average fixed cost of producing 3 units is
Correct : C. `10
23. In question No. 123 the average total cost of producing 3 units is
Correct : D. `21
24. In question No.127what is the total output when 2 hours of labour are deployed
Correct : B. 110
25. In question No. 127 what is the marginal output for the 3rd hours of labour
Correct : D. 65
26. In question No. 127 what is the marginal output for the 5th hours of labour
Correct : C. 60
27. In question No. 127 what the average output for 5 hours of labour
Correct : C. 60
28. In question No. 127 the firm remains in the stage of increasing returns to scale up to level of labour hours
Correct : B. 3 labour hours
29. In question No. 127 the firm remains in the stage of constant returns to scale upto level of labour hours
Correct : C. 4 hrs
30. In question No. 127 the firm enter diminishing returns to scale from -----labour hours
Correct : C. 5 hrs
31. In question No. 127 the firm should continue to deploy additional labour hours up to
Correct : D. 6 hrs
32. In question No. 127 the optimum level of output of the firm is
Correct : A. 355 units
33. In question No. 127 if the firm continue to operate beyond 6 labour hours as the labour cannot be
declared surplus –the firms should ------ to increase the output
Correct : A. Increase fixed input
34. When a firm enters the law of diminishing returns to scale
Correct : A. TVC curve begins to fall at an increasing rate
35. Which of these curve never touch X axis
Correct : B. AFC
36. Total cost is the arithmetic sum of
Correct : B. FC and Variable cost
37. Variable cost is also known as
Correct : D. All the three
38. Which of these is not a factor of cost function of a product
Correct : A. Market price of the product
39. In the short run which of the following is fixed
Correct : B. Capital
40. The slope of total variable cost curve equals……………..
Correct : B. MC
41. In the short run, diminishing marginal returns is implied by
Correct : A. Rising MC
42. Total variable cost curve is explained by
Correct : D. All the three
43. TVC curve begins to……….with the onset of diminishing returns
Correct : A. Rise at an Increasing rate
44. TVC curve begins to………with the onset of increasing returns
Correct : B. Rise at an decreasing rate
45. Which of the following cannot be U shaped curve
Correct : A. AFC curve
46. Long run supply curve of a constant cost industry is
Correct : A. Horizontal line at a price that is equal to the long run minimum average cost of production
47. Long run supply curve of a increasing cost industry is
Correct : B. Upward sloping line
48. Long run supply curve of a decreasing cost industry is
Correct : A. Downward sloping curve
49. In economics, in the long run all the cost………….
Correct : B. Are variable
50. In economic theory, in the short run all the cost are……………
Correct : A. Fixed
51. Marginal cost curve is
Correct : A. Positively sloped
52. Marginal cost can be equal to Average variable cost when
Correct : C. Average variable cost is constant
53. The measurement of sensitivity of quantity demand to change in price is calle(d)
Correct : A. Price elasticity
54. Which of the following is not a type of elasticity in economics…………………
Correct : C. Utility elasticity
55. Which of the following is not a method of measurement of price elasticity of demand in economics
Correct : B. Total savings
56. As per total outlay method, demand is said to be elastic if as result of change in price total outlay
Correct : C. Remain same
57. If price of sugar fills leading to fall in total outlay on sugar, the demand of sugar is
Correct : B. Inelastic
58. If price of X falls leading to increase in total outlay on X, the demand of X is
Correct : A. Elastic
59. If price of X falls leading to fall in total outlay on X, the demand of X is
Correct : B. Inelastic
60. If price of coffee falls leading to increase in total outlay on coffee, the demand of coffee is
Correct : A. Elastic
61. If the price of burger rises from `12 per piece to `20 per piece as a result of which the daily sales decreases from 300 to 200 pieces per day. The price elasticity of demand can be estimated as
Correct : A. 0.5
62. If the price of vegetable sandwich rises from `6 per piece to `12 per piece as a result of which the daily sales decreases from 800 to 400 pieces per day. The price elasticity of demand can be estimated as
Correct : A. 0.5
63. A decrease in price will result in an increase in total revenue if
Correct : A. Percentage change in quantity demanded in greater than the percentage change in price
64. An increase in price will result in an increase in total revenue if
Correct : B. Percentage change in quantity demanded is less than the percentage change in price
65. An increase in price will result in no change in total revenue if
Correct : A. Percentage change in price equal the percentage change in price
66. Price elasticity of demand of a product will be more inelastic if
Correct : B. It forms a very small part of consumers household budget
67. Price elasticity demand of product will be more elastic if it
Correct : B. Has number of substitutes
68. If the consumption of a product can be postponed for the time being
Correct : B. The demand for the product will be relatively elastic
69. Bread and butter have………..
Correct : A. Negative cross price elasticity of demand
70. Omlet and cakes have
Correct : B. Positive cross elasticity of demand
71. Point elasticity of demand can be useful in which of the following cases
Correct : C. A health club is considering to lower the monthly membership fee
72. The coefficient of price elasticity of demand is calculated as………..
Correct : B. The percentage change in quantity demand by the percentage change in price
73. Point elasticity concept was propounded by
Correct : A. Marshal
74. Price elasticity of demand is not affected by
Correct : C. Cost of production
75. Demand of salt is inelastic because
Correct : B. No substitute
76. Luxury goods have --- -- degree of elasticity
Correct : A. High
77. The quantity of a commodity which an individual is willing to purchase over a specific period of time is a function of
Correct : D. All the three
78. Which of the following is not a factor is market supply of product
Correct : B. Number of buyers
79. Market demand curve for a commodity is………………
Correct : A. Horizontal summation of the individual demand curve for the commodity
80. Equilibrium state is achieved at …………………
Correct : D. The intersection of demand and supply curve
81. If the cross elasticity between two products is positive then we can say that
Correct : A. The products are perfectly substitute of each other
82. If the price elasticity of a product is greater than 1, we can say that
Correct : A. The products demand is sensitive to price variation
83. If the price elasticity of demand for wine is estimated to be -.6, then a 20% increase in price of wine will
lead to ………………….in quantity demanded of wine at that price
Correct : B. 12% decrease
84. If the price elasticity of demand of Chicken is +.95. then a 20% increase in price of chicken will lead to in quantity demanded of chicken at that price
Correct : A. 19 increase
85. If the cross price elasticity of demand for two product is negative, then the two products are ……………….
Correct : A. Complementary to each other
86. If demand of coffee increases by 10% with 20% decline in the price of sugar we can say that
Correct : A. Cross price elasticity of demand is negative and both the products are complementary to each other
87. If the price of coffee falls by 8% and the demand for Tea declines by 2%. The corss price elasticity of
demand for Tea is
Correct : B. 0.25
88. When the price of complementary products falls, the demand of the other product will
Correct : B. Increases
89. When the price of complementary products increases, the demand of the other product will
Correct : A. Falls
90. Elasticity of supply depends upon
Correct : D. All the three
91. A supply curve passing through the origin will have elasticity
Correct : C. Just One
92. A supply curve passing through any point on X axis(quantity) will have elasticity
Correct : A. Less than 1
93. Supply curve passing through any point on Y axis(Price) will have elasticity
Correct : B. More than 1
94. Goods which are perfect substitute of each other will have rate of substitution
Correct : A. Unity
95. Goods which are perfect substitute of each other will have elasticity of substitution…...
Correct : D. Infinite
96. Goods which are not perfect substitute of each other but have to be consumed in a fixed ratio will have
rate of substitution
Correct : D. Zero
97. If a dealer is prepared to supply 1000 sets of a 29” Color TV if the price is `12,000 per set, however if the
price raises to `15,000 he is prepared to supply 1,500 pieces. The elasticity of supply of TV set is
Correct : B. 2
98. In question No. 201 if at `15,000, the dealer is prepared to supply on 1250 sets of TV the elasticity of
supply is
Correct : A. 1
99. In question No. 201 if at `15,000, the dealer is prepared to supply on 1100 TV sets, the elasticity of supply is
Correct : C. 0.4
100. Tea and Coffee are perfect substitute of each other, given the price of Tea and Coffee being `100 and `200 per Kg. a consumer is prepared to buy 3 Kg. of each. If the price of tea remain same and the price of Coffee rises to `400 per kg. the demand for Tea goes to 6 Kg. and that of Coffee falls to 1Kg. The elasticity of substitution between Tea and Coffee is