Sample Multiple Choice Questions B Tech ( Mech )- VIII Course: Engineering Economics and Financial Management 1. Economics is science A) Soci B) Pure () Natural D) None of these 2, Economics is an positive science, because it explain_. A) Ought to be B)Whatis — C) Both D) None of these 3. Economics is a__. A) Science B) Art ©) Both Science and art D) None of these 4. Economics is an normative science, because it explai A)Whatis —_ B) Cause & Effect relation €) Both D) Ought to be 5. Formula for Average Fixed Cost (AFC) is... A) AC-AVE B) TC-TEC C)AC-AFC —D)TCn-TCn-1 6. Formula for Average Variable Cost (AVC) is.. A) TC-TFC B) AC-AFC C)AC-AVE —D) TCn-TCn-1 7, Formula for Total Variable Cost (TVC) is... A) TC-TFC B)AVCXQ () Both A&B D) None of these 8. Formula for Marginal Cost (MC) is... A) TC-TFC B) AC-AVC C)AC-AFC —D) TCn-TCn-1 9, Formula for Marginal Production is... A) TPn-TPn-1 B) TP/Q C)APXQ D) None of these 10. The degree of inelastic price elasticity of demand is. A)=1 B)<1 Crt D) Infinite 11. In which goods, cross elasticity of Demand is Positive? A) Complementary B) Neutral €) Substitute D) None fthese 12. Proportionate change in the price of one commo¥ cause a proportionate change in the quai demanded of another / related (may be substitute or complementary) commodity. Called as. A) Price Elasticity B) Income Elasticity €) Arc Elasticity D) Cross Elasticity 13. The slope of indifference curve tends to A) Decline B) Zero ©) Unity D) Rise 14. In indifference map, higher IC indicates A) Lower level of satisfaction B) Higher level of satisfaction €) Same level of satisfaction D) Neither higher nor same level of satisfaction 15. Marginal Utility means ........ in total utility by the consumption of last unit A) Multiplication —_B) Subtraction ) Addition D) None fthese 16. At the point where Marginal utility is Zero, Total utility is..A) Minimum B) Below Zero C) Negative D) Maximum 17. Factor pricing means payment made for ....» of production, A) Process B) Distribution €) Consumption D) Factors 18. The slope indifference curve is depends on or is equal to__ A) Marginal utility 8) Marginal rate of substitution _—_C) Total Utility D) None of these 19. In law of demand, Price is... Factor. A) Dependent B) Independent C) Neutral —_D) None Of These 20, Amount of cost added in total cost by the last unit of production called as. A) Fixed cost B) Variable cost. _C) Average cost D) Marginal cost 21, Addition in total output by last unit of factor input is called__ A) Marginal Production B) Average Production €) Mixed Production D) Total Production 22. According to Hawley, Profit is the reward for A) Innovation B) Risk ©) Uncertainty D) None of these 23. According to Prof. Frank H. Knight, Profit is the reward for A) Innovation B) Risk ©) Uncertainty D) None of these 24. In case of short run production function, what is true___ A) Known as law of variable proportion B) Only one factor can be change C) Remaining factors are fixed D) All of these 25. Formula for Average Production is A)TP/Q B)APxQ ©) TPn-TPn-1 D) None of these 26. Deductive method of economic analysis means? A) Study general things and apply for particular things B) Study general things and apply for general things C) Study particular things and apply for particular things D) None of these 27. ___ branch of economics deals with study of international organization? A)Publicfinance _B) International economics C) Agriculture economics _D) None 28. Study of government income and expenditure is the study matter of which branch of economics? A) International economics B) Agriculture economics €) Public finance D) Econometrics 29. What are the basic economic problems? * A)Whatto produce B) Howto produce —_C) For whom to produce D) All ofthese 30, A) Cardinal B) Ordinal C) Both A&B D) None f these tility can be measured in terms of number.31 A) Cardinal B) Ordinal €) Both A&B D) None f these Utility cannot be measured in terms of number 32. Typically demand curve is always sloped. A) Upward B) Horizontal C) Downward D) Vertical 33. The degree of Perfect price elasticity of demand is... A)=1 B) <1 >t D) Infinite 34, Wage is the reward for A) Labor B) Land ©) Capital D) Organizer factor of production. 35. Profit is the reward for...... factor of production. A) Land B) Organizer C) Capital D) Labor 36. Rentis the reward for.. factor of production, A) Capital B) Labor ©) Land D) Organizer 37. Interest is the reward for.. A) Land B) Labor ©) Organizer D) Capital 38. According to Schumpeter, Profit is the reward for .factor of production. A) Innovation B) Risk C) Uncertainty D) None of these 39. According to Hawley, Profit is the reward for A) Innovation B) Risk ©) Uncertainty D) None of these 40. According to Prof. Frank H. Knight, Profit is the reward for A) Innovation B) Risk ©) Uncertainty D) None of these 41. In case of short run production function, what is true__ A) Known as law of variable proportion B) Only one factor can be change C) Remaining factors are fixed D) All of these 42, Formula for Average Production is. A) TP/Q B) AP xQ €) TPn-TPn-1 D) None ofthese 43. Why is the indifference curve convex to origin? A) Due to decline of marginal rate of substitution B) Due to law of diminishing marginal utility C) Due to monotonic preferences D) Both a and b 44, Amount of cost added in total cost by the last unit of production called as... A)Fixed ——_B) Variable C) Marginal _D) None of these 45. Per unit fixed cost mean... Cost. A) Total Fixed B) Average Variable C) Marginal) Average Fixed46. Liquidity preference theory given by__. A) Prof. J. M. Keynes B) Schumpeter ()Hawley —_D) Knight 47. “The General Theory of Employment, Interest and Money” book written by__ A)Hawley _B) Prof. J.M. Keynes ) Schumpeter D) Knight 48. Economics is a__. A) Science B) Art €) Both Science and art D) None of these 49. Economics is an normative science, because it explain A)Whatis —_B) Cause & Effect relation €) Both D) Ought to be 50. Formula for Average Fixed Cost (AFC) is... A) AC-AVC B) TC-TFC (©) AC-AFC D) TCn-TCn-1 51.Economics is a science which deals with , a) Matters and substance —_b) Chemicals and reactions ©) Human wants and resources d) Numbers and combinations 52) Microeconomics deals with the study of economic entities. a) Aggregate b) Individual ¢) Macro d) Socio 53) Opportunity costs are measured in monetary terms. a) Always b)Canbe —_c) Not d) Never 54) Upward curve or line show___ relation between two variables. a) Direct b) Indirect ©) Negative d) Horizontal 55) Resources have uses. a) Limited b) Unlimited c) Alternative) Particular 56) The market demand curve slopes ___from left to right. a)Downward —b) Upward —¢) Horizontal —_d) Vertical 57) 16. As price__, quantity demanded decreases and quantity supplies increases. a) Decreases b) Increases c) Remain constant d) becomes zero 58) When demand is perfectly elastic, the demand curve is, a)Steeper b) Linear ¢) Horizontal straight lined) Vertical 59) If cross elasticity of demand is negative, goods are__. a) Complementary _b) Substitutes c) Notrelated d) Competitive 60) A percentage change in quantity demanded divided by a percentage change in price is called a) Income elasticity of demand) Price elasticity of demand ©) Price elasticity of supply _) Elasticity of substitution 61) Ademand curve has a.......slope. a) Upward b) Positive c) Negative d) Concave 62) Normal goods have income elasticity of demand.a) Positive b) Negative c)Zero d) Low 63) An indifference curve analysis is applicable only to, goods. a) Substitute b) Complementary c.Giffen d. Capital 64) An indifference curve slopes from left to right. a) Upward —b) Downward ¢) Vertical) Horizontal 65) Price line shifted to left side or right side due to change in a) Consumer's income b) Prices of commodities c) Investments _d) Savings 66) Consumer surplus is equal to a) Total Utility - Price b) Total Utility - Total expenditure ©) Total utility - Marginal Utility d. Total utility ~ average utility 67) __=a¥/ax a)Axes b) Slope) Intercept. d) Function 68) The problem deals with the way in which output is distributed among the members of society. a) What to produce b) How to produce c) For whom to produce d) Full employment of resources 69) is a universal problem. a) Scarcity b)Underemployment —¢) Lack of investment d) Dissaving 70) Inflation is a state where price rises and value of money _. a) Rises b) Falls c) Remains constant —_d)Becomes zero 71) Central bank controlled inflation through which policy? a) Monetary policy b) Trade Policy c) Investment Policy d) EXIM Policy 72) Market structure depends upon following factors, except a) Number of sellers b) Nature of commodity c) Control over price d) Offers given by companies 73) Shift in demand is caused by changes in the. a) non-price factors b) price of a good alone c) cost of production d) raw material prices not a type of Marketing Concept. 74) Cross elasticity of demand is......for complementary goods. a) Positive b) Negative ¢) Zero) Greater than one 75) is the base of demand. a)Price b) Income c) Utility d) Quality