MANAGERIAL ECONOMICS MCQ

1. Managerial Economics is the integration of ____ with ____ for solving business and management problems.
Ans. Economic theory, Business Practice

2. Managerial Economics fills up the gap between _______ and _______.

Ans. Economic theory Practice.

3. Managerial Economics is mainly a ______ science.

Ans. Prescriptive

4. Basic objective of a firm today is ________.

Ans. Profit optimization

5. Managerial Economics is basically a branch of __ economics.

Ans. Micro

6. Two major functions of a Managerial Economist are ____ and ______.

Ans. Decision-making Forward Planning

1. In a typical demand schedule quantity demanded varies ___________ with price.

Ans. Inversely

2. In case of Giffen’s goods, price and demand go in the ______ directions.

Ans. Same / upward

3. If demand changes as a result of price changes, then it is a case of _____ and ____ in demand.
Ans. Expansion, contraction

4. Law of demand is a _________ statement.

Ans. Qualitative

5. Demand function is much more _______ than law of demand.

Ans. Comprehensive / wider

6. In case of Veblen goods, a fall in price leads to a _______ in demand. Ans. Fall

7. Law of demand explain the ___change in demand and elasticity of demand explain _____ change in demand.
Ans. Direction percentage

8. According to Marshall, __ is the degree of responsiveness of demand to the change in price of that commodity.
Ans. Price Elasticity of Demand

9. The relatively elastic demand curve is ______. Ans. Flatter

10. When the quantity demanded increases with the increase in income, we say that income elasticity of demand
will be ____. When quantity demanded decreases with increase in income, we say that the income elasticity of
demand is ____.
Ans. Positive; negative

11. _______ helps the manager to decide the advertisement expense.

Ans. Advertisement Elasticity of Demand

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12. Point method helps to measure _________ quantity of change in demand and arc methods helps to measure
____ changes in demand.
Ans. Small, large

13. Demand forecasting refers to an estimate of ____________ for the product under given condition.
Ans. Most likely future demand

14. The heart of the survey method is ___________________.

Ans. Questionnaire

15. Collective opinion method is also known as ___________________.

Ans. Sales-force polling

16. Sample survey method of Demand forecasting is also called _________.

Ans. Consumer panel

17. An economic indicator indicates changes in the magnitude of an ____________.

Ans. Economic variable

18. On the basis of___________________ it is possible of project future sales of a company.

Ans. Time series

19. Stock is _______________________.

Ans. Potential supply

20. Supply curve generally slopes _________________.

Ans. Upwards

21. ___________ shows the relationship between price and quantity supplied of a particular product.
Ans. Law of supply

22. The supply curve shifts when there is a change in quantity supplied due to the factors other than________.
Ans. Price

23. When the supply increase the supply curve shifts to the ____________.
Ans. Right

24. Supply tends to be _______________ in short run.

Ans. Inelastic

25. Tabular representation of different quantities of commodities supplied at varying price is called___.
Ans. Supply schedule

26. Absence of change in movement in economics is called ___________. Ans. Equilibrium

27. The quantity bought and sold at the equilibrium is called ____________. Ans. Equilibrium quantity

28. There will be change in _______ when there will be a shift in either demand curve or supply curve or both.
Ans. Equilibrium Price

29. Production creates _____ or ___ of value.

Ans. New utilities, addition.

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30. Production function explain ___ or ____ relationship between inputs and outputs.
Ans. Technological, engineering.

31. In the short period only ___________ factor inputs are changed.
Ans. Variable.

32. When marginal product is zero toal product will be _________.

Ans. Highest

33. An ISO _ Quant curve shows different alternative combinations of inputs which helps to produce same level
of output where as an ISO-Cost curve shows __ combination of two inputs that can be purchased with a given
amount of investment expenditure while prices of two factor inputs remain constant.
Ans. Various alternative, particular

34. When all inputs are increased by 8% and output increases by 13% then it is a case of laws of___.
Ans. Diminishing returns

35. Internal economies depend on the growth of a ___ and external economies depend on the growth of the ____.
Ans. Firms industry

36. Economies of scope refers to the benefits which arise to a firm when it produces more than _______ rather
than producing ________ separately by two firms.
Ans. One product jointly

37. Opportunity cost of anything is the alternative that has been _____ .
Ans. foregone

38. Marginal cost deals with changes in cost of ______ unit where as incremental cost deals with changes in cost
of ________.
Ans. One, a group of units

39. AC minus AVC would give us _________

Ans. AFC

40. Total cost includes ___________ profits.

Ans. Normal

41. Marginal cost is associated with _________ costs.

Ans. Variable

42. In the long run all cost are ______________.

Ans. Variable

43. In ______ model, the important assumption is that the entrepreneur aims at maximising his profits.
Ans. Profit Maximisation Model

44. _________ is the point where the firm has stopped incurring losses but yet to start gaining profit.
Ans. Break Even point

45. The full form of TR is ___________

Ans. Total Revenue

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46. According to Economist Theory of Firm, a firm is a ____ unit, which converts input into output and while
doing so, tries to create surplus value.
Ans. Transformation

47. The firm aiming for profit maximization reaches its equilibrium only when it produces _________.
Ans. Profit maximizing output

48. Business decisions are made to cope with _____.

Ans. Changes

49. _______ is related to demand of sales management and sales decision.

Ans. Market share goal

50. _______ is related to price and resource allocation decisions.

Ans. Profit goal

51. _______works as a shock absorber.

Ans. Slack payment

52. _______ and ___ types of resolving conflicts are qualitative.

Ans. Sequential hearing to demand and Decentralizing the decision making

53. Cyert and March points out that the coalition group has multiple, _____ and ________ goals.
Ans. Conflicting and opposite

54. According to ____ modern firms are managed by both the manager and the shareholders (owners).
Ans. Robin Marris

55. In _______, the objective of the firm is balanced growth.

Ans. Marris Growth Maximization Model

56. In Marris Growth Maximization Model, the manager tries to maximize his satisfaction and his satisfaction
lies in the ______.
Ans. Growth rate of the firm

57. In ______ relationship, growth determines profit.

Ans. Differentiated diversification

58. Sales maximization model is an alternative for ____ model. Ans. Profit maximization

59. Boumal thinks managers are more interested in maximising ___ rather than profit. Ans. Sales

60. In oligopoly market structure, the firms compete more in terms of advertisement, product variations etc.
rather than ____.
Ans. Price

61. The expenditure, which is incurred by the Manager’s indulgence in a company car is termed by Williamson
as _____
Ans. Management slack

62. In the equation, S stands for ____ and D stands for ____. ), (DSfU
Ans. Staff expenditure and discretionary profit

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63. ____________ is the total income realized from the sale of its output at a price.
Ans. Total revenue

64. TR / Q = ___________________.
Ans. AR

65. Additional revenue earned by selling an additional unit of output is called ________.
Ans. Marginal revenue

66. AR curve coincides with the MR curve and run parallel to OX axis under ________ competition.
Ans. Perfect

67. AR and MR curves slope downwards under condition of __________ competition.

Ans. Imperfect.

68. Cost plus pricing = cost + ______________.

Ans. Fair profits

69. We come across going rate pricing generally under ________ market.
Ans. Oligopoly market

70. The objective of charging high prices for new products is to __________ from market.
Ans. Skim the cream from the market.

71. The rate of return pricing = Total cost per unit + _________________.
Ans. Mark- up

72. Administered prices are the prices which are fixed and enforced by the _________ in the overall interested of
community
Ans. Government