Pakistan & SAARC

uestion: 921 Moving along the budget line leaves the consumer
A. better off
B. worse off.
C. neither better nor worse off.
D. either better or worse off but one cannot tell which without more information.
E. in equilibrium.
Question: 931 Moving along an indifference curve leaves the consumer
A. better of
B. worse off
C. neither better nor worse off
D. either better or worse off but one cannot tell which without more information
E. in equilibrium
Question: 1027 At every level of consumption, the marginal rate of substitution tells
A. which indifference curve the consumer is on.

B. how much of one good the consumer can exchange for another in the market.
C. what the price of the goods are.
D. how much the consumer wants to buy of each goods.
E. how much of one goods the consumer is willing sacrifice to obtain one of the other.
Question: 1028 An increase in the consumers income causes
A. the budget line to get steeper.

B. the budget line to shift parallel to the right.
C. the indifference curves to shift up.
D. the budget line to get flatter.
E. the indifference curves to get flatter.
Question: 1029 An increase in the price of the good measured on the horizontal axis causes
A. the budget line to get steeper.

B. the budget line to shift parallel to the right.
C. the indifference curves to shift up.
D. the budget line to get flatter.
E. the indifference curves to get flatter.
Question: 1033 In equilibrium the consumer is not
A. on the highest indifference curve attainable with his income.

B. achieving his existing level of utility at the cheapest possible cost.
C. spending all of his income.
D. maximizing his utility given his income.
E. on his highest indifference curve.
Question: 1034 indifference curves reflect
A. preferences.
B. income.
C. prices.
D. both income and prices.
E. consumption.
Question: 1037 If a households income is $900, the price of compact discs (on the vertical
axis)is $15, and the price of cassette tapes (on the horizontal axis)is $10, then the budget line
intersects the vertical axis at a value of
A. 900.
B. 15.
C. 60.
D. 00.
E. an indeterminate magnitude based on the data given.
Question: 1087 For which of the following would households’ preferences be most stable
over time?
A. Hamburgers
B. Big mace
C. Beef
D. Meat
E. food
Question: 1090 For which of the following would households’ preferences be most stable
over time?
A. Hamburgers.
B. Big mace.
C. Beef
D. Meat.
E. food
Question: 1092 The law of diminishing marginal utility implies that the marginal utility of a
good decreases as
A. A household consumes more of it

B. It gets more expensive
C. A household’s income goes up
D. Preferences change
E. Preferences change
Answers to the questions of Economics on this page

Following list gives the correct choice for the answer of the Economics mcqs.
921 . D 931 . C 1027 . E 1028 . B 1029 . A 1033 . E 1034 . A 1037
.C 1087 . E 1090 . E 1092 . A
Question: 1094 Which of the following would be least likely to cause a consumer to eat less
beef?
A. An increase in the price of beef

B. An increase in the price of lamb
C. A reduction in the consumers’ income
D. A reduced preference for beef
E. A reduced preference for beef
Question: 1096 Diamonds are more expensive than water because
A. They yield higher total utility

B. They yield higher marginal utility
C. They are more useful
D. Markets do not always reflect value
E. Households are irrational
Question: 1097 If two goods have the same marginal utility for a consumer who is
maximizing utility, then
A. She will consume only one of them

B. She will consume equal quantities of them
C. She will be willing to pay the same price for each of them
D. The total utility gained from each of them is equal
E. The total utility gained from each of them is equal
Question: 1098 The total utility gained from each of them is equal.
A. Changes in preferences
B. Changes in income
C. Changes in the prices of small versus large cars
D. Changes in the prices of small versus large cars
E. Changes in the prices of small versus large cars
Question: 1099 If the marginal utility of nutmeg to a consumer exceeds that of ginger, then
the consumer
A. Is not in consumer equilibrium

B. Will not buy any ginger
C. Will buy some ginger but less than he buys of nutmeg
D. Is willing to pay more for nutmeg than for ginger
E. Will not buy any nutmeg
Question: 1101 The amount of income left over for a consumer in equilibrium is
A. Her consumer surplus

B. Zero
C. Allocated to all goods evenly
D. Excess demand
E. Allocated to the goods with higher marginal utility
Question: 1103 Allocated to the goods with higher marginal utility.
A. 10
B. 6
C. 16
D. 26
E. Impossible to determine from table 1
Question: 1105 If fish cost $3each. Then the marginal utility per dollar of the third fish
consumed by the Catt family in table 1is
A. 2
B. 4
C. 6
D. 15.3
E. Impossible to determine from table 1
Question: 1106 If fish and milk cost$3 and $2 respectively and the income of the Catt family
in table1 increases to$15 ten it should consume
A. 1fish and 6 gallons of milk

B. 5 fish and no milk
C. 2 fish and 4 gallons of milk
D. 3 fish and 3 gallons of milk
E. An amount that cannot be determined from table1
Question: 1107 With the income of the Catt family in table 1 held constant at$15 and the
price of fish at $3, suppose that the price of milk rises to $3 per gallon. The combination of
milk and fish that maximizes utility is now
A. 3 fish and 2 gallon of milk
B. 2 fish and 3gallon of milk
C. 1 fish and 4 gallon of milk
D.
E.
1090 . E 1092 . A 1094 . B 1096 . B 1097 . A 1098 . D 1099 . D 1101
.B 1103 . B 1105 . A 1106 . D 1107 . A
Question: 1110 The total benefit enjoyed by consumers in figure 4 from consuming 50
watermelons is the area abc ($250).
A. The area abc ($250).

B. The area b0gc ($500)
C. The area a0gc ($750)
D. The distance 0a ($20)
E. The distance 0b ($10)
Question: 1112 The total cost to consumers in figure 4of eating 50 watermelons is
A. The area abc ($250)

C. The area b0gc ($500)
D. The area b0gc ($500)
E. The distance 0b ($ 10)
Question: 1113 The consumer surplus of all consumers in figure 4 from 50 watermelons is.

C. The area b0gc ($500)
Question: 1115 The value of the 50th watermelon to consumers in figure 4 is

C. The area aogc ($750)
Question: 1116 Which of the following is not a direct result of the law of diminishing
marginal utility?
A. Season tickets often cost less per event than single tickets
B. Stores often offer buy one get one free rather than half price sales
C. Many companies offer volume discounts
D. Few people eat five or more hamburgers in the same day.
E.
Question: 1119 When the price of a good rises, the income effect is most likely to
A. Increase consumption of the good and other similar goods

B. Decrease consumption of the good and other similar goods
C. Decrease consumption of the good and not change consumption of other similar goods
D. Decrease consumption of t he good and increase consumption of other similar goods.
E. Not change consumption of any goods.
Question: 1120 When the price of good rises, the substitution effect is most likely to
A. Increase consumption of the good and other similar goods

B. Decease consumption of the good and other similar goods
C. Decrease consumption of the goods and not change consumption of other similar goods.
D. Decrease consumption of the goods and not change consumption of other similar goods.
E. Not change consumption of any goods.
Question: 1122 For which of the following goods would an increase in price lead to the
largest income effect on quantity demanded?
A. Housing
B. Soft drinks
C. Refrigerators
D. Gasoline
E. Fruit
Question: 1124 If a household in consumer equilibrium spends $40 per month on beef and
$20 per month on pork, then
A. Beef is more expensive than pork

B. Beef gives more total utility than pork
C. The last pound of beef yields the same marginal utility as the last pound of pork
D. The last dollar spent on beef yields the same marginal utility as the last dollar spent on pork
E. Beef has a higher marginal utility than pork
Question: 1125 If the marginal utility of a commodity wear negative then

A. Less of it would be preferred to more
B. The household would only consume it if it were free
C. The household should buy more of it to make its marginal utility positive
D. The law of diminishing marginal utility would be violated.The household’s consumer surplus must
be large
E.
1106 . D 1107 . A 1110 . C 1112 . B 1113 . A 1115 . E 1116 . C 1119
.B 1120 . D 1122 . A 1124 . D 1125 . A
Question: 1133 Which of the following is not part of the institutional arrangements that
characterize an economic system?
A. Whether property is owned by individuals or the state

B. At what level economic decisions are made
C. How government officials are selected
D. What incentives are used to motivate economic behavior
E. How resources are allocated
Question: 1134 When resources are allocated by government planning.
A. Capitalism is usually the result

B. The economy is normally more efficient
C. Decision making is decentralized
D. Decision making is decentralized
E. Both a. and b .are correct.
Question: 1135 In a socialist economy. The invisible hand
A. Guides most resource allocation decisions.

B. Operates effectively only in the labor market
C. Operates effectively only in the market for capital
D. Operates effectively only in the market for capital
E. Is prevented from operating effectively
Question: 1136 Is prevented from operating effectively.
A. Is prevented from operating effectively

B. Were forced to pay very high prices for consumer goods.
C. Had difficulty finding enough desirable goods to buy . Were told by the government which goods
buy
D. Were told by the government which goods buy
E. Faced the situations described in both a. and b.
Question: 1137 Government planners play a central role in allocating resources
A. Only under socialism

B. Only under capitalism
C. Under both capitalism and socialism
D. Under neither capitalism nor socialism
E.
Question: 1139 Consumers play a central role in allocating resources

C. Under both capitalism and socialism.
D. Under neither capitalism nor socialism
E.
Question: 1140 Economic incentives are important

C. Equally under capitalism and socialism
D. More under capitalism than socialism
E. More under socialism than capitalism
Question: 1141 Karl marx
A. Led the Russian revolution

B. Provided the theoretical basis for socialism
C. Developed his theory in response to the great depression of the 1930s
D. Played the roles described in both a. and b
E. Played the roles described in both b. and c
Question: 1142 As nearly as we can estimate it. Soviet productivity growth
A. Was subject to severe cycles

B. Accelerated in the 1980s
C. Had nothing to do with the decline of socialism
D. Was stagnant or declining after about 1965
E. Was never positive
Question: 1143 Soviet managers
A. Were left little to do under central planning

B. Pursued economically efficient choice
C. Had incentives to reduce product quality and variety
D. Had incentives to reduce production levels
E. Had both the incentives described in c. and d
1124 . D 1125 . A 1133 . C 1134 . C 1135 . E 1136 . C 1137 . A 1139
.B 1140 . D 1141 . B 1142 . D 1143 . C
Question: 1144 The soft budget constrain of soviet enterprises was.The soft budget
constrain of soviet enterprises was
A. The absence of a bankruptcy threat

B. Similar to promote efficiency
C. Designed to promote efficiency
D. The major cause of inflation in the soviet union
E. A mechanism through which price adjustment was made gradual
Question: 1145 Which of the following is not a major aspect of the transition of socialist to
market economies?
A. Freeing of prices
B. Redefinition of property rights
C. Development of market institutions
D. Establishment of stronger moral incentives for efficiency
E. Disestablishment of large state enterprises.
Question: 1146 The concept of property rights in an economic system has to do with the
A. Ownership of society’s productive resources

B. Choices firms make on what and how to produce
C. Use of economic incentives to motivate people
D. Use of moral incentives to motivate people
E.
Question: 1147 An apparently irreversible trend in china in the 1990s is
A. Reliance on moral incentives to encourage private production

B. A movement to allow individual state runs banks to print their own money
C. A shift from public to private production of goods and services
D. To allow Japan to operate major Chinese industries
E.
Question: 1148 Market allocation fundamentally relies upon

A. A system of relative prices
B. A belief that employees work for the good of society
C. Government ownership of the means of production
D. Moral incentives to encourage productive efficiency
E.
Question: 1149 Karl Marx believed that in the transitory socialist phase of an economy’s
evolution people should be rewarded
A. So that all incomes would be equal

B. To each according to their contribution
C. To each according to their need
D. So that people were all poor and would thus work harder
E.
A. A system of relative prices

B. A belief that employees work for the good of society
C. Government ownership of the means of production
D. Moral incentives to encourage productive efficiency
E.
Question: 1161 Karl Marx’s belief that communism would eventually replace capitalism was
based upon his faith in
A. The superiority of economic over moral incentives

B. A revolution by exploited workers
C. Overconsumption by the working class that would bankrupt the economy
D. The inability of factory owners to increase exploitation of workers
E.
Question: 1162 As the former soviet economy moves toward private market capitalism the
world bank suggests first priority should be given to
A. Stabilize the macro economy and deregulate prices

B. Privatization of state owned businesses
C. Dismantling of nuclear weapons
D. Adoption of one person one vote democracy
E.
Question: 1163 As the former soviet economy moves toward private market capitalism the
world bank suggests first priority should be given to
A. Stabilize the macro economy and deregulate prices

B. Privatization of state owned businesses
C. Dismantling of nuclear weapons
D. Adoption of one person one vote democracy
E.
1142 . D 1143 . C 1144 . A 1145 . D 1146 . A 1147 . C 1148 . A 1149
.B 1160 . A 1161 . B 1162 . A 1163 . A
Question: 1164 The economic system used in the former U.S.S.R. is best described as
A. Centrally planned capitalism

B. Free market socialism
C. Pragmatic market socialism
D. An administrative command economy
E.
Question: 1165 If business managers are rewarded on the basis of how much output they
create
A. Consumers will get exactly what they want

B. It causes profits to be as large as possible
C. Productivity growth must be positive
D. There is the potential for quality to suffer
E.
Question: 1166 Early critics of planned socialist economies believed such economies would
ultimately fail because they underutilized
A. Scarce information
B. Labor resources
C. Plants and factories
D. Natural resources
E.
Question: 1168 Which of the following is not part of the institutional arrangements that
characterize an economic system?
A. Whether property is owned by individuals or the state.

B. At what level economic decisions are made.
C. How government officials are selected.
D. What incentives are used to motivate economic behaviour.
E. How resources are allocated.
Question: 1169 When resources are allocated by government planning.

A. capitalism is usually the result.
B. the economy is normally more efficient.
C. decision making is decentralized.`
D. economic incentives are usually weak.
E. both a.and b.are correct.
Question: 1170 In a socialist economy ,the invisible hand
A. guides most resource allocation decisions.

B. operates effectively only in the labor market.
C. operates effectively only in the market for capital.
D. gives misleading signals about resource allocation.
E. is prevented from operating effectively.
Question: 1171 Consumers in the former Soviet Union
A. were able to choose freely among a wide variety of goods.

B. were forced to pay very high prices for consumer goods.
C. had difficulty finding enough desirable goods to buy.
D. were told by the government which goods to buy.
E. faced the situations described in both a and b.
Question: 1173 Government planners play a central role in allocating resouces
A. only under socialism.

B. only under capitalism.
C. under both capitalism and socialism.
D. under neither capitalism nor socialism.
E.
Question: 1175 Consumers play a central role in allocating resources
A. only under socialism

C. under both capitalism and socialism.
D. under neither capitalism nor socialism.
E.
Question: 1177 Economic incentives are important
A. only under socialism .

C. equally under capitalism than socialism.
D. more under socialism than capitalism.
Question: 1178 Karlm Marx
A. Led the Russian Resolution.

B. provided the theoretical basis for socialism.
C. developed his theory in response to the Great Depression of the 1930s.
D. played the roles described in both a. and b.
E. played the roles describes in both b and c.
Question: 1179 As nearly we can estimate it,Soviet productivity growth
A. was subject to severe cycles.

B. accelerated in the 1980s.
C. had nothing to do with the decline of socialism.
D. was stagnant or declining after about 1965
E. was never positive.
Question: 1181 Under the Soviet system,supply-demand balance was
A. maintained effectively planners.

B. unsatisfactorily attempted by planners.
C. not a major consideration of planners.
D. left to market-price movements.
E. both c.and d.
Question: 1182 Soviet managers
A. were left little to do under central planning.

B. pursued economically efficient choices.
C. had incentives to reduce product quality and variety.
D. had incentives to reduce production levels.
E. had both the incentives described in c and d.
Question: 1184 Which of the following is not a major aspect of transition of socialist to
market economies?
A. Freeing of prices.
B. Redefinition of property rights.
C. Development of market institutions.
D. Establishment of stronger moral incentives for efficiency.
E. Disestablishment of large state enterprise.
A. ownership of society 's productive resources.

B. choices firms make on what and how to produce.
C. use of economic incentives to motivate produce.
D. use of moral incentives to motivate people.
E.
Question: 1188 In equilibrium,the consumer is not
A. on the highest indifference curve attainable with his income

B. achieving his existing level of utility at the cheapest possible cost.
C. spending all of his income.
D. maximizing his utility given his income.
E. on his highest indifference curve.
Question: 1189 Indifference curve reflect
A. preferences.
B. income.
C. prices.
D. both income and prices.
E. consumption.
Question: 1190 If a household 's income is $900,the price of compact discs(on the vertical
axis) is $15,and the price of cassette tapes(on the horizontal axis) is $10,then budget line
intersects the vertical axis at a value of
A. 900
B. 15
C. 60
D. 80
E. an indeterminate magnitude based on the data given.
Question: 1191 The absolute value of the slope of the budget line in the previous problem is
A. 15.
B. 10.
C. 1.5.
D. 0.67.
E. impossible to determine from the data given.
A. ownership of society's productive resources.

B. choices firms make on what and how to produce.
C. use of economic incentives to motivate people.
D. use of moral incentives to motivate people.
E.
Question: 1198 In China during the early 1990s.
A. two-fifth of state enterprise lost money.

B. the private sector produced less than 5 percent of total output.
C. there has been a shift of population from cities to rural areas.
D. the decision was made to eliminate subsides to inefficient industries.
E.
Question: 1199 An apparently irreversible trend in China in the 1990s is
A. reliance on moral incentives to encourage private production.

B. a movement to allow individual state-run banks to print their own money.
C. a shift from public to private production of goods and services.
D. to allow Japan to operate major Chinese industries.
E.
A. a system of relative prices.

B. a belief that employees work for the good of society.
C. government ownership of the means of production.
D. moral incentives to encourage productive efficicency.
E.
Question: 1201 Karl Marx believed that in the transitory socialist phase of an economy's
evolution,people should rewarded
A. so that all incomes would be equal.

B. to each according to their contribution.
C. to each according to their need.
D. so that people were all poor and would thus work harder.
E.
Question: 1203 Karl Marx belief that communism would eventually replace capitalism was
based upon his faith in
A. the superiority of economic over moral incentives.

B. a revolution by exploited workers.
C. overconsumption by the working class that would bankrupt the economy .
D. the inability of factory owners to increase exploitation of workers.
E.
Question: 1206 The amount of change in quantity demanded that will result from a given
change in price (due ti a shift in supply)is determined by
A. how far to the left the demand curve is ..
B. how price-elastic demand is .
C. how price-elastic supply is .
D. how income -elastic demand is .
E. how elastic demand is to other prices.8
Question: 1208 The collection of the price elasticity of demand is computed as the absolute
value of the percentage change in quantity demanded divided by
A. the change of price.

B. the change in supply.
C. the percentage change in supply .
D. the percentage change in quantity supplied.
E. the percentage change in price.
Question: 1209 The coefficient of the price elasticity of demand is
A. negative as long as the law of demand holds.

B. always negative or zero .
C. always positive or zero.
D. positive only when the supply curve slopes upward.
E. sometimes positive and sometimes negative.
Question: 1211 Demand is elastic when
A. the coefficient of elasticity is great than zero.

B. the coefficient of elasticity is less than one .
C. the coefficient of elasticity is negative.
D. the coefficient of elasticity is greater than one.
E. the demand curve is steeper than forty -five degrees.
Question: 1209 The coefficient of the price elasticity of demand is
A. negative as long as the law of demand holds.

B. always negative or zero .
C. always positive or zero.
D. positive only when the supply curve slopes upward.
E. sometimes positive and sometimes negative.
Question: 1211 Demand is elastic when
A. the coefficient of elasticity is great than zero.

B. the coefficient of elasticity is less than one .
C. the coefficient of elasticity is negative.
D. the coefficient of elasticity is greater than one.
E. the demand curve is steeper than forty -five degrees.
Question: 1282 If the demand curve is inelastic.then
A. it may be nearly vertical.

B. sellers will receive less for the good if they reduce supply.
C. quantity demanded is very sensitive to income .
D. demand is hardly affected by income .
E. close substitutes for the good are abundant.
Question: 1283 If price rises from $5,then,according to the midpoints formula ,the
percentage change is
A. 66.7 percentage.
B. -40 percentage.
C. 25 percentage.
D. 40 percentage.
E. 50 percentage.
Question: 1284 If the demand for a good is inelastic and its price rises from $4 due to a shift
in supply ,then quantity demanded
A. increases.
B. decreases by less than 33 percent.
C. decreases by less than 40 percent.
D. decreases by more than 40 percent.
E. decreases by more than 50 percent.
Question: 1286 If the demand for a good is inelastic and its price rises from $6 due to a shift
in supply ,then sellers' total revenue
A. increases.
B. decreases by less than 33 percent.
C. decreases by less than 40 percent.
D. decreases by more than 40 percent.
E. decreases by more than 50 percent.
Question: 1287 If the price of a good falls from 90 cents to 70 cents and quantity demanded
increases from 35 units,then the coefficient of the price elasticity of demand is
A. 0.5.
B. 0.25.
C. 1.
D. 0.78.
E. -1.
Question: 1290 If the coefficient of the price elasticity of the demand for grapefruit is 1.5
,and the price of grapefruit rises from $8 per case to $12.then the quantity demanded will
A. decrease by 75 percent.
B. decrease by 6 percent.
C. decrease by 50 percent.
D. decrease by 40 percent.
E. decrease by 60 percent.
Question: 1291 Moving down along a linear demand curve.
A. demand becomes less elastic.

B. demand does not change.
C. demand has unitary elastic.
D. demand becomes more elastic.
E. demand approaches perfect elasticity.
Question: 1293 Between points a and b in Figure6, demand is
A. elastic.
B. inelastic.
C. unitary elastic.
D. perfectly elastic.
E. perfectly inelastic.
Question: 1295 Between points b and c in Figure6, demand is
A. elastic.
B. inelastic.
C. unitary elastic.
Question: 1296 Between points c and d in Figure 6.demand is
A. elastic.
B. inelastic.
C. unitary elastic.
Question: 1298 Perfectly elastic demand curves
A. are positively sloped.

B. are vertical.
C. slope slightly downward.
D. are very steep.
E. are horizontal.
Question: 1299 A good tends to have relatively inelastic demand if
A. it is a large part of consumers'budgets.

B. close substitutes are available.
C. it is a luxury.
D. it has no very close substitutes.
E. it has a high price.
Question: 1301 Which of the following should have the most elastic demand ?
A. Dole bananas.
B. Bananas.
C. Fresh fruit .
D. Fresh produce .
E. Food.
Question: 1302 The cross -price elasticity of the demand for orange juice with respect to the
price of apple juice is probably
A. negative .
B. near infinity .
C. zero .
D. positive.
E. insignificant.
Question: 1303 Economists define luxuries as goods with
A. positive income elasticities.

B. income elasticities greater than one.
C. zero income elasticities.
D. highly elasticities.
E. negative income elasticities.
Question: 1305 Which of the following goods is most likely to be exchanged in market of
local rather than national scope?
A. University professors.
B. Computer components.
C. Building materials.
D. Magazines.
E. Jet airplanes.
Question: 1306 Which of the following is not necessarily a characteristic of a perfectly
competitive market?
A. There is perfect information about prices.

B. All participants in the market are small relative to the size of the overall market.
C. There are many buyers and sellers.
D. Buyers and sellers do not know each other.
E. A uniform price prevails throughout the market.
Question: 1308 God is bought and sold in a (n)
A. perfectly competitive market.

B. imperfect,national market.
C. imperfect,international market.
D. perfectly competitive,local market.
E. perfectly competitive,national market.
Question: 1310 Used cars are sold in a (n)
A. perfectly competitive,local market.

B. perfectly competitive,national market.
C. imperfect,national market.
D. imperfect ,international market.
E. imperfect,local market.
Question: 1311 A shift in the demand for a product is likely to result from a change in
A. the product's price

B. the price of other products which could be produced using similar resources.
C. expectations.
D. the price of resources used to produce it.
E. production technology.
Question: 1314 The law of demand is most directly a result of
A. the law of comparative advantage.

B. the law of diminishing returns.
C. the principle of substitution.
D. economies of large -scale production.
E. the law of increasing costs.
Question: 1317 If the price of cheese increases ,then
A. the demand for cheese will increase.

B. the demand for cheese will decrease .
C. the quantity of cheese demand will decrease.
D. both the demand and the quantity of cheese demand will decrease.
E.
Question: 1318 If the price of a good rises and household' incomes go up exactly the same
proportion then quantity of the good demanded will
A. increase.
B. stay the same.
C. decrease.
D. decrease or stay the same ,but not in crease.
E. be unpredictable based on information given.
Question: 1320 If a good is an inferior good ,then an increase in incomes with everything
else held constant will
A. increase demand for the good.

B. increase supply of the good.
C. leave demand and supply unchanged.
D. reduce the equilibrium price of the good.
E. have a unpredictable effect on the market.
Question: 1322 If there is an increase in the supply of a complement to radishes,then there

will be a(n)
A. increased demand for radishes.

B. increased supply of radishes.
C. no change in demand or supply of radishes.
D. a decrease in the equilibrium price of radishes.
E. an unpredictable effect on the radishes market.
Question: 1324 If the price for which consumers expect radios to sell next year
decreases,then
A. current demand for radios will fall.

B. current supply of radio will fall.
C. current demand for radios will rise only if radios are a normal good.
D. current demand for radios will rise.
E. current demand will change unpredictably.
Question: 1326 The supply curve would probably shift to the right if
A. resources used in production became more costly.

B. the technology of production improved.
C. the of price of the good decreased.
D. consumer' incomes increased.
E. some sellers left the market.
Question: 1327 Plumbing and pipe fitting require many of the same skills.If the wage paid to
pipe fitters increased ,then the effect on the market for plumbers would probably be
A. an increase in demand .
B. a decrease in demand .
C. an increase in supply.
D. a decrease in supply.
E. decreases in both demand and supply.
Question: 1331 Holding everything else constant ,an increase in supply leads to
A. an increase in demand .
B. an increase in price.
C. an increase in quantity exchanged.
D. a decrease in demand.
E. a decrease in quantity supplied.
Question: 1332 Some farm land can be used to produce either corn or soybeans .If the
demand for corn increase ,then
A. the demand for soybeans should increase .

B. the supply of soybeans should increase.
C. the demand for soybeans should decrease.
D. the supply of soybeans should decrease.
E. the market for soybeans should be largely unaffected
Question: 1333 Which of the following is not true at the equilibrium price?
A. Quantity demanded equals quantity supplied.

B. The supply and demand curves intersect.
C. Consumers are satisfied with the quantity they purchase given its price.
D. The good is not scarce.
E. Producers are content with the price they receive for the product,given the quantity they produce.
Question: 1334 In a perfectly competitive market ,suppliers must know
A. the incomes of consumers.

B. the price of the good.
C. what other commodities households could substitute for the good.
D. consumers'expectations of the future.
E. all of the above.
Question: 1338 Which of the following transactions would not enter the circular flow of
transactions between households and firms?
A. Your purchase of this study guide.

B. Hiring of household maid service.
C. The employment of janitors by your school.
D. The purchase of paper to print this book.
E. The rental payments of apartment dwellers.
Question: 1341 If a gallon of gasoline costs $1.10 and a can of dog food costs $.45,then the
relative price of dog food in terms of gasoline is
A. 0.45 dollars per can.

B. 1.10 dollars per gallon .
C. 0.45/1.10 gallons per can.
D. 1.10/0.45 cans per gallon.
E. 0.45*1.10 gallon per can.
Question: 1424 The relative price of houses in terms of hours of labor will surely increase if
A. the money price of houses rises

B. the money price of labor rises
C. the money prices of both houses and labor rises
D. the money price of labor falls
E. the money price of houses rises and that of labor falls
Question: 1425 Which of the following best describes the units of measurement of the
relative price of a pound of bananas in terms of gallons of gasoline?
A. dollars
B. dollars per pound
C. gallons per pound
D. pound per gallon
E. pounds per dollar
Question: 1428 Which of the following best describes the units of measurement of the
money price of bananas?
A. Pounds.
B. Dollars per pound.
C. Dollars.
D. Pounds per dollar.
E.
Question: 1431 If the relative price of cheese in terms of labor services is 0.5 hours per
pound,and the wage rate of labor is $4.50 per hour,then the money price of cheese is
A. $2.25/ pound.
B. $4.50/ pound .
C. 2 pounds/hour.
D. $9.00.
E. 2 hours/ pound.
Question: 1434 Which of the following is primarly determined by the behavior of money
prices but not relative prices.
A. Resource-allocation decisions.
B. Ant-inflation policy.
C. Households 'labor-supply decisions.
D. Firms'production decisions.
E. All of the above are determined primarily by money prices.
Question: 1437 According to the principle of substitution.
A. many goods have no effective substitutes .

B. households are good substitutes for firms .
C. nearly all goods have substitutes.
D. the price of substitutes goods must be the same.
E. buyers will stop buying a good if its price rises.
Question: 1439 The principle of substitution assures that households will substitute corn for
beans if
A. the money price of beans rises .

B. the money price of corn rises.
C. the relative price of corn in terms of beans rises.
D. the relative price of corn in terms of beans falls.
E. the money price of beans falls.
Question: 1441 The invisible hand refers to
A. unseen government control of the economy.

B. the power of large corporations.
C. a 1950s horror film.
D. the unseen coordination of market economies by the price system.
E. intangible goods produced in the economy.
Question: 1442 If, at the prevailing price,more of a good is desired than is available for sale ,
A. the price is below equilibrium.

B. the price is at equilibrium.
C. the price must fall.
D. the price system cannot allocation the good efficiently.
E. we cannot tell anything about the price.
Question: 1444 In a market economy,households are prevented from consuming "too much
"of very scare commodities by
A. government regulations.
B. long line waiting to buy these goods.
C. not being able to find them .
D. high prices charged for these goods.
E. some combination all of the above.
Question: 1445 In a market economy,decisions about what goods to be produced reflect
A. the government 's preferences.

B. the dollar votes of consumers.
C. the dollar votes of producers.
D. the preferences of the owners of productive resources.
E. the lack of coordination of decisions.
Question: 1447 Which of the following is not omitted from the basic circular flow model?
A. Steel industry sales to the automobile industry.

B. Intermediate goods.
C. Goods and services produced within households that are used by households.
D. Households sales of factors of production to businesses.
E.
Question: 1448 Tall, slender athletes play basketball while shorter,huskler ones play football
because of
A. the law of diminishing returns.

B. the law of increasing costs.
C. the law of decreasing costs.
D. the law of comparative advantage.
E. economies of large-scale production.
Question: 1450 Economies of large-scale production
A. lead to greater specialization.

B. offset the effects of the law of comparative advantage.
C. cause firms to use more capital and less labor .
D. undermine the efficiency of the price system.
E.
Question: 1452 One recent to the higher airline fares for business travelers was to
A. derive rather than fly across the country .

B. relocate business operations to major cities.
C. increase the use of telefax and teleconferencing.
D. have most businesses buy their own planes so employees could fly for free.
E.
Question: 1454 Many is defined as
A. currency and coin.

B. anything valuable.
C. anything that can be exchanged.
D. anything widely accepted in exchange for other goods.
E. any financial assets issued by the government
Question: 1455 An increase in the amount of saving by households would probably result
from
A. a decline in interest rates.

B. inflation.
C. a decrease in roundabout production .
D. a rise in market interest rates.
E. decreased desire for future consumption.
Question: 1456 Which of the following is probably a public good?
A. Parcel delivery service.

B. Clean streets.
C. Airline tickets.
D. Taxi service.
E. Electricity.
Question: 1458 The payments received by the owners of capital are called.
A. pure rents.
B. rent.
C. quasi rents.
D. interest .
E. profits.
Question: 1473 A company 's computer system would depreciate more quickly in an
economic sense as a result of
A. hiring less labor to work with the computer.

B. a revolutionary innovation in computer hardware.
C. a change in tax laws allowing greater depreciation expenses.
D. an increase in the price of computers.
E. a reduction in the demand for the company's product.
Question: 1474 Holding everything else constant,the stock of capital would grow slowly if
there was
A. increased borrowing by the government .

B. a lower equilibrium real interest rate.
C. an increased supply of loanable funds.
D. an increase in the marginal physical product of capital.
E. an increase in the expected rate of inflation.
Question: 1475 If the interest rate is 8 percent ,then a loan of $400 will earn interest each
year in the amount of
A. $8.
B. $40.
C. $32.
D. $50.
E. $5,000.
Question: 1477 If the interest rate is 8 percent ,then the present value of a perpetual stream
of payment of $1,000 each is
A. $8,000.
B. $12,000.
C. $10,000.
D. $1,000.
E. infinite.
Question: 1478 The reason why professional football players should not strike is
A. their opportunity costs are relatively low.

B. no one can replace them.
C. they do not earn economic rent as football players.
D. the federal antitrust laws prohibit unions in sports.
E.
Question: 1479 If the market interest rate rises from 10 percent to 12 percent,then the market
price of a bond that pays 10 percent of its face value of $1,000 each year forever will
A. fall from $1,000 to $833.

B. increase from $1,000 to $1,200.
C. remain at $1,000.
D. fall from $1,200 to $1,000.
E. increase from $833 to $1,000.
Question: 1480 Which of the statement about junk bonds is correct?
A. Their default rate is approximately 30 percent.

B. They pay,on average ,more than an investor could earn in the stock market.
C. They paid for the" merger-mania "of the 1980s.
D. The higher return is due to higher risk .
E.
Question: 1482 Which of the following would be most likely to result from an increase in the
interest rate?
A. Households buy more cars.

B. Firms increase new plant construction.
C. More workers quit and go back to college
D. Households substitutes future for current consumption.
E. Firms substitute capital for labor.
Question: 1483 A capital good that produces for only year,has a marginal revenue product
of $1,000 for that year,and costs $800,has a rate of return of
A. 8 percent.
B. 10 percent.
C. 25 percent.
D. 12.5 percent.
E. 20 percent.
Question: 1485 A piece of improved land that has a marginal revenue product of $10,000 per
year in perpetuity and that costs $50,000 has a rate of return of
A. 50 percent .
B. 20 percent.
C. 25 percent.
D. 5 percent.
E. 10 percent.
Question: 1486 An increase in the market rate of interest causes the rate of return on any
specific capital project to
A. increase .
B. decrease.
C. change unpredictably.
D. increase by exactly the same amount.
E. not change.
Question: 1487 In equilibrium , firms will undertake those investment projects that have
A. rate of return greater than the interest rate.

B. positive rates of return.
C. rates of return less the interest rate.
D. marginal revenue product greater than the interest rate.
E. marginal revenue product greater than their cost.
Question: 1489 An increase in the anticipated rate of inflation will cause the nominal interest
rate to
A. increase by more than the change in the inflation rate.

B. increase by the same amount as the change in the inflation rate.
C. increase by less than the change in the inflation rate.
D. stay the same .
E. decrease.
Question: 1491 An increase in the anticipated rate of inflation will cause the real interest rate
to
A. increase by more than the change in the inflation.

B. increase by the same amount as the change in the inflation rate.
C. increase by less than the change in the inflation.
D. stay the same.
E. decrease.
Question: 1492 If the nominal interest rate is 11 percent the real rate is 6 percent ,then the
expected rate of inflation is
A. 11 percent.
B. 6 percent.
C. 5 percent.
D. -5 percent.
E. impossible to determined from the data given.
Question: 1494 A bond's interest rate would be higher if
A. it has a low liquidity.

B. it has low liquidity .
C. there is low inflation.
D. it has a long time to maturity.
E. it has a short time to maturity.
Question: 1495 If interest rates are expected to rise in the future then
A. the long-term interest rate will be higher than the short -term rate.
B. long-term and short-term rate will be about equal .
C. the short-term interest rate will be higher than the long-term rate.
D. no one will buy long-term bonds.
E. no one will buy short-term bonds.
Accounting
Question: 924 Direct wages should always be classified
A. as variable costs
B. as fixed costs
C. as semi-fixed
D. according to their actual behavior
E.
Question: 928 The First in First Out (FIFO) materials pricing system charges issues at
A. the price of the most recent batch in stock

B. the price of the first component used in the period
C. the average price of goods in stock
D. the price of the oldest batch in stock
E.
Question: 933 The Last in First Out (LIFO) system will
A. value stocks at current values

B. understate product in times of rising prices
C. tend to produce realistic product costs
D. make cost comparisons between jobs easier
E.
Question: 940 When Activity Based Costing is used it is probable the
A. all products will cost more

B. high volume product will tend to be costed lower
C. direct costs will be a smaller proportion of total costs
D. more costs will be charghed to products which are produced for stock
E.
Question: 942 The use of backflush accounting means that

A. conversion costs cannot be carried forward in stock values
B. stocks cannot occur
C. raw material costs will be reduced
D. costs are attributed to stock and cost of sales when the finished goods are made
E.
Question: 943 Unit costs are extensively used in the public sector. This is because
A. thy are a rough and ready guide to efficiency

B. thy are a good measure of the quality of service provided
C. they allow for regional sifferences
D. they enable public sector organisations to stay within the set cash limits
E.
Question: 944 Which of the following firms are most likely to use process costing
A. a car manufacturer
B. a sugar refinery
C. a builder
D. a departmental store
E.
Question: 946 Activity Based Costing absorbs overheads into products
A. by treating most of them as long-term variable costs

B. by ignoring the volume of production
C. according to the usage of support overheads
D. by only producing on demand
E.
Question: 948 Significant Digit Codes are
A. where some of the digits are part of the description

B. only used for raw materials
C. to enable a code to be self-checking
D. a means of combing expenditure and location codes
E.
Question: 952 Check digit variation is
A. the process of checking invoices for correct calculations

B. a method of making code numbers self checking
C. to enable codes to be self-indexing
D. the encoding of invoices with internal codes
E.
Question: 956 Which of the following firms would be most likely to use job costing
A. a paint manufacturer
B. a sugar refinery
C. a firm of architects
D. a car manufacturers
924 . D 928 . D 933 . C 940 . B 942 . D 943 . A 944 . B 946 . C 948
.A 952 . B 956 . C
Question: 960 Labour turnover can be expressed as a ratio as follows
A. Number of leavers
B. Number replaced
C. Numbers of employees at the end
D. Number of leavers in a period
E.
Question: 965 A cost driver is
A. the amount of overhead caused by an activity

B. a unit of activity which causes costs
C. a long term variable costs
D. equivalent to a cost centre
E.
Question: 969 Prime cost includes
A. Direct labour,direct materials and direct expenses

B. All direct costs plus factory overheads
C. Direct materials plus total overheads
D. Direct labour plus factory overheads
E.
Question: 974 A cost center is
A. A unit of production in relation to which costs are ascertained

B. A location which is responsible for controlling direct costs
C. Part of the overhead system by which costs are gathered together
D. Any location or department which incurs cost
E.
Question: 981 Cost apportionment is carried out by
A. Charging each cost unit a realistic proportion of overheads

B. charging whole items of cost to centres
C. Ensuring that each period carries its amount of cost by making accruals or prepayment s
D. Dividing common costs among centres in proportion to the benefit received
E.
Question: 990 Overhead absorption is done so that
A. common costs are shared among cost centres,in prortion to the benefit received
B. The total amount of overheads for the firm can be calculated
C. The total overheads for a cost centre can be calculated
D. Each unit of the product carries a share of ovcerheads
E.
Question: 998 Expenditure on steel used in the product would be classified into which of the
following categories
A. Direct material/cost unit

B. direct material/production overheads
C. in direct material/cost unit
D. prime cost/production overhead
E.
Question: 1005 A firm uses direct labour a basis for overhead absorptionif large fluctuations
in labour houes are experiences
A. this is a reason to use predetermined overhead rate

B. this will mean that overheads will be under or over absorbed for the year
C. different amounts of overhead will be charged to jobs with the same labour hours
D. it will be better to use a machine hour rate
E.
Question: 1039 A predetermined overhead rate using machine hours as a basis
A. is calculated by dividing actual overhead by budgeted machine hours

B. results in the over absorption of overhead
C. is inferior to a rate based on labour hours
D. results in charging similar overheads to jobs with similar machine hours
E.
Question: 1043 The costing associated with a typical site based contract
A. means that more costs cab be identified as direct

B. requires some estimate to be made of interim profits
C. means that the contract account will be credited with materials at the end of thee contract
D. includes all of these
952 . B 956 . C 960 . B 965 . B 969 . A 974 . C 981 . D 990 . D 998
.A 1005 . A 1039 . D 1043 . D
Question: 1046 Using process costing the amount of cost transferred to finished goods
stock is the cost of
A. the equivalent production for the period

B. the units completed during the period
C. the units started and completed during the period
D. the units in the opening Finished Goods stocks
E.
Question: 1054 Double loop feedback
A. is information designed to ensures that operations conform to plans

B. is designed to assess how well the control system operates and how relevant current pians are
C. is information passed up two layers of the organisation
D. is information that is double checked for accuracy
E.
Question: 1057 The distance A represents
A. contribution at activity level X

B. profit at activity level X
C. the amount of variable costs at activity level X
D. the margin of safety
E.
Question: 1061 The distance represents
A. contribution at activity level Y

B. the amount of variable costs at activity level Y
C. the level of sales at activity level Y
D. the amount of variable costs at activity level Y
E.
Question: 1069 Which of the following are possible causes of the changes in the graph at
activity level Z
A. an increase in sales value causing an increase in contribution

B. a decrease in fixed costs causing an increase in variable costs
C. an increase in total fixed costs and a decrease in variable costs per unit
D. an increase in total variable costs and a decrease in fixed costs per unit
E.
Question: 1078 What do the lines C and D represent
A. Fixed costs and variable costs respectively

B. Total costs and variable costs respectively
C. Variable cost and fixed costs respectively
D. Sales revenue and total costs respectively
E.
Question: 1081 If the total expenditure on cost type X was expressed as a cost per unit of
the product X would be classified as variable if
A. the cost per unit changed with the level of activity

B. the cost per unit was affected by inflation
C. the cost per unit remained constant with changes in the level of activity
D. the total expenditure on X remained the same
E.
Question: 1085 The main purpose of cost accounting is to
A. maximise profits
B. help in inventory valuation
C. provide information to management for decision-making
D. aid in the fixation of selling prices
E.
Question: 1086 One of the most important tools in cost planning is
A. direct cost
B. budget
C. cost sheet
D. marginal costing
E.
Question: 1088 The purpose of cost accounting is to provide information for
A. preparing costing P& L A/c

B. cost control
C. locating factors leading to wastages and losses
D. assessing the profitability and financial position of the firm
E.
1039 . D 1043 . D 1046 . C 1054 . A 1057 . A 1061 . D 1069 . C 1078
.B 1081 . C 1085 . C 1086 . B 1088 . B
Question: 1089 Fixed cost per unit increases when
A. variable cost per unit increases

B. variable cost per unit decreases
C. Production volume increases
D. production volume decreases
E.
Question: 1091 Variable cost per unit
A. varies when output varies

B. remains constant
C. increases when output increases
D. decreases when output decreases
E.
Question: 1093 Increase in total variable cost is due to
A. increase in fixed cost

B. increase in sales
C. increase in production
D. increase in total cost
E.
Question: 1095 An example of variable cost is
A. property taxes
B. interest on capital
C. direct material cost
D. depreciation of machinery
E.
Question: 1100 An example of fixed cost is
A. direct material cost

B. works manager,s salary
C. depreciation of machinery
D. chargeable expenses
E.
Question: 1102 Cost accounting concepts include all of following except

A. Planning
B. controlling
C. profit sharing
D. product costing
E.
Question: 1104 The three major elements of product costs are all but
A. direct materials
B. Factory overhead
C. direct labour
D. indirect labour
E.
Question: 1111 Cost of goods produced includes
A. production cost and finished goods inventory

B. production cost and work-in-progress
C. production cost, work-in-progress and finished goods inventory
D.
E.
Question: 1117 Cost of goods sold includes
A. cost of production and work-in-progress

B. cost of production and finished goods inventory
C. cost production, work-in-progress and finished goods invetory
D.
E.
Question: 1123 An overstatement of work-in-progress at the end of a period will
A. overstate cost of goods produced

B. understate current assets
C. understate gross profit
D. overstate net profit
Question: 1126 Conversion cost is equal to the total of
A. material cost and indirect wages

B. material cost and indirect wages
C. direct wages and factory overhead
D. material cost and factory overhead
E.
Question: 1127 Multiple costing method is used in
A. oil refinery
B. car manufacturing company
C. sugar mill
D. multi-product company
E.
Question: 1128 Toy manufacturing company should use
A. unit costing
B. job costing
C. batch costing
D. multiple costing
E.
Question: 1129 Electricity generating company should use
A. unit costing
B. process costing
C. batch costing
D. multiple costing
E.
Question: 1130 Job costing is used in
A. paper mills
B. chemical works
C. printing press
D. textile mill
E.
Question: 1131 Output costing is employed in
A. mining quarries
B. steel production
C. brick kilns
D. all of these
E.
Question: 1132 Contract costing is used in
A. ship-building
B. aeroplane industries
C. automobile industries
D. none of these
E.
Question: 1167 Direct material is a
A. Fixed cost
B. variable cost
C. semi variable cost
D.
E.
Question: 1172 Direct material is a
A. manufacturing cost
B. Administration
C. Selling and distribution cost
D. Any of the above
E.
Question: 1174 In manufacturing industries, the most important element of cost is
A. Material
B. Labour
C. Overheads
Question: 1176 Which of the following is an accounting record
A. Bill of Material
B. Bin card
C. stores ledger
D. All of these
E.
Question: 1180 Which of the following documents is used for issuing materials to
productions departments
A. purchase Requisition Note

B. stores Requisition note
C. Goods Received Note
D. stores Credit Note
E.
Question: 1183 Which of following is considered to be a normal loss of materials
A. Loss due to accidents

B. pilferage
C. Loss due to breaking the bulk
D. Loss due to careless handling of materials
E. All of these
Question: 1186 According to which of the following methods of pricing, issues are close to
current economic values
A. Last-in-first-out price
B. First-in-first-out price
C. Highest-in-first-out price
D. Weighted average price
E.
Question: 1187 in which of the following methods of pricing costs lag behind the current
economic values
A. Last-in-first-out price.
B. first-in -first-out price.
C. Replacement price.
D. Weighted average price.
E.
Question: 1192 Which of the following methods of stock control aims at concentrating
efforts on selected items of materials
A. perpetual inventory system

B. Materials turnover
C. Maximum, minimum and re-order level setting
D. ABC analysis
E.
Question: 1193 in base stock method of pricing the material issues, the term base stock
represents the
A. Quantity of stock being issued

B. stock in balance
C. Minimum stock
D. Maximum stock
E.
Question: 1194 Which of the following items of cost should NOT be treated as NOT be
treated as direct material
A. Electricity representing 90% of the total cost

B. Sand paper used in production
C. Thread used in stitching garments
D. All of the above
E.
Question: 1195 Continuous stock-taking is a part of
A. Annual stock-taking
B. Perpetual inventory system
C. ABC analysis
D. periodic inventory system
E.
Question: 1197 The classification of items in ABC analysis is made on the basis of
A. Investment value of materials

B. Consumption value of materials
C. Quantity of materials consumed
D. All of these
Question: 1202 In which of the following methods, issues of materials are priced at a pre-
determined rate
A. Inflated price method

B. Standard price method
C. Replacement price method
D. Specific price method
E.
Question: 1204 In which of the following methods, materials are issued at the price
prevailing at the time of issue
A. Inflated price method

B. Standard price method
C. Replacement price method
E.
Question: 1205 The storekeeper should initiate a purchase requisition when stock reaches
A. Minimum levelvel
B. maximum level
C. re-order level
D. overage level
E.
Question: 1207 Which of the following material losses should be transferred to costing
profit and loss account
A. Loss by evaporation
B. Loss due to improper storage of materials
C. Loss due to breaking the bulk
D. All of these
E.
Question: 1210 When material prices fluctuate widely, the method of pricing that gives
absurd results is
A. Simple average price

B. Weighted average price
C. Moving average price
D. Inflated price
E.
Question: 1212 When prices fluctuate widely, the method that will smooth out the effect of
fluctuations is
A. simple average
B. weighted average
C. FIFO
D. LIFO
E.
Question: 1213 In which of the following methods, the charge to production is at actual cost
A. Weighted average price

B. standard price
C. Replacement price
D. FIFO
E.
Question: 1294 Expected annual usage of a particular raw material is 2,00,000 units and the
economic order quantity is 10,000 units The invoice cost of each unit is RS.500 and the cost
to place one order is RS.80. The average inventory is
A. 1,00,000 units
B. 5,ooo units
C. 10,000 units
D. 7,500 units
E.
Question: 1297 Taking the data in Q.3.21 above, the estimated annual ordering cost is
A. RS.1,600
B. RS.10,000
C. RS.3,200
D. RS.5,000
E.
Question: 1300 On the basis of data given in Q 3.21 above, number of orders to be placed in
each year are
A. 10
B. 50
C. 20
D. 100
E.
Question: 1304 When material prices are showing a rising trend, which method of pricing
will show lower cost of production
A. FIFO
B. LIFO
C. Weighted average
D. Replacement price
E.
Question: 1307 In periods of rising prices, which method of pricing shows higher stock
values
A. FIFO
B. LIFO
C. Weighted average
E.
Question: 1309 In which method, prices charged to production are at the current prices
prevailing in the market
A. FIFO
B. LIFO
C. Weighted average
E.
Question: 1312 When prices are showing a falling tendency, which method of pricing of
material issues will show higher closing stock value
A. FIFO
B. LIFO
C. Weighted average
E.
Question: 1313 When production is below standard specification or quality and cannot be
rectified by incurring additional cost, it is called
A. Defectives
B. Spoilage
C. Waste
D. Scrap
E.
Question: 1315 Materials losses are due to some of the following reasons
A. Fore accident
B. Theft
C. Breaking the bulk
D. Evaporation
E. pilferage
Question: 1319 Documents used in a material control system include the following
A. Purchase Requisition Note

B. Stores Requisition Note
C. Bill of Materials
D. Goods Received Note
E. Purchase order
Question: 1321 At what amount materials issued on 8-1-1997 will be charged if FIFO method
is used
A. RS.1,550
B. RS.1,575
C. RS1,700
D. RS1,750
E.
Question: 1323 At what amount materials issued will be charged ifLIFO method is used
A. RS.1,550
B. RS.1,575
C. RS.1,700
D. RS.1,750
E.
Question: 1325 at what amount materials issued will be charged if simple average price is
used
A. RS.1,550
B. RS1,575
C. RS.1,610
D. RS.1,700
Question: 1329 At what amount materials issued will be charged if weighted average price is
used
A. RS.1,575
B. RS.1,610
C. RS.1,625
D. None of these
E.
Question: 1330 At what amount materials issued will be charged if replacement price
method is used
A. RS.1,400
B. RS.1,700
C. RS.2,100
D. RS. 1,750
E.
Question: 1335 What will be the value of closing stock under FIFo method
A. RS 600
B. RS 675
C. RS 700
D. None of these
E.
Question: 1336 What will be the value of closing under LIFO method
A. RS.600
B. RS.675
C. RS.690
D. RS.750
E.
Question: 1337 What will be the value of closing stock under simple average method
A. RS.600
B. RS.690
C. RS.725
D. RS.750
E.
Question: 1339 What will be the value of closing stock if weighted average method is
applied
A. RS.600
B. RS.690
C. RS.725
D. RS.750
E.
Question: 1340 What will be the value of closing stock if replacement price method if used
A. RS.100
B. RS.300
C. RS.200
D. None of thes
E.
Question: 1344 In which of following incentive plans of wages payment, wages on time
basis are NOT guaranteed
A. Halsey plan
B. Rowan plan
C. Taylor,s differential piece rate system
D. Gantt's task and bonus system
E.
Question: 1427 In which of the following incentive plan of wages payment, wages on time
basis are NOT guaranteed?
A. Halsey plan
B. Rowan plan
C. Taylor's differential piece rate system
D. Gantt's task and bonus system
E.
Question: 1429 Which of the following methods of wage payment is most suitable where
quality and accuracy of work is of primary importance?
A. piece rate system
B. differential piece work system
C. time rate system
D. Halsey premium system
Question: 1430 Cost of idle time arising due to non-availability of raw material is
A. charged to costing profit and loss A/C

B. charged to factory overheads
C. recovered by inflating the wage rate
D. all of these
E.
Question: 1432 When overtime is required for meeting urgent orders, overtime premium
should be
A. charged to costing profit and loss A/c

B. charged to overhead costs
C. charged to respective jobs
D. all of these
E.
Question: 1433 Time and motion study is conducted by the
A. time keeping department

B. payroll department
C. personnel department
D. engineering department
E.
Question: 1435 Labour productivity is measured by comparing
A. actual time with standard time

B. total output with total man hours
C. added value for the product with total wage cost
D. none of the above
E.
Question: 1436 When standard outputs is 10 units per hour and actual output is 12 units per
hour , the efficiency is
A. 80%
B. 120%
C. 100%
D. none of these
E.
Question: 1438 Wages sheet is prepared by
A. time keeping department

B. payroll department
C. personnel department
D. cost accounting department
E.
Question: 1443 Given that for a job, standard time is 8 hours, actual 6 houre and the time
rate is Rs 2per hour what is the total wages under halsey premium plan
A. Rs 18
B. Rs 14
C. Rs 16
D. Rs12
E.
Question: 1449 using data as given in Q. 314 above, what will be the amount of wages under
time rete system
A. RS. 12
B. RS.14
C. 16
D. 18.
E.
Question: 1451 Using data as given in Q. 314 above, what will be the amount of bonus under
rowan plan
A.
B. RS. 2
C. RS. 3
D. RS. 4
E. None of the above
Question: 1453 using data as given in Q 3.14 above, what is the amount of bonus under
Halsey plan
A. RS. 2
B. RS.3
C. RS.4
D. Nil
E.
Question: 1457 Standard output is 100 units per day of 8 hours and the piece rates are 20
piece per unit under Taylor's differential piece rate system,what will be amount of wages if a
worker produces 95 unit in a day
A. RS.14.00
B. RS.14.25
C. 18.50
D. 19.00
E.
Question: 1459 Given the data in 3.19 above,what will be the amount of wages under
Taylor's differential piece rate system,if a worker produces 101 units om a day
A. RS.15.15
B. RS.20.00
C. 20.15
D. 20.20
E.
Question: 1460 Comparing Rowan and Halsey premium plans, it is seen that when the time
saved is less than 50% of the time saved,
A. Rowan plan allows more wages to a worker than Halsey plan

B. Rowan plan allows less wages to a worker than Halsey plan
C. Rowan and Halsey plan allow equal wages to a worker
D.
E.
Question: 1461 When time saved is 40% of the standard time, Halsey plan allows
A. more wages than Rowan plan

B. less wages than Rowan plan
C. equal wages as compared to Rowan plan
D.
E.
Question: 1463 Standard time is 60 hours and guaranteed time rate is 30 paise per hour
what is the amount of wages if job is completed n 48 hours? Rowan plan is in use
A. RS.24.00
B. RS.26.80
C. RS.17.28
D. RS.20.40
E.
Question: 1464 Which of the following a group incentive plan

A. priestman plan
B. Badaux plan
C. Halsey weir plan
D. All of these
E.
Question: 1466 Packing cost is
A. production cost
B. selling cost
C. distrbution cost
D. It may be any of the above
E.
Question: 1468 Directors' remuneration and expenses from a part of
A. production overhead
B. selling overhead
C. administration overhead
D. distribution overhead
E.
Question: 1471 Salary of a foreman should be classified as a
A. fixed overhead
B. variable overhead
C. semi-fixed or semi-variable overhead
D.
E.
Question: 1472 Charging to a cost centre those overheads that result soleoy from existence
of that cost centre is known as
A. allocation
B. apportionment
C. absorption
D. allotment
E.
Question: 1476 Absorption means
A. charging of overheads to cost centres

B. charging of overheads to cost units
C. charging of overheads to cost centres or cost units
D.
E.
Question: 1481 Administration overheads are recovered as a percentage of
A. direct materials
B. direct wages
C. prime cost
D. works cost
E.
Question: 1484 Which of the following is NOT is selling overhead
A. Insurance to cover sold goods while in transit

B. Royalty on sales
C. Legal costs for debt realisation
D. Distribution of samples
E.
Question: 1488 Which method of absorption of factory overheads do you suggest in a

concern which produced only one uniform type of product
A. percentage of direct wages basis

B. Direct labour hour rate
C. Machine hour rate
D. A rate per unit of output
E. Any of the above
Question: 1490 When the amount of under-or over-absorption is significant, it should be

disposed of by
A. transferring to Costing profit and Loss A/C.

B. the use of supplementary rates
C. carrying over as a deferred charge to the next accounting year
D.
E.
Question: 1493 Idle capacity of a plant refers to the difference between
A. maximum capacity and practical capacity

B. practical capacity and normal capacity
C. practical capacity and capacity based on sales expectancy
D. maxiumum capacity and actual capacity
E.
Question: 1496 Maximum possible productive capacity of a plant, when no operating time is
lost, is its
A. practical capacity
B. Theoretical capacity
C. Normal capacity
D. Capacity based on sales expectancy
E.
Question: 1499 The capacity which is based on the long term average of the sales
expectancy level is known as
A. practical capacity
B. Actual capacity
C. Normal capacity
D. None of these
E.
Question: 1502 When the amount of overhead absorbed is less than the amount of overhead
incurred, it is called
A. under-absorption of overhead
B. over-absorption of overhead
C. proper absorption of overhead
D.
E.
Question: 1506 Bad debt is an examples of
A. production overhead
B. Administration overhead
C. selling overhead
D. Distribution overhead
Question: 1508 Number of workers employed is used as a basis for the apportionment of
A. time office costs

B. canteen expenses
C. personnel department expenses
D. any of these
E.
Question: 1518 In which of the following methods of providing depreciation, the amount of
depreciation goes on decreasing with the age of the asset
A. Reducing balance method
B. sum of digits method
C. Annuity method
D. (a) and (b) above
E.
Question: 1544 Selling and distribution overheads are absorbed on the basis of
A. Rate per unit

B. percentage on selling price of each unit
C. Any of these
D.
E.
Question: 1549 The difference over a period of time, between actual factory overhead and
absorbed factory will usually be minimum when the predetermined overhead rate is based on
A. normal capacity
B. maximum capacity
C. direct labour hours
D. machine hours
E. none of the above
Question: 1553 A monopoly will shut down its plant in the short run if
A. it is making a loss.
B. marginal revenue is less than marginal cost.
C. marginal revenue less than average variable cost at all levels of output.
D. average revenue is less than average variable cost at all levels of output.
E. average revenue is less than marginal cost at all levels of output.
Question: 1555 A company found that the differences in product costs resulting from the
application of pre-determined overhead rates rather than actual overhead rates were
immaterial even though actual production was substantially less than planned production
The most likely explanation is that
A. factory overhead was mainly composed of variable costs

B. several products were produced simultaneously
C. fixed factoy overhead was a significant cost
D. costs of factory overhead items were substantially larger than anticipated
E.
Question: 1560 Under-absorbed factory overhead costs are
A. excess variable factory overhead costs

B. factory cost not allocated to units produced
C. fixed factory costs not allocated to unit produced
D. cost that cannot be controlled
Question: 1567 If a per-determined factory overhead rate is not employed and the volume of
production is reduced from the level planned, the cost per unit would be expected to
A. remain unchanged for fixed costs and increase for variable costs
B. increase for fixed cost and remain uncharged for variable costs
C. increase for fixed costs and decrease for variable costs
D. decrease for fixed costs and decrease for variable costs
E.
Question: 1569 The least suitable basis for applying overhead is
A. materials consumed
B. direct labour cost
C. direct labour hours
D. machine hours
E.
Question: 1571 Excess plant capacity means
A. temporary idleness of plant

B. greater production capacity than a company can use
C. the difference between theoretical capacity and actual capacity.
Question: 1573 The concept of ideal capacity of plant as used in cost accounting is its
A. theoretical maximum capacity

B. best capacity for normal production.
C. capacity used for standard setting.
D. capacity below which production should not fall.
E.
Question: 1580 pre-determined overhead recovery rate is Rs 3 per hour and pre-determined
hours are 50,000 Actual hours worked are 55,000 and actual overhead Rs 1,70,000. what is
the amount of under or over-absorption of overhead
A. RS.20000 over-absorption
B. RS. 20,000 over-absorption
C. RS.5000 under-absorption
D. RS.5,000 over-absorption
E.
Question: 1583 in Q. 3.34, what is the amount of pre-determined overhead
A. RS.1,50,000
B.
C. rs.1,65,000
D. cannot be computed
E. None of these
Question: 1585 What is the amount of absorbed overhead in Q 3.34
A. RS. 1,50,000
B. RS. 1,65,000
C. RS. 15,000
D. RS 20,000
E.
Question: 1592 In Q 3,37, which method should be used to treat under/over absorbed
amount in cost accounts
A. Tr. to costing P& L A/c

B. Use of supplementary rate
C. Carry over to next year
D. Any of the above
E.
Question: 1594 In Q 3.37, what is the predetermined number of machine hours
A. 16,000
B. 12,000
C. Cannot be known
D. None of these
E.
Question: 1599 A machine purchased for Rs 20,000 is discarded because of obsolescence

and sold for Rs 5,000 after three years of service, resulting in a loss of Rs 3,000.This loss
should be
A. treated as production cost

B. transferred to costing P& L A/c in the year of sale
C. spread over the years of the remaining expected life of the machine
D. Either(b)or(c)
E.
Question: 1603 The principal factors to be considered on designing a cost system include
A. Manufacturing process
B. desires of management
C. nature of business
D. company organisation structure
E. all of the above
Question: 1606 The most suitable cost system where the products differ in type of materials
used and work performed is
A. job costing
B. Batch costing
C. operating costing
D. None of these
E.
Question: 1609 In shoe manufacture, the most suitable cost system is
A. job costing
B. Batch costing
C. Contract costing
D. Non of these
Question: 1611 job costing is used in
A. Repair shops
B. printing presses
C. Furniture making
D. Automobile garages
E. All of these
Question: 1613 Most of the expenses are direct in
A. job costing
B. batch costing
C. contract costing
D. All of these
E.
Question: 1616 When a contract is not completed at the end of the accounting year,profit on
incomplete contract is
A. transferred to profit and loss Account

B. transferred to reserve
C. transferred profit to profit and loss Account and partly to reserve
D.
E.
Question: 1618 When a contract is not completed at the end of the year, loss on incomplete
contract is
A. transferred to profit and loss Account

B. transferred to work-in-progress
C. transferred partly to profit and Loss Account and partly to work-in progress
D.
E.
Question: 1622 when contract id 40% complete, the amount of profit to be taken credit for is
usually
A. the amount of profit estimated

B. 40% the estimated profit
C. 1/3of the estimate profit multiplied by cash ratio
D.
E.
Question: 1627 in contract accounts, the amount of work-in-progress consists of
A. cost of work uncompleted

B. cost of work uncompleted
C. the amount of profit not transferred to profit and Loss Account
D. (a) and(B) above
E. (a)(b) and(C)
Question: 1630 cost-plus contract is usually entered in to those where
A. cost can be easily estimated

B. it is not possible to compute the cost in advance with a reasonable degree of accuracy
C. contractor wants to earn a higher amount of profit
D.
E.
Question: 1631 Contract price is not fixed in case of
A. Cost-plus contracts
B. Escalation clause
C. De-escalation clause
D. All of the above
E.
Question: 1632 Contract price is not fixed in case of

A. Cost-plus contracts
B. Escalation clause
C. De-escalation clause
D. All of the above
E.
Question: 1633 Cost plus contract is useful from the point view of
A. contractor
B. contractee
C. both contractor and contractee
D.
E.
Question: 1634 In contract costing, contract account is prepared by the
A. contractor
B. contractee
C. both by contractor and contractee
D.
E.
Question: 1635 In a building contract of Rs. 2,40,000, at the end of the work certified is Rs.
1,60,000 and estimated profit is Rs. 15,000. what is the amount of profit to be credited to profit
and LOSS Account assuming cash ratio is 80%
A. RS.15,000
B. RS. 12,000
C. RS. 8,000
D.
E.
Question: 1636 Economic batch quantity is that size of the batch of production where
A. average cost is minimum

B. total cost is minimum
C. set-up cost of machine is minimum
D. carrying cost is minimum
E.
Question: 1637 Production order means
A. an order received from a customer for the production of a specific item

B. instructions to the shops to proceed with the production of the product
C. an order to the store-keeper to issue necessary materials for proeuction
D.
E.
Question: 1638 In contract costing, valuation of which of he following dos not include an
element of profit
A. work in progress certified

B. work in progress uncertified
C. Both(a) and(b)
D. Neither(a)nor(b)
E.
Question: 1641 A contract of RS.5,00,000 is 55% complete as certified it shows a notional

loss of RS 20,000. Accounting treatment of this loss is
A. Transfer 2/3 of this loss to P&L A/c

B. Transfer 2/3 X cash ratio of this loss to P&L A/c
C. Transfer 55% of this loss to P&L A/c
D. Transfer entire amount of loss to P&L A/c
E.
Question: 1652 Direct cost chargeable to contract does not include
A. Materials
B. Labour
C. Supervision
D. Storage lost
E. both(c)and (d)
Question: 1655 Which of the following items is not written on the credit side of the contract
account
A. work in progress-certified and uncertified

B. Materials returned
C. Cash received from contractee
D. plant at site
E.
Question: 1659 The type of process loss that should not affect the cost of inventories is
A. abnormal loss
B. normal loss
C. seasonal loss
D. standard loss
E.
Question: 1663 During Jan. 1997, Marconi LTd. had tatal manufacturing cost of Rs.1,80,000.
The business completed 14,000 units of product, of which 4,000 units were half completed in
Dec 1996 and sarted production on an additional 6,000 units that production cost per unit
was
A. RS.18
B. RS.16.36
C. RS.12
D. RS.9
Question: 1668 100 units are introduced in a process in which normal loss is 15 units If
actual output is also 100 units,than there is
A. no abnormal loss or abnormal gain

B. an abnormal loss
C. an abnormal gain
D.
E.
Question: 1670 50 units are processed at a total cost of RS.80, normal loss being 10% Each
unit carries a scrap value of 25 paise. If output is 40 units, the value of abnormal loss will be
A. RS. 1.25
B. RS.8.00
C. RS.8.75
D. RS.8.88.
E.
Question: 1676 Given the data in Q.3.5 above, the normal cost of unit is
A. RS.0.25
B. RS.1.60
C. RS.1.78
D. RS.1.75
E.
Question: 1678 A factory transferred out 8,800 completed and closing stock was 800 units
50% completed. Assuming FIFO method, the equivalent production during the period was
A. 8,900 units
B. 9,100 units
C. 9,300 units
D. 9,500 units
E.
Question: 1682 in a factory, the equivalent production (using FIFO method) was 7,500 units
during a period which had 500 units 60% complete on hand at the start and 600 units 75%
complete at the end of the period. How many units were introduced during the period
A. 6,750
B. 6,850
C. 7,050
D. 7,150
E.
Question: 1685 An under-statement of ending work-in-progress inventory will
A. understate cost of goods produced

B. understate net profit
C. overstate gross profit
D. overstate current assets
E.
Question: 1688 An over-statement of beginning work-in-progress inventory will
A. understate cost of goods sold

B. understate the profit
C. overstate net profit
D. overstate gross profit
E.
Question: 1689 When units are lost at end of the production process, the cost is charged to
A. factory overhead
B. selling expense
C. work-in-progress
D. completed units
E.
Question: 1691 The term Economic Batch Quantity is used in relation to
A. Operating costing
B. Batch costing
C. process costing
D. Unit costing
E.
Question: 1698 Input in a process is 4,000 units and normal loss is 20%. When finished
output in the process is only 3240 units, there is an
A. abnormal loss of 40 units
B. abnormal gain of 40 units
C. neither abnormal loss nor abnormal gain
Question: 1700 In Q.3.14 further assuming scrap value of loss is RS.5 per unit, the amount
of sales from scrap is
A. RS.3,800
B. RS. 4,000
C. RS. 200
D. None of these
E.
Question: 1704 Further assuming (in Q. 3.14 and Q 3.15) the cost assigned to abnormal gain
of 40 units is RS. 280, the amount to be transferred to costing profit and loss account
A. RS.280
B. RS.200
C. RS.80
D. RS.360
E.
Question: 1705 Hopeless Company, which uses FIFO method in process costing, began the
current year with 300 units 50% completed, transferred out 5,000 completed units during the
year ended with 500 units 70% completed Equivalent production for the period was
A. 5,000
B. 4,700
C. 5,200
D. 5,800
E.
Question: 1706 Classification and accumulation of costs by fixed and variable costs is of
special importance in
A. process costing
B. unit costing
C. operation costing
D. operating costing
E. none of these
Question: 1708 Joint product manufacturing is fundamental in
A. automobile industry
B. oil refineries
C. engineering company
D. All of the above
E.
Question: 1709 Individual products, each of a significant sales value, produced

simultaneously from the same raw material, should be known as
A. by-products
B. main products
C. joint products
D. common products
E.
Question: 1712 Total manufacturing costs are divided by the total number of units produced
to obtain a cost per unit under the
A. average unit cost method

B. sales value method
C. physical unit measurement method
D.
E.
Question: 1714 which of the following are virtually always subsequent costs
A. raw material costs

B. direct labour costs
C. selling and distribution cost
D. None of these
E.
Question: 1720 When by-products are of small total value, its accounting should by
A. apportioning a part of joint cost to by-products

B. realisable value of by-products should be treated as miscullaneous income and transferred
to P&L A/c
C. realisable value of by-products should be apportioned over the main products
D. Any of these
E.
Question: 1723 Net realisable value of by-products at the split off point should be calculated
by reverse cost method when
A. BY products are of small total value

B. BY-products are of considerable sales value
C. BY-products require further processing for their sale
Question: 1729 Cost per unit is the average cost is applicable in
A. Job costing
B. Operating costing
C. Multiple costing
D. Contract costing
E.
Question: 1732 Trimmings in timber industry should be treated as a
A. waste
B. scrap
C. by-product
D. joint product
E.
Question: 1735 Which of the following methods of accounting of by-products should be

applied when the by-product is to be utilised in the undertaking itself as material for some
other process
A. sales value method

B. Other income method
C. Opportunity cost method
D.
E. Reverse cost method
Question: 1737 Credit is given to the process account at a pre-determined value of the by-
product under the
A. Standard cost method

B. opportunity cost method
C. Reserve cost method
D. sales value method
E.
Question: 1742 The primary purpose of apportioning joint costs of a processing centre to
various products produced is to
A. develop accurate processing cost variances product-wise

B. report more correct standard product costs for comparative analysis
C. establish inventor cost assigned to unsold units
D. record accurate cost of sales by product lines
Question: 1823 Given: input 1,000 units, Cost production RS 1,850 per Normal loss 10% of
input, Actual loss 50 units, Scrap value Rs 0.50 per unit. What is the abnormal loss/gain
A. 50 units abnormal loss
B. 50 units abnormal gain
C. 100 units abnormal gain
D. 100 units abnormal loss
E.
Question: 1826 In Q3.35,what is the cost per unit
A. Rs. 2.18
B. Rs. 2.05
C. Rs. 2
D. RS. 1.89
E.
Question: 1828 Output of a process was 2,500 units, normal loss is 10% of input and
abnormal loss 200 units. How many unis were introduced in the process
A. 2,700
B. 3,000
C. 3,200
D. 3,500
E.
Question: 1842 In Q 3.37, What is the quantity of total loss
A.
B. 2700 units
C. 300 units
D. 350 units
E. 500 units
Question: 1843 when quantity sold is 18,000 units, opening stock 2,000 units and closing
stock 3,000 unis, what is the quantity produced
A. 16,000 units
B. 17,000 units
C. 19,000 units
D. 20,000 units
E.
Question: 1845 A transport company is running 3 bases with 50 passengers each, covering
a distance of 100 km daily. what is the number of passenger km. per day
A. 5,000
B. 300
C. 15,000
D. 150
E.
Question: 1847 Cost and financial accounts are reconciled under
A. Integral system
B. Non-intergral system
C. Under both (a)and (b)
D. None of these
E.
Question: 1852 Which of the following accounts make the cost ledger self-balancing
A. overhead adjustment account

B. Costing P.& L.account
C. Cost Ledger control account
D. None of the above
E.
Question: 1855 Costing profit and Loss account does not record the
A. sales value of goods

B. balance of overhead adjustment account
C. balance of cost of sales account
D. balance of stores ledger control account
E.
Question: 1866 Purchases for special jobs is debited to
A. Work-in-progress ledger control account

B. Cost ledger control account
C. Stores ledger control
D.
E.
Question: 1871 Integral accounts eliminate the necessity of operating
A. Cost Ledger Control account

B. stores ledger control account
C. Overhead adjustment account
D. All of these
E.
Question: 1874 Which of the following items is not included in cost accounts
A. Interest received on bank deposits
B. Dividend paid on share capital
C. Damages payable at law
D. Debenture interest
E. all of these
Question: 1879 Which following items is included in cost accounts
A. Transfer to general reserve

B. Notional rent
C. Rent receivable
D. Non of the above
E.
Question: 1885 When costing loss is RS. 5,600, administrative overhead under-obsorbed
being RS. 400, the loss as per financial accounts should be
A. RS. 5,600
B. RS.6,000
C. RS. 5,200
D.
E.
Question: 1889 Depreciation charged in costing is RS.12,500 and in financial books is

RS.11,200.What will be the financial profit when costing profit is RS.5,000
A. RS. 5,000
B. RS. 3,700
C. RS. 6,300
1086 . B 1088 . B 1089 . D 1091 . B 1093 . C 1095 . C 1100 . B 1102
.C 1104 . D 1111 . B 1117 . B 1123 . D 1126 . C 1127 . B 1128 . C 1129
.D 1130 . C 1131 . D 1132 . A 1167 . B 1172 . A 1174 . A 1176 . C 1180
.B 1183 . C 1186 . A 1187 . B 1192 . D 1193 . C 1194 . D 1195
.B 1197 . D 1202 . B 1204 . C 1205 . B 1207 . B 1210 . A 1212 . B 1213

.D 1294 . B 1297 . A 1300 . B 1304 . A 1307 . A 1309 . D 1312 . B 1313
.B 1315 . A 1319 . D 1321 . B 1323 . C 1325 . B 1329 . B 1330 . C 1335
.D 1336 . A 1337 . C 1339 . B 1340 . B 1344 . C 1427 . C 1429 . B 1430
.A 1432 . C 1433 . D 1435 . D 1436 . C 1438 . C 1443 . C 1449
.A 1451 . B 1453 . A 1457 . B 1459 . D 1460 . A 1461 . B 1463 . C 1464
.A 1466 . D 1468 . B 1471 . C 1472 . A 1476 . B 1481 . D 1484 . A 1488
.D 1490 . B 1493 . C 1496 . C 1499 . C 1502 . A 1506 . C 1508 . D 1518
.D 1544 . D 1549 . A 1553 . D 1555 . C 1560 . E 1567 . B 1569
.A 1571 . B 1573 . A 1580 . C 1583 . A 1585 . B 1592 . B 1594 . B 1599
.B 1603 . E 1606 . A 1609 . B 1611 . E 1613 . C 1616 . C 1618 . A 1622
.C 1627 . E 1630 . B 1631 . D 1632 . D 1633 . C 1634 . A 1635 . C 1636
.B 1637 . B 1638 . B 1641 . D 1652 . D 1655 . C 1659 . A 1663 . C 1668
.C 1670 . C 1676 . D 1678 . A 1682 . B 1685 . B 1688 . B 1689
.D 1691 . B 1698 . B 1700 . A 1704 . C 1705 . C 1706 . D 1708 . B 1709
.C 1712 . A 1714 . C 1720 . B 1723 . C 1729 . B 1732 . B 1735 . C 1737
.A 1742 . D 1823 . A 1826 . C 1828 . B 1842 . D 1843 . C 1845 . B 1847
.B 1852 . C 1855 . D 1866 . A 1871 . A 1874 . E 1879 . C 1885
.B 1889 . C

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uestion: 921 Moving along the budget line leaves the consumer

Question: 931 Moving along an indifference curve leaves the consumer

A. which indifference curve the consumer is on.

Question: 1028 An increase in the consumers income causes

A. the budget line to get steeper.

A. the budget line to get steeper.

Question: 1033 In equilibrium the consumer is not

A. on the highest indifference curve attainable with his income.

Question: 1034 indifference curves reflect

A. A household consumes more of it

Answers to the questions of Economics on this page

921 . D 931 . C 1027 . E 1028 . B 1029 . A 1033 . E 1034 . A 1037

.C 1087 . E 1090 . E 1092 . A

A. An increase in the price of beef

Question: 1096 Diamonds are more expensive than water because

A. They yield higher total utility

A. She will consume only one of them

A. Is not in consumer equilibrium

A. Her consumer surplus

Question: 1103 Allocated to the goods with higher marginal utility.

A. 1fish and 6 gallons of milk

1090 . E 1092 . A 1094 . B 1096 . B 1097 . A 1098 . D 1099 . D 1101

.B 1103 . B 1105 . A 1106 . D 1107 . A

A. The area abc ($250).

A. The area abc ($250)

A. The area abc ($250)

Question: 1115 The value of the 50th watermelon to consumers in figure 4 is

A. The area abc ($250)

A. Increase consumption of the good and other similar goods

A. Increase consumption of the good and other similar goods

A. Beef is more expensive than pork

Question: 1125 If the marginal utility of a commodity wear negative then

1106 . D 1107 . A 1110 . C 1112 . B 1113 . A 1115 . E 1116 . C 1119

.B 1120 . D 1122 . A 1124 . D 1125 . A

A. Whether property is owned by individuals or the state

Question: 1134 When resources are allocated by government planning.

A. Capitalism is usually the result

Question: 1135 In a socialist economy. The invisible hand

A. Guides most resource allocation decisions.

Question: 1136 Is prevented from operating effectively.

A. Is prevented from operating effectively

Question: 1137 Government planners play a central role in allocating resources

A. Only under socialism

Question: 1139 Consumers play a central role in allocating resources

A. Only under socialism

Question: 1140 Economic incentives are important

A. Only under socialism

Question: 1141 Karl marx

A. Led the Russian revolution

Question: 1142 As nearly as we can estimate it. Soviet productivity growth

A. Was subject to severe cycles

Question: 1143 Soviet managers

A. Were left little to do under central planning

1124 . D 1125 . A 1133 . C 1134 . C 1135 . E 1136 . C 1137 . A 1139

.B 1140 . D 1141 . B 1142 . D 1143 . C

A. The absence of a bankruptcy threat

A. Ownership of society’s productive resources

Question: 1147 An apparently irreversible trend in china in the 1990s is

A. Reliance on moral incentives to encourage private production

Pakistan & SAARC

Pakistan & SAARC

Pakistan & SAARC