MB0042 Managerial Economics Units 1-5

MB0042 Managerial Economics Units 1-5
Unit1 - 1 Mark Quiz Questions

Question 1
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Managerial economics as a new branch of Economics
Choose one answer.
a. Highlights on analyzing business problems
b. Acts totally independent of other subjects
c. Uses new techniques to identify business and management problems
d. Applies economic theories and concepts to solve business and management problems
Make comment or override grade
Incorrect
Marks for this submission: 0/1.
Question 2
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Managerial Economics as a specialized branch of Economics
Choose one answer.
a. Provide ready-made solutions to business problems
b. Provide logic and methodology to find solutions to business problems
c. Provide theoretical background to analyze business problems
d. provide alternative answers to specific business problems.
Incorrect
Question 3
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Managerial Economics is
Choose one answer.
a. A part of tradtional economics
b. A new branch of economics
c. A part of macro economics
d. A theory oriented branch of economics
Incorrect
Question 4
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Managerial economics is
Choose one answer.
a. A positive science
b. A normative science
c. Quantitative science
d. Mainly a normative and a positive science
Incorrect
Question 5
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Managerial econonomics deals with the problem of
Choose one answer.
a. An individual firm
b. An industry
c. An economy
d. Global economy

Question 1
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Decision-making implies
Choose one answer.
a. Selecting the best out of several alternative course of actions
b. Taking a final decision on a particular issue
c. Selecting alternative solutions.
d. Giving judgement on a particular isuue
Incorrect
Question 2
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Forward Planning implies
Choose one answer.
a. A Plan prepared in advace for future
b. A plan prepared in the background of certainties
c. A Plan prepared for past and present
d. A plan to execute current programs
Incorrect
Question 3
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Managerial Economics deals with
Choose one answer.
a. Providing solutions to various business and management problems
b. Providing tools and techniques to find answers for business and management problems
c. Analyzing various business and managerial problems of a firm.

d. Provide alternative solutions to the problems
Incorrect
Question 4
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Managerial Economics helps
Choose one answer.
a. To analyse present problems in the background of past
b. To find solutions for present and future problems on the basis of past and present
environment
c. To find answers only for present problems in the background of past events
d. To optimise abundant resources to maximise profits

Question 1
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Identify correct answer Managerial economics is
Choose one answer.
a. A prescriptive and pragmatic science
b. A descriptive science which highlights on normative aspects of business activities
c. A new discipline and a positive science
d. A highly specialised branch and a part of traditional economics
Incorrect
Question 2
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Identify the incorrect answer? Managerial Economics
Choose one answer.
a. Integrates economic theories with business management decisions and practices
b. Fills up the gap between abstract theory and managerial practice
c. Deals with formulation and understanding of various economic theories and principles
d. Lies mid way between economic theory and business management
Incorrect
Question 3
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Managerial Economics highlights on
Choose one answer.
a. Application of economic models to solve business and management problems.
b. Model building and formulation of various economic theories and principles
c. Application of economic models to analyse business problems
d. Developing new models of thoughts in the background of changing business and
management environment
Incorrect
Question 4
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Managerial Economics is a science that deals with
Choose one answer.
a. Study of only macro economic units without reference to micro units
b. Study of only micro economic units without reference to macro units
c. Study of micro units but analyse the influence of macro economic units
d. Study of both micro economic units and macro economic units

Question 1
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A tabular representation of diiferent quantities of a commodity demanded at different prices are
known as
Choose one answer.
a. Demand series
b. Demand schedule
c. Demand pattern
d. Statistical demand table
Incorrect
Question 2
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An increase in demand
Choose one answer.
a. Means consumers will buy more at a low price
b. Will cause demand curve to shift to the left
c. Will cause quantity demanded to fall
d. Could be caused by an increase in the incomes of cunsumers
Incorrect
Question 3
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Demand for a product refers to
Choose one answer.
a. Total quantity of a product demanded at a particular price in the marketduring a given
period of time
b. Various quantities that are demanded by consumers
c. Various amounts desired by consumers
d. Total quantity of a product demanded during a given period of time
Incorrect
Question 4
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Demand for a product refers to
Choose one answer.
a. Various amounts that are demanded by consumers
b. Total quantity of products demanded during a given period of time
c. Various amounts that are desired by consumers
d. Various amounts which are purchased by consumeres at a particular price during a given
period of time
Incorrect
Question 5
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Demand for a proeuct basically depends on
Choose one answer.
a. Desires of consumers
b. Price of the product
c. Consumers requirements.
d. Utility of product
Incorrect
Question 6
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If we observe the price of a good or service rising then this could have been caused by
Choose one answer.
a. An increase in supply
b. A temporary surplus
c. An increase in demand
d. A small increase in demand followed by a huge increase in supply
Incorrect
Question 7
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In case of decrease in demand,the demand curve
Choose one answer.
a. Slopes negatively
b. Will be a vertical straight line
c. Shifts forward
d. shifts backward
Incorrect
Question 8
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In case of expansion and contraction in demand, the consumer would be moving either in the
upward or downward direction
Choose one answer.
a. On a lower demand curve
b. Along the same demand curve
c. On a higher demand curve
d. On two demand curves
Incorrect
Question 9
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In case of increase in demand the demand curve
Choose one answer.
a. Shifts backwards
b. Will have upward slope
c. Will be horizontal
d. Shifts forward
Incorrect
Question 10
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The demand curve
Choose one answer.
a. Has a negative slope
b. Is a vertical straight line
c. is a horizontal line
d. Has a positive slope
Incorrect
Question 11
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The Law of Demand assuming other things to remain constant, establishes the relationship
between
Choose one answer.
a. Price of a good and the quantity demanded
b. Quantity demanded of a good and the relative prices of its complimentary goods.
c. Price of a good and the demand for its substitute
d. Income of the consumer and the quantity of a good demanded by him
Incorrect
Question 12
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The relationship between price and demand is
Choose one answer.
a. Direct
b. Inverse
c. positive
d. Proportionate
Incorrect
Question 13
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Under exceptional cases, the demand curve slopes
Choose one answer.
a. Backward
b. Upwards
c. Forward
d. Downwards
Incorrect
Question 14
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Which of the assumptions on which the demand is based are
Choose one answer.
a. Technology
b. Production Costs
c. Prices of other related goods and tastes and preferences
d. Prices of Inputs
Incorrect
Question 15
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Which of the following is not a factor which will shift the demand curve for some product
Choose one answer.
a. An increase in the price of the given product
b. An expectation of a future price decline
c. An increase in the price of a substitute good
d. An increase in consumer income

Question 1
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A product can be considered as inferior in economics if increase in disposable income of the
consumer causes
Choose one answer.
a. Decrease in demand
b. Less than proportionate change in demand.
c. No change in demand
d. Increase in demand
Incorrect
Question 2
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Demand Schedule of a firm shows quantities of a commodity
Choose one answer.
a. Purchased at varying prices at different periods of time.
b. Purchased at a price
c. That can be purchased at varying prices
d. Purchased at varying prices at a given period of time
Incorrect
Question 3
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In case of prestige goods, a fall in price lead to
Choose one answer.
a. A small rise in demand
b. Decrease in demand
c. Increase in demand
d. A very high rise in demand
Incorrect
Question 4
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In the long run, consumption habits of people become
Choose one answer.
a. Elastic
b. Perfectly elastic.
c. Inelastic
d. Relatively elastic
Incorrect
Question 5
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Market Demand Schedule shows the
Choose one answer.
a. Total price and demand
b. Total demand of all consumers
c. Sum of all individual demand schedules
d. Aggregate behaviour of the market
Incorrect
Question 6
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Over the years, the demand for textiles in India has grown inspite of rising pricies. It is an
example for
Choose one answer.
a. Law of demand
b. General tendency in rise in price
c. Exceptions to law of demand
d. demand function
Incorrect
Question 7
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The combined effect of change in price on demand for a product is.
Choose one answer.
a. Substitution effect plus demonstration effect.
b. Substitution effect plus income effect
c. Substitution effect plus price effect
d. Substitution effect minus income effect
Incorrect
Question 8
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The quantity of a commodity that an individual is willing to purchase over a specified period of
time is not a function of
Choose one answer.
a. price of factors of production.
b. Price of competitive goods
c. Price of the commodity
d. His disposable income
Incorrect
Question 9
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Two goods X and Y are considered as complementary to each other if
Choose one answer.
a. Increase in price of one leads to increase in the demand of other and vice-versa.
b. Fall in the price of one lead to fall in the demand of the other
c. Increase in price of one leads to decrease in demand of other and vice-versa
d. Increase in price of one leads to increase in the demand of the other one
Incorrect
Question 10
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When demonstration effect operate, consuners would buy more
Choose one answer.
a. At the same price
b. Even at higher price
c. Even at a lower price
d. At different prices.
Incorrect
Question 11
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When the buyer is badly in need of a product, in that case he would buy more
Choose one answer.
a. At higher prices
b. At different prices
c. At the same price
d. At lower prices
Incorrect
Question 12
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When there is an imporvement in quality of a product, there will be change in consumption
habits, in that case the demand curve of consumers would
Choose one answer.
a. Becomes steep
b. Shift backwards
c. Becomes flat
d. Shift forward
Incorrect
Question 13
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When two goods are complementary, a rise in the price of one comodity will induce
Choose one answer.
a. An upward shift in demand for the other commodity
b. A rise in the price of other commodity
c. A downward shift in the demand for the other commodity.
d. No shift in the demand for the other commodity
Incorrect
Question 14
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When utility of a product increases and its usefulness rises, in that case, there will be
Choose one answer.
a. Forward shift in demand curve
b. Becomes horizontal
c. Becomes vertical straight line.
d. Backward shift in demaned curve
Incorrect
Question 15
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X and Y are two products which are considered as close substitutes of each other if
Choose one answer.
a. Increase in the price of one will have no impact on the demand for the other
b. Fall in the price of one lead to fall in the demand of the other.
c. Increase in the price of one leads to decrease in the demand of another and vice-versa.
d. Increase in the price of one leads to increase in the demand for the other and vice-versa.

Question 1
Relatively elastic supply
Relatively inealstic supply
Relatively inelastic demand
Relatively elastic demand
Question 2
Relatively inelsatic demand
Relatively elastic demand
Perfectly inelastic demand
Unitary elastic demand
Question 3
Total expenditure increases with a fall in price and decreases
total expenditure becomes indeterminate when there is very small
total expenditure decreases with a fall in price and increases with a rise in
price
total expenditure remains constant when price either
Question 4
Arc method of price elasticity of demand
Choose one answer.
a. Measures elasticity at different points on a demand curve.
b. Measures elasticity at a point on the demand curve
c. Measures average elasticity over a segment of the demand curve
d. Measures small changes in price and demand
Incorrect
Question 5
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Demand for product X changes on account of changes in prices of related goods, tastes and
preferences of consumers, nature of advertisements and income level of consumers.This is an
example for
Choose one answer.
a. Individual demand schedule
b. market demand schedule
c. Law of demand
d. Demand function.
Incorrect
Question 6
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Demand would become elastic when
Choose one answer.
a. It has multiple use but has susbstitutes
b. Use can be postponed but it absorbs only a very small proportion of budget of consumers
c. It has only one use but has no substitutes

d. Purchase frequency of consumers is low and a consumer is not habituated for the use of a
product
Incorrect
Question 7
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Demand would become inelastic when
Choose one answer.
a. A product is essential but it has substitues
b. A product is demanded with other product but the consumer uses the product in the long
run
c. There is no possibility of postponing the use of a product but the product is repairable
d. A product has no substitutes and consumes a very big proportion of the budget the
consumer
Incorrect
Question 8
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Identify the correct answer.
Choose one answer.
a. When price of veblen goods rises by 5%, demand for that proeduct also go up
b. When price of Giffen goods falls, demand for that product rises
c. When the price of essential products rises, demand for them falls.
d. When the price of comforts rises, demand for them also would go up
Incorrect
Question 9
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Choose one answer.
a. Income elasticity is negative when the product is essential
b. Income elasticity is zero when the product is neutral.
c. Income elasticity is positive when the product is luxury
d. Income elasticity is positive and greater than one when the product is normal
Incorrect
Question 10
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Choose one answer.
a. Cross elasticity is positive when goods are close substitutes
b. Cross elasticity is negative when goods are complemetaries
c. cross elasticity is very high in case of subtitutes
d. Cross elasticity is zero when goods are independent of each other
Incorrect
Question 11
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Identify the correct answer. What will be the nature of consumers reaction in the following cases
Choose one answer.
a. When they expect future rise in price, they would buy smaller quantity at present.
b. When they expect future fall in prices, they would buy larger quantities at present
c. When they expect future scarcity of a product, they would buy smaller quqntity at present
d. When they expect future scarcity, they would buy larger quantities at present
Incorrect
Question 12
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Identify the incrorrect answer.
Choose one answer.
a. Inspite of fall in the quality of a product, consumers would buy more of them
b. Inspite of rise in prices, consumers would buy more during festival seasons
c. Inspite of rise in price of a good, a consumer would buy more of it if he has to arrange the
marriage of his daughter
d. Inspite of rise in the income of consumers, they will not buy more of inferior products.

Incorrect
Question 13
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If the quantity of commodity A demanded increases from 8 units to 12 units as a result of an
increase in the price of commodity B from Rs. 23-00 to 27-00, then the cross elasticity of
demand for A with respect to the price of B is approximately
Choose one answer.
a. 0. 35 and A & B are complements
b. 2.5 and A & B are complements
c. 2.5 and A & B are susbstitutes
d. 0.35 and A & B are substitutes
Incorrect
Question 14
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Mr. Kiran is the owner of an Ice-cream parlour. When he would take a decision to increase the
price of his Ice-cream
Choose one answer.
a. A new brand of Ice-Cream enters in to market but its quality is low when compared to the
Ice-cream sold by Mr. Kiran
b. Demand for other brands of Ice-cream falls.
c. Demand for Ice-Cream rises but unemployment level in the city increases
d. Price of sugar rises but demand for Ice-Cream falls
Incorrect
Question 15
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Point elasticity is =
point elasticity is=

Choose one answer.
a. Lower segment of the demand curve above the point/Upper segment of the demand curve
below the point
b. Lower segment of the demand curve below the point /Upper segment of the demand
curve above the point
c. Upper segment of the demand curve above the point/Lower segment of the demand curve
below the point
d. Upper segment of the demand curve above the point/Lower segment of the demand curve
below the point
Incorrect
Question 16
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Point method measures PED at
Choose one answer.
a. Major changes in quantity demanded
b. One point on the demand curve
c. At different points on the demand curve
d. Major changes in price.
Incorrect
Question 17
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Product X is a popular brand of a commodity used by common man in his day to day life Now
the price of product X falls while the prices of other products remains the same. This would lead
to
Choose one answer.
a. A positive income effect and positive susbtitution effect on X
b. A negative income effect and a negative sustitution effect on X
c. A positive income effect but a negative price effect on X
d. A positive price effect but a negative income effect on X
Incorrect
Question 18
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Substitution elasticity of demand=
Choose one answer.
a. % change in demand ratio of two goods X & Y/% change in price ratio of two goods X &
Y
b. % chnge in price ratio of two goods X & Y/% change in demand ratio of two goods X &
Y
c. % change in quantity demanded of Y/% change in price of X
d. % change in price of X/% change in quantity demanded of Y
Incorrect
Question 19
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The following is the market demand schedule for product X. Out of 4 alternatives identify
Price is Rs A B C Total
20-00 200 300 250 750
15-00 250 400 300 950
10-00 300 500 450 1250
8-00 400 600 500 1500
5-00 600 800 700 2100
Choose one answer.

a. Helps in estmating expected profit percentage of sellers
b. Helps a producer to plan his production schedule.
c. A steady fall in price has no impact on the demand for the product
d. Helps in predicting changes in expected sales
Incorrect
Question 20
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Three of the following four events might reasonably responsible for shifting demand curve for
Tea, to a new position. Point out the one which would not shift demand curve.
Choose one answer.
a. A rise in the price of tea.
b. An increase in the money income of consumers
c. An aggressive sales promotion policy of tea growers
d. A fall in theprice of tea

Question 1
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A firm to formulate its sales policy and sales strategy can make use of
Choose one answer.
a. Sales forecast made by the other firms.
b. Sales forecast made by the industry.
c. Sales forecast made by the govt.
d. Sales forecast made by the statistical organizations.
Incorrect
Question 2
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A good method of demand forecasting should be
Choose one answer.
a. Rigid
b. Flexible
c. Coercive
d. complex
Incorrect
Question 3
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Demand forecasting is generally associated with
Choose one answer.
a. The estimation of the market share.
b. Forecasting sales and manipulating demand.
c. The estimation of the position of the firm in the market.
d. The estimation of competition in the market.
Incorrect
Question 4
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Demand forecasting is made - for the
Choose one answer.
a. For the existing products only.
b. New products only.
c. For both the existing products & for the new products.
d. For the substitutes only
Incorrect
Question 5
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Demand forecasting is made in terms of
Choose one answer.
a. Actual amount.
b. Approximate amount
c. The quantity that can be produced.
d. Specific quantities.
Incorrect
Question 6
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Demand forecasting refers to an estimation of
Choose one answer.
a. Most likely future demand for a product.
b. Precise demand for a product at a future date.
c. Future demand for the product.
d. Trends in the market.
Incorrect
Question 7
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Generally companies plan their business in anticipation of
Choose one answer.
a. Making huge profits.
b. Eliminating competition.
c. future demand.
d. future growth in the market.
Incorrect
Question 8
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Internal factors like money spent on advertising, pricing policy, product improvement, sales
efforts etc., help in
Choose one answer.
a. Forecasting sales
b. Manipulating demand
c. Fixing price of the product
d. Determining the size of the market
Incorrect
Question 9
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Some of the external factors which influence sales forecasts of a firm are
Choose one answer.
a. Money spent on advertisement.
b. Pricing policy.
c. Product improvement and sales efforts.
d. Size of the market, competitors attitude, movement in prices. etc.,
Incorrect
Question 10
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The heart of the survey method is
Choose one answer.
a. Opinion of the sales representatives
b. Direct interview
c. Questionnaire
d. Consumer panel.

Question 1
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A firm can make use of the sales forecasts made by the industry.
Choose one answer.
a. As a powerful tool for formulating its profit policy.
b. As a powerful tool for formulating its price policy.
c. As a powerful tool for formulating its inventory policy.
d. As a powerful tool for formulating its sales policy & sales strategy.
Incorrect
Question 2
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Demand forecasting helps in determining the level of output at various periods and avoiding.
Choose one answer.
a. Under or over production.
b. Unnecessary competition.
c. Cost escalation.
d. Risks in production.
Incorrect
Question 3
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Demand forecasting is undertaken at.
Choose one answer.
a. Firm level only.
b. Industry level only.
c. Firm level, industry level and macro level.
d. Macro level only.
Incorrect
Question 4
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Demand forecasting reduces production uncertainties and helps in.
Choose one answer.
a. Promoting the sales.
b. Achieving the set goals.
c. Stabilizing the activities of the firm.
d. Reducing the cost of production.
Incorrect
Question 5
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Demand forecasts of particular products become the basis for.
Choose one answer.
a. Demand forecasting of the entire industry.
b. The evaluation of the progress of the firm.
c. The formulation of the tax policy.
d. Demand forecasting of other related industries.
Question 1
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A tabular representation of different quantities of a commodity supplied at varying prices is
called
Choose one answer.
a. Supply table.
b. Supply schedule
c. Supply series.
d. Supply pattern..
Incorrect
Question 2
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For perishable commodities like fish and fruits
Choose one answer.
a. Supply is less than production.
b. Supply and stock are the same.
c. Supply and stock are different.
d. Supply is more than production.
Incorrect
Question 3
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Supply of a product basically depends on
Choose one answer.
a. Cost of production and the management decision.
b. Consumers desires.
c. Consumers requirements.
d. The availability of other goods in the market.
Incorrect
Question 4
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The assumptions on which the law of supply is based are
Choose one answer.
a. The prices of other commodities, incomes of the people etc.,
b. Tastes and preferences of the people.
c. Availability of substitutes, development of new products.
d. Number of firms, availability of inputs, cost of production, techniques of production etc.,

Incorrect
Question 5
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The supply curve
Choose one answer.
a. Is a vertical straight line.
b. Is a horizontal straight line.
c. Has a positive slope.
d. Is negatively sloping.
Incorrect
Question 6
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The supply of a product refers to the
Choose one answer.
a. Various amounts which are produced by a firm.
b. Various amounts available with the firm.
c. Various amounts which are offered for a sale at a particular price during a given period of
time.
d. Total quantity of the product produced during a given period of time.
Incorrect
Question 7
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The total volume of a commodity which can be brought into the market for sale at a short notice
is called
Choose one answer.
a. Supply.
b. Volume of production.
c. Available supply.
d. Potential supply.
Incorrect
Question 8
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The two concepts which link the market behaviour of consumers, producers & sellers with that
of price are
Choose one answer.
a. Desire & ability.
b. Demand & supply.
c. The technique & the cost.
d. Utility & usefulness.

Question 1
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A firm would like to supply goods at a price which is
Choose one answer.
a. Equal to cost of production.
b. Less than the cost of production
c. More than the cost of production
d. Considered as a reserve price
Incorrect
Question 2
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Market supply schedule shows the
Choose one answer.
a. Total amount produced by the industry.
b. Sum of all individual supply schedules.
c. Total stock & total supply.
d. Aggregate behaviour of the market.
Incorrect
Question 3
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Supply schedule of a firm shows quantities of a commodity
Choose one answer.
a. Offered for sale at varying prices.
b. Produced at varying prices.
c. Planned at varying prices.
d. That can be delivered at varying prices.
Incorrect
Question 4
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The management will have to decide upon the quantity to be supplied and the quantity to be held
back based upon
Choose one answer.
a. Position of the firm.
b. Price.
c. Needs of the consumer.
d. Policy of the firm.
Incorrect
Question 5
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The market supply schedule helps a firm to formulate its
Choose one answer.
a. Production policy.
b. Sales policy. 1
c. Investment policy.
d. Management policy.

Question 1
Rise in price leads to fall in demand and a fall in price
leads a rise in demand
Rise in price leads to a rise in demand and a fall in price
leads to a fall in demand
Rise in price leads to a rise in supply and a fall in price
leads to a fall in supply
Fall in price leads to a rise in supply and a rise in price
leads to a fall in supply
Question 2
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The law of supply is not in operation when the supply curve
Choose one answer.
a. Slopes backward
b. Slopes forward
c. Assumes a negative shape
d. Is a vertical straight line.
Incorrect
Question 3
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When a rise in price causes a rise in supply and a fall in price causes a fall in supply it is a case
of
Choose one answer.
a. Extension or contraction of supply
b. Increase or decrease of supply
c. Rise or fall in supply
d. Exception to the law of supply
Incorrect
Question 4
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When more is supplied at the same price or same quantity is supplied at a lower price it is case of
Choose one answer.
a. Decrease in supply
b. Fall in supply
c. Increase in supply
d. Extension of supply
Incorrect
Question 5
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When supply rises with a rise in price and falls with a fall in price what will be the shape of the
supply curve
Choose one answer.
a. Negative slope
b. Positive slope
c. Vertical shape
d. Horizontal shape
Question 1
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A stage of decreasing returns imply
Choose one answer.
a. AP is negative
b. MP is negative
c. MP is decreasing
d. both a and b
Incorrect
Question 2
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Diminishing marginal return implies
Choose one answer.
a. Decreasing average variable costs
b. Decreasing average fixed costs
c. Decreasing marginal costs
d. Increasing marginal costs
Incorrect
Question 3
Marks: 0/1
Diminishing return operate in the 2nd stage of the law of variable preportions when greater
quantity of variable input is employed except in one of the case. Identify the correct answer
Choose one answer.
a. Intensive and effective utilisation of fixed factor inputs
b. complete utilisation of indivisible factor
c. There is a limit for intensive and effective utilisation of fixed factor inputs
d. Greater scope for economies of scale
Incorrect
Question 4
Marks: 0/1
Fixed inputs are those factors
Choose one answer.
a. The Qty of which does not remain constant with the level of output
b. The Qty of which remains constant irrespective of the level of output
c. The Qty of which remains neutral with the level of output
d. The Qty of which varies with the level of output
Incorrect
Question 5
Marks: 0/1
Identify the correct answer, short run is a period of time where in
Choose one answer.
a. Fixed factors can be varied while variable factors remain constant
b. Variable factors can be varied while fixed factors remain constant
c. Variable factors as well as fixed factors vary
d. Fixed as well as variable factors remain constant
Incorrect
Question 6
Marks: 0/1
Identify the incorrect answer, long run is a period of time where in
Choose one answer.
a. Adequate time is available to make all kinds of changes
b. Plant capacity can be changed
c. The distinction between fixed and variable inputs remains the same
d. Adequate time is availablity for entry or exit of firms
Incorrect
Question 7
Marks: 0/1
If the marginal product of labor is below the AP of labor it must be true that
Choose one answer.
a. The MP of labor is negative
b. The MP of lobor is zero
c. The AP of labor is falling
d. The AP of labor is negative
Incorrect
Question 8
Marks: 0/1
In case of long run production
Choose one answer.
a. The Qty of both fixed and variable inputs are changed
b. The Qty of both fixed and variable inputs are kept constant
c. The Qty of both fixed and variable inputs are changed in the same proportions
d. The Qty of both fixed and variable inputs are changed in different proportions
Incorrect
Question 9
Marks: 0/1
Incase of short run production function Qty of fixed input remains constant and
Choose one answer.
a. Qty of either one or two variable inputs change
b. Qty of one or two variable inputs are kept constant as Qty of fixed inputs change
c. The Qty of both fixed as well as variable inputs remains constant
d. The Qty of both variable and fixed input change
Incorrect
Question 10
Marks: 0/1
Increasing return operate in the 1st phase of the law of variable proportions when greater
quantity of variable input is employed except in one of the case Identify the correct answer.
Choose one answer.
a. Complete utilisation of indivisible factors.
b. Perfect substitution of factor inputs
c. Limit for division of labor
d. Limit for intensive and effective utilisation of fixed factor inputs
Incorrect
Question 11
Marks: 0/1
Increasing returns imply
Choose one answer.
a. Optimum use of capital and labor
b. Diminishing cost per unit of output
c. Increasing cost per unit of output
d. Constant average cost
Incorrect
Question 12
Marks: 0/1
Marginal product is maximum at a point of
Choose one answer.
a. Focul point
b. Turning point
c. Inflection point
d. Equilibrium point
Incorrect
Question 13
Marks: 0/1
Negative return operate in the 3rd phase of the law of variable proportion when greater quantity
of variable input is employed except due to one of the following reasons Identify the incorrect
answer.
Choose one answer.
a. The proportion of fixed factors is in excess of variable factors
b. The proportion of variable factors is in excess of fixed factors
c. The proportion of both are in excess
d. The proportion of both are scare
Incorrect
Question 14
Marks: 0/1
Out of the 4 which one of the following production function is the best one ?When an old
production function is replaced by a new one
Choose one answer.
a. The Qty of inputs reduced while the Qty of output remains the same
b. The Qty of output increase while the Qty of input remain the same
c. The Quantity of both inputs and output increase with same proportion.
d. The Qty of output increase while the Qty of input decrease
Incorrect
Question 15
Marks: 0/1
Out of the four which of the following statement is incorrect ? When a producer increases the
Qty of variable input while keeping fixed factors constant
Choose one answer.
a. Marginal product increases in the beginning
b. Marginal product become constant in the middle
c. Marginal product reaches the highest point
d. Marginal proiduct diminishes at the end
Incorrect
Question 16
Marks: 0/1
Out of the four which one of the following is not a practical use of production function
Choose one answer.
a. It is used to work out least output in put combination for a given cost or maximum cost
input combination for for a given output
b. It is used to work out least cost input combination for a given output or maximum output-
input combination for a given cost.
c. It is used to workout an optimum combination of inputs for getting a certain level of
output
d. It is used to take long run decisions regarding when output is to be increased, decreased
and kept constant
Incorrect
Question 17
Marks: 0/1
Out of the four which one of the following statement is incorrect to describe the law of variable
proportions according to Benham
Choose one answer.
a. As the proportion of one factor in a combination of factors is increased, after a point first
the marginal, then the average product of that factor will dimimish
b. As the proportion of one factor in a combination of factors is increased, after a point first
the average and then the marginal product of that factor will diminish
c. First the total product and then the average product of that factor will diminish
d. The first marginal and then the total product of that factor will diminish
Incorrect
Question 18
Marks: 0/1
Out of the four, which of the following statement is incorrect
Choose one answer.
a. Total output goes on increasing as long as marginal product is positive
b. Total output is the highest when marginal product is zero
c. Total output is the highest when marginal product is positive
d. Total output diminishes when marginal product becomes negative
Incorrect
Question 19
Marks: 0/1
Production function explains
Choose one answer.
a. The relationship between Qty of inputs employed and the corresponding total production
cost
b. The relationship between the firms total revenue and total production cost
c. The relationship between qty of inputs used and the corresponding output obtained
d. The relationship between market price charged and quantity supplied
Incorrect
Question 20
Marks: 0/1
Production function with one variable input is not called as
Choose one answer.
a. Law of variable proportions
b. Law of diminishing returns
c. The law of returns to scale
d. The law of non-proportional output
Incorrect
Question 21
Marks: 0/1
The Average product of labor is maximum when MP of labor
Choose one answer.
a. Equals the AP of labor
b. Equals zero
c. Is maximised
d. none of the above
Incorrect
Question 22
Marks: 0/1
The identify the wrong answer. The term production in economics implies
Choose one answer.
a. Creation of utilities
b. Conversion of inputs into outputs
c. creation of new or additional utilities
d. activity directed for satisfaction of want
Incorrect
Question 23
Marks: 0/1
The marginal product of a variable input is best describe as
Choose one answer.
a. The ratio of the amount of the variable input that is being used to the amount of the fixed
input that is being used
b. The addition output resulting from a one unit increase in the variable input
c. The addition output resulting from a one unit increase in both the variable and fixed
inputs
d. Total product divided by the number of units of variable input
Incorrect
Question 24
Marks: 0/1
The production function is a relationship between a given combination of input and
Choose one answer.
a. Another combination that yield the same output
b. The higher resulting output
c. The increase in output generated by one unit increase in one output
d. All level of output that can be generated by those inputs
Incorrect
Question 25
Marks: 0/1
Total output will be the maximum when
Choose one answer.
a. Average output is highest
b. Marginal output is zero
c. Marginal output is highest
d. Average output is lowest
Incorrect
Question 26
Marks: 0/1
Variables inputs are those factors
Choose one answer.
a. The Qty of which varies with variations in the level of output
b. The Qty of which does not vary with the level of output
c. The Qty of which remains constant with variation in the level of output
d. The Qty of which remains neutral with variations in the level of output
Incorrect
Question 27
Marks: 0/1
Which of the following is not an economic activity
Choose one answer.
a. A chartered accountant doing his own activity
b. A teacher teaching in a college
c. A son looking after his ailing mother
d. A manager managing his organisation
Incorrect
Question 28
Marks: 0/1
Which of the following is not considered as production in economics
Choose one answer.
a. A worker working in HAL
b. A BSF jawan guarding boarder with pakistan
c. A student playing for his college foot ball team
d. A farmer tilling his land
Incorrect
Question 29
Marks: 0/1
Which of the following statements is true
Choose one answer.
a. Man can create matter
b. The services of a housewife are considered production
c. The service of a doctore are considered production
d. When a man creater a table, he creates matter
Incorrect
Question 30
Marks: 0/1
Which one of the assumption of the law of variable proportion is incorrect
Choose one answer.
a. Only one variable input is to varied
b. Production technology remains constant
c. Different units of a variable factor input are homogeneous
d. The law operates the long run

Question 1
Marks: 0/1
A rational producer will operate in the ____ stage of law of variable proportions
Choose one answer.
a. 1st
b. 2nd
c. 3rd
d. Any of these
Incorrect
Question 2
Marks: 0/1
A stage of decreasing return implies
Choose one answer.
a. AP is negative
b. MP is negative
c. MP is decreasing
d. Both a and b
Incorrect
Question 3
Marks: 0/1
At the point of inflexion, the marginal product is
Choose one answer.
a. Decreasing
b. Increasing
c. Maximum
d. minimum
Incorrect
Question 4
Marks: 0/1
Diminishing returns occur
Choose one answer.
a. When the qty of the fixed input is increased and return to the variable input falls
b. when the size of the plant is increased in the long run
c. when units of a variable input are added to a fixed input and marginal product falls
d. when units of a variable input are added to a fixed input and total product falls.
Incorrect
Question 5
Marks: 0/1
If a production function is homogenous of degree one it implies that
Choose one answer.
a. There is decreasing return to scale
b. There is Increasing return to scale
c. There is constant return to scale
d. None of these
Incorrect
Question 6
Marks: 0/1
In the long run
Choose one answer.
a. All factors become fixed
b. All factors become redundant
c. All factors become variable
d. All factors become inelastic
Incorrect
Question 7
Marks: 0/1
In the production of wheat all of the following are variable factors that are used by the farmer
except
Choose one answer.
a. The seed and fertilizer used when the crop is planted
b. The tractor used by the farmer in planting and cultivating not only wheat but also rice
c. The field that has been cleared of trees and in which the crop is planted
d. The number of hours that the farmer spends in cultivating the wheat fields
Incorrect
Question 8
Marks: 0/1
Increasing return inplies
Choose one answer.
a. Increasing cost
b. Decreasing cost
c. Constant cost
d. Maximum cost
Incorrect
Question 9
Marks: 0/1
Iso-quant curve cannot be a straight line as it would imply the operation of
Choose one answer.
a. increasing M.R.TS
b. constant MRTS
c. Increasing returns to scale
d. diminishing
Incorrect
Question 10
Marks: 0/1
Iso-quant curve is convex to the origin due to ______
Choose one answer.
a. D.M.R.T S
b. I.M.R.TS
c. Constant returns to scale
d. Increasing returns to scale
Incorrect
Question 11
Marks: 0/1
Larger production of goods would lead to higher production in future
Choose one answer.
a. consumer goods
b. public goods
c. capital goods
d. agricultural goods
Incorrect
Question 12
Marks: 0/1
Marginal product curve is above the A.P.C when the AP is
Choose one answer.
a. Decreasing
b. Increasing
c. c. Constant
d. Zero
Incorrect
Question 13
Marks: 0/1
Production and productivity is one and the same
Choose one answer.
a. I agree
b. I do not agree
c. May be
d. May not be
Incorrect
Question 14
Marks: 0/1
Production economics is
Choose one answer.
a. A branch of macro economics
b. A branch of micro economics
c. A branch of pure economics
d. A management Jargon
Incorrect
Question 15
Marks: 0/1
Production function refers to
Choose one answer.
a. Relationship between output and cost
b. Relationship between input and output
c. Relationship between physical input and output
d. Relationship between cost and output
Incorrect
Question 16
Marks: 0/1
Returns to factors is the other name of
Choose one answer.
a. Law of Returns to scale
b. Law of variable proportions
c. Return to fixed proportion
d. None
Incorrect
Question 17
Marks: 0/1
The law of diminishing returns
Choose one answer.
a. States that beyond some level of a variable input, the average product of that variable
input begins to increase steadily
b. Assumes that there is technological improvement over time
c. states that beyond some level of a variable input, the marginal product of that variable
begins to decrease steadily
d. Informs a producer whether or not to use a factor input
Incorrect
Question 18
Marks: 0/1
The law of variable proportions come into operation when
Choose one answer.
a. There are only two variable factors
b. There is a fixed factor and a variable factor
c. All factors are variable
d. Variable factors yield less result
Incorrect
Question 19
Marks: 0/1
The slope of the total production curve measures
Choose one answer.
a. Average production
b. Marginal production
c. Maximium production
d. Minimum production
Incorrect
Question 20
Marks: 0/1
Which of the following is considered as production in Economics ?
Choose one answer.
a. Singing a song before friends
b. Painting a picture for pleasure
c. A doctor treating his own wife
d. A farmer tilling of soil
Question 2
Marks: 0/1
A firm encounters its shut down point when
Choose one answer.
a. Average total cost equals price at the profit maximising level of output
b. Average variable cost equals price at profit maximumising level of output
c. AFC equals price at profit maximumising level of output
d. MC equals price at profit maximising level of output
Incorrect
Question 3
Marks: 0/1
If one unit of labor and one unit of capital give 200 units of output, two units of labor and 2 units
of capital give 400 units of output 5 units of labor and 5 units capital of lap give 1000 units of
output ,then it will be a case of
Choose one answer.
a. Increasing returns to scale
b. Constant returns to scale
c. Dimining returns to scale
d. constant returns
Incorrect
Question 4
Marks: 0/1
Hours of Labour Total output in units Marginal product in units
0 0 0
1 100 100
2 80
3 240 -
What is the total output when 2 hrs of labor are employed?

Choose one answer.
a. 80
b. 100
c. 180
d. 200
Incorrect
Question 5
Marks: 0/1
0 0 0
1 100 100
2 80
3 240 -
What is the marginal product of the third Hrs of labor?
Choose one answer.
a. 60
b. 80
c. 100
d. 240
Incorrect
Question 6
Marks: 0/1

0 0 0
1 100 100
2 80
3 240 -
What is the average product of first hr of labor?
Choose one answer.
a. 100
b. 80
c. 60
d. 240
Incorrect
Question 7
Marks: 0/1
Hours of Labour Total Output in units Marginal product in units
0 0 0
1 100 100
2 80
3 240 -
What is the average product of the first 3 hrs of labor?
Choose one answer.
a. 60
b. 80
c. 100
d. 240
Incorrect
Question 8
Marks: 0/1
Combination Factor X Factor Y

A 15 1
B 11 2
C 8 3
D 6 4
E 5 5
The MRTS X for Y for the C combination is?
Choose one answer.

a. 4
b. 3
c. 2
d. 1
Incorrect
Question 9
Marks: 0/1

A 15 1
B 11 2
C 8 3
D 6 4
E 5 5
The MRTS of X for Y for the D combination is?
Choose one answer.
a. 4
b. 3
c. 2
d. 1
Incorrect
Question 10
Marks: 0/1
Combination Factory X Factor Y
A 15 1
B 11 2
C 8 3
D 6 4
E 5 5
The MRTS of X for Y for the B combination is ?
Choose one answer.

a. 4
b. 3
c. 2
d. 1
Incorrect
Question 11
Marks: 0/1

A 15 1
B 11 2
C 8 3
D 6 4
E 5 5
The MRTS of X for Y for the E combination is?
Choose one answer.
a. 11
b. 3
c. 2
d. 1
Incorrect
Question 12
Marks: 0/1
The II phase of the law of variable proportion is described as the most economic region because
of the following reasons except
Choose one answer.
a. The producer is employing the most ideal factor combinations.
b. Total output is highest when marginal product zero
c. Total output is highest even before the marginal product is zero
d. Represents the range of rational production decision
Incorrect
Question 13
Marks: 0/1
The law of diminishing returns applies to
Choose one answer.
a. The short run,but not the long run
b. The long run, but not the short run
c. Both the short run and the long run
d. Neither the short run nor long run.
Incorrect
Question 14
Marks: 0/1
The main difference between the short run and long for economists is that
Choose one answer.
a. In the short run,atleast one of the firms input level is fixed
b. In the short run the firm varies all of its inputs to find the least cost combination of inputs
c. In the short run all inputs are fixed while in the long run all inputs are variable
d. In the long run, the firm is making a constrained decision about how to use existing plant
and equipment efficiently
Incorrect
Question 15
Marks: 0/1
The marginal, average and total product curves encountered by the producer producing in the
short run exhibit all the following relationship except
Choose one answer.
a. when total product is rising average and marginal products may be either rising or falling
b. When marginal product is negative, total is negative total and average products are
falling
c. When average product is at a maximum, marginal product equals average product and
total product is rising
d. When marginal product is at a maximum average equals marginal product and total
product is rising
Incorrect
Question 16
Marks: 0/1
The short run, as economists use the phrase is characterised by
Choose one answer.
a. Atleast one fixed input and firms neither leaving nor entering the industry
b. A period where the law of diminishing returns this does not hold good
c. All factor inputs are fixed
d. All factor inputs are variable

MB0042 Managerial Economics Units 1-5

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MB0042 Managerial Economics Units 1-5

Unit1 - 1 Mark Quiz Questions

Unit1 - 2 Mark Quiz Questions

c. Analyzing various business and managerial problems of a firm.

Unit1 - 4 Mark Quiz Questions

Unit2 - 1 Mark Quiz Questions

Unit2 - 2 Mark Quiz Questions

Unit2 - 4 Mark Quiz Questions

c. It has only one use but has no substitutes

Make comment or override grade

point elasticity is=

Choose one answer.

Unit3 - 1 Mark Quiz Questions

Unit3 - 2 Mark Quiz Questions

Make comment or override grade

Unit4 - 2 Mark Quiz Questions

Unit4 - 4 Mark Quiz Questions

Unit5 - 2 Mark Quiz Questions

What is the total output when 2 hrs of labor are employed?

Hours of Labour Total output in units Marginal product in units

Combination Factor X Factor Y

The MRTS X for Y for the C combination is?

Choose one answer.

Combination Factor X Factor Y

Choose one answer.

Combination Factor X Factor Y

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