CA Foundation Compiler 2

CA FOUNDATION
COMPILER
Part-2
Paper-3 & Paper-4
(RTPs, MTPs and Past Papers)
PAPER-3: BUSINESS MATHEMATICS AND LOGICAL REASONING & STATISTICS
1. Ratio and Proportion, Indices, Logarithms ................................................... 1-6
2. Equations ..................................................................................................... 7-10
3. Linear Inequalities ...................................................................................... 11-12
4. Time Value of Money (MATHS OF FINANCE) ................................................ 13-22
5. Basic Concepts of Permutations and Combinations .................................... 23-26
6. Sequence and Series (AIRithmetic and Geometric Progressions) ............... 27-30
7. Sets, Functions and Relations ..................................................................... 31-34
-8. Basic Concepts of Differential and Integral Calculus ................................. 35-40
9. Number Series, Coding and Decoding and Odd Man Out ............................. 41-44
10. Direction Tests ............................................................................................ 45-48
11. Seating Arrangments ................................................................................... 49-54
12. Blood Realation ............................................................................................ 55-58
13. Statistical Description of Data ..................................................................... 59-64
14. Measures of Central Tendency and Dispersion ............................................ 65-72
15. Probability ................................................................................................... 73-78
16. Probability Distribution ................................................................................ 79-84
17. Correlation and Regression ......................................................................... 85-88
18. Index Number .............................................................................................. 89-94

PAPER-4: BUSINESS ECONOMICS AND BUSINESS AND COMMERCIAL
KNOWLEDGE
PAPER-4: PART-I: BUSINESS ECONOMICS
1. Nature & Scope of Business Economics ............................................................... 95-102
2. Theory of Demand and Supply .............................................................................. 103-116
3. Theory of Production and Cost.............................................................................. 117-130
4. Meaning and Types of Markets ............................................................................ 131-140
5. Business Cycle ..................................................................................................... 141-152
PAPER-4 PART-II: BUSINESS AND COMMERCIAL KNOWLEDGE
1. Business and Commercial Knowledge-An Introduction...................................... 153-158
2. Business Environment......................................................................................... 159-164
3. Business Organizations....................................................................................... 165-170
4. Government Policies for Business Growth.......................................................... 171-176
5. Organizations Facilitating Business................................................................... 177-182
6. Common Business Terminologies....................................................................... 183-189

PAPER-3: BUSINESS MATHEMATICS AND LOGICAL REASONING & STATISTICS
Chapter-1
Ratio and Proportion, Indices, Logarithms
Ratio and Proportion

MTP-March ‘20
1. The ratio of the prices of two houses was 16: 23. Two years later when the price of the first has increased
by 10% and that of the second by Rs. 477, the ratio of the prices becomes 11: 20. Find the original prices
of the two houses.
(a) Rs. 848, Rs. 1,219. (b) Rs. 838, Rs. 1,119.
(c) Rs. 828, Rs. 1,219. (d) Rs. 848 Rs. 1,229.
2. If a: b = 3: 4, the value of (2a+3b): (3a+4b) is
(a) 54: 25 (b) 8: 25 (c) 17: 24 (d) 18: 25
MTP-October ‘19
3. The ratio of the earnings of two persons 3:2. If each saves 1/5th of their earnings, the ratio of their
savings.
(a) 2:3 (b) 3:2 (c) 4:5 (d) 5:4
4. The Third Proportional to 15 and 20 is
(a) 80/3 (b) 80 (c) 80/7 (d) 120
5. If x+y, y+z, z+x are in the ratio 6:7:8 and x + y + z =14 then the value of x is
(a) 6 (b) 14/3 (c) 8 (d) 10
MTP-March ‘19
6. The ratio compounded of 2:3, 9:4, 5:6 and 8: 10 is
(a) 1: 1 (b) 1:5 (c) 3: 8 (d) none of these
7. The sub-triplicate ratio of 8: 27
(a) 27: 8 (b) 24: 81 (c) 2: 3 (d) none of these
p r p-r
8. If = = , the process is called
q s q-s
(a) Subtrahendo (b) Componendo (c) Alternendo (d) none of these
MTP-April ‘19
9. If x:y:z = 2: 3:5 if x+ y+ z = 60 ,then the value of z
(a) 30 (b) 15 (c) 9 (d) 12
10. The ratio of two numbers is 15: 19. If a certain number is added to each term of the ratio it become 8 :
9. What is the number added to each of the ratio?
(a) 6 (b) 15 (c) 17 (d) 23
Navkar Institute | CA Foundation | Paper 3: Business Maths and LR & Stats : Compiler 1
MTP-Oct ‘20
a b c 2a + 3b + 2c
11. If   then is
3 4 5 4a - b + 2c
11 17 14 19
(a) (b) (c) (d)
19 19 9 7
12. If x: y = 2: 3, then find (5x+2y): (3x-y)
(a) 13/3 (b) 16/3 (c) 19/3 (d) 7/3
13. A bag contains `187 in the form 1 rupee, 50 paise and 10 paise coins in the ratio 3:4:5. Find the number
of each type of coins.
(a) 102, 136, 170 (b) 136,102, 170 (c) 170, 102, 136 (d) none
14. The ratio of the speed of the two trains is 2: 5. If the distances they travel are in the ratio 5: 9, find the
ratio of times taken by them.
(a) 2: 9 (b) 18: 25 (c) 25: 18 (d) 10: 45
MTP-March ‘21
15. Two numbers are in the ratio 7: 8 if 3 is added to each of them, their ratio becomes 8:9, the numbers are
(a) 14, 16 (b) 24, 27 (c) 21, 24 (d) 16, 18
16. Which of the numbers are not in proportions?
(a) 6,8,5,7 (b) 7.3,14,6 (c) 18,27,12,18 (d) 8,6,12, 9
MTP-March’22
17. If A: B = 2:5, then (10A + 3B): (5A + 2B) is equal to

(a) 7:4 (b) 7:3 (c) 6:5 (d) 7:9
18. The ratio compounded of 4:5 and sub-duplicate of a:9 is 8:15. Then value of “a” is
(a) 2 (b) 3 (c) 4 (d) 5
19. If 1/2 , 1/3 ,1/5 and 1/x are in proportion , then the value of x will be
(a) 15/2 (b) 6/5 (c) 10/3 (d) 5/6
20. Fourth proportional to x, 2x, (x+1) is:
(a) (x+2) (b) (x-2) (c) (2x+2) (d) (2x-2)
3x -2
21. If is the duplicate ratio of 2/3 then the value of ‘x ‘ is
5x - 6
(a) 2 (b) 6 (c) 5 (d) 9
MTP-Oct’21
1 1 1 1
22. If x: y = 3:5, then find  +  :  - 
x Y x y
(a) 2 (b) 4 (c) 6 (d) 8
2 Chapter 1 : Ratio and Proportion, Indices, Logarithms

23. if A: B = 3:5 and B:C= 5:4 , C:D = 2:3 and D is 50% more than E, find the ratio between A and E
(a) 2:3 (b) 3:4 (c) 3:5 (d) 4:5
MTP-Nov’21
24. The salaries of A, B and C are of ratio 2:3:5. if the increments of 15%, 10% and 20% are done their
respective salaries, then find new salaries.
(a) 23: 33: 60 (b) 33:23:60 (c) 23: 60:33 (d) 33: 60: 23
25. If A : B = 5:3, B : C = 6 : 7 and C : D = 14:9 then the value of A: B:C:D
(a) 20:14:12:9 (b) 20:9:12:14 (c) 20:9:14:12 (d) 20:12:14:9
26. The salary of P is 25% lower than that of Q and the salary of R is 20% higher than Q , the ratio of salary of
R and P will be :
(a) 5:8 (b) 8:5 (c) 5:3 (d) 3:5
Indices
MTP-March ‘20
27. 516+ 1255 is divisible by which of the following
(a) 5 (b) 6 (c) 8 (d) 9
MTP-October ‘19
1 1
28. If 2x=3y=6z then + =
x y
1 1 1 1 1
(a) (b) + (c) + (d) 0
z z x z x
MTP-March, ‘19
(a2  abb2 ) (b2 bc c2 ) ( c2 ca a2 )

 xa   xb   xc 
29. The value of  b   c   a 
x  x  x 
(a) 1 (b) 0 (c) -1 (d) none of these
30. If x = 51/3 + 5- 1/3 , 5x3 -15x is given by

(a) 25 (b) 26 (c) 27 (d) 30
Navkar Institute | CA Foundation | Paper 3 : Business Maths and LR & Stats : Compiler 3
MTP April, ‘19
2n + 2n-1
31. Simplify n+1 n =
2 +2
1
(a) 2n+2 (b) 2n (c) 2 (d)
2
1 1
32. If. 2a = 3b = 12c then + =
a b
1 1 1 1

(a) (b) c a (c) - (d) 0
c c
MTP-Oct ‘20
33. if X = 3 1/4 + 3 -1/4 and Y = 31/4 - 3-1/4 , then the value of 3(x2 + y2)2 will be
(a) 12 (b) 18 (c) 46 (d) 64
MTP-March ‘21
2n + 2n-1
34. The value of n+1 n is
2 -2
(a) 1/2 (b) 3/2 (c) 2/3 (d) 2
35. If 3x =5y = 75z then
2 1 1 1 2 1 2 1 1
(a) x+y-z= 0 (b)   (c)   (d)  
x y z x y z x z y
Logarithms
MTP-October ‘19
3
36. If log 9X + log3 X = then x is
2
9
(a) 0 (b) 1 (c) (d) 3
4
MTP-March ‘19
37. If a = log24 12 , b = log36 24 , b = log48 36 then prove that 1 + abc =

(a) 2bc (b) 2ca (c) 2ba (d) 3bc

MTP-April ‘19
38. The value of log 64512 is
(a) 9 (b) 9/2 (c) 9/4 (d) 3/2
MTP-Oct ‘20
39. The value of (log b

a log c b log a c)3 =
(a) 1 (b) 3 (c) (log b C)3 (d) (log c b)3
40. loge x + log(1+x) = 0 is equivalent to
(a) x2+x+e = 0 (b) x2+x- e = 0 (c) x2+x+1 = 0 (d) x2+x-1 = 0
MTP-March ‘21
1
41. If x2 + y2 = 7xy, the log (x + y) is
3
(a) (logx + logy) (b) ½(logx + logy) (c) 1/3(logx+logy) (d) 3(logx/logy)
MTP-March’22
3 2
42.


 
Find the value of log10 25 -log10 2 +log10  4  

(a) x (b) 10 (c) 1 (d) None
MTP-Oct’21
Xn yn Zn
43. Find the value of log n + log n +log n
y z X
(a) -1 (b) 0 (c) 1 (d) 2
ANSWER KEYS
1 (a) 2 (d) 3 (b) 4 (a)
5 (b) 6 (a) 7 (c) 8 (a)
9 (a) 10 (c) 11 (c) 12 (b)
13 (a) 14 (c) 15 (c) 16 (a)
17 (a) 18 (c) 19 (a) 20 (c)
21 (b) 22 (b) 23 (b) 24 (a)
25 (d) 26 (b) 27 (b) 28 (a)
29 (a) 30 (b) 31 (d) 32 (b)
33 (d) 34 (b) 35 (c) 36 (d)
37 (a) 38 (d) 39 (a) 40 (d)
41 (b) 42 (c) 43 (b)


Chapter-2
Equations
MTP-March ‘20
1. The sum of two numbers is 62 and their product is 960. The sum of their reciprocals is
31 29 61 41
(a) (b) (c) (d)
480 480 960 960
2. Three persons Mr. Roy, Mr. Paul and Mr. Singh together have Rs. 51. Mr. Paul has Rs. 4less than Mr. Roy
and Mr. Singh has got Rs. 5 less than Mr. Roy. They have the money as.
(a) (Rs. 20, Rs. 16, Rs. 15) (b) (Rs. 15, Rs. 20, Rs. 16)
(c) (Rs. 25, Rs. 11, Rs. 15) (d) none of these
3. The roots of the quadratic equation x2-4x+k = 0 are coincident if
(a) k=4 (b) k = 3 (c) k = 2 (d) k = 1
4. The wages of 8 men and 6 boys amount to Rs. 33. If 4 men earn Rs. 4.50 more than 5 boys determine the
wages of each man and boy.
(a) (Rs. 1.50, Rs. 3) (b) (Rs. 3, Rs. 1.50)
(c) (Rs. 2.50, Rs. 2) (d) (Rs. 2, Rs. 2.50)
2
5. The roots of the equation x + (2p–1)x + p= 0 are real if.
(a) p>1 (b) p < 4 (c) p > 1/4 (d) p < ¼
MTP-October ‘19
6. 5 chairs and 3 tables cost of Rs.350. and 3 Chairs and 5 tables cost Rs.370. What is the cost of the table
and two chairs?
(a) Rs.130 (b) Rs. 120 (c) Rs.150 (d) Rs.140
7. If one root of the quadratic equation is 2+ 3 , the equation is ________
(a) x2-4x +1 =0 (b) x2+4x+1=0 (c) x2-4x-1=0 (d) None of these
8. If thrice of A’s age 6 years ago be subtracted from twice his present age, the result would be equal to his
present age. Find A’s Age
(a) 9 (b) 8 (c) 10 (d) 12
MTP-March ‘19
9. Ten years ago the age of a father was four times his son. Ten years hence the age of the father will be
twice that of his son. T he present age of the father and the son are
(a) (50, 20) (b) (60, 20) (c) (55, 25) (d) none of these
1
10. When two roots of quadratic equations are  and then what will be quadratic equation.

(a) a x2 -(a2 +1) x + a = 0 (b) ax2 - a2 x + a = 0
(c) a x2 + (a2 +1) x + a = 0 (d) none of these
 2 2 
11. Let  and ß be the roots of equation x + 7x + 12 = 0. T hen the value of      will be
2
 
 49 144   7 12 
(a)  +  (b)  + 
 144 49   12 7 
 91 
(c) -  (d) none of these
 12 
MTP-April ‘19
12. If  and  be the roots of the equation 2x2 -4x-3=0 the value of  2 +  2 is
(a) 5 (b) 7 (c) 3 (d) -4
13. If one root of the equation x2 + 7x+ p = 0 be reciprocal of the other then the value of p is________.
(a) 1 (b) -1 (c) 7 (d) -7
14. If 2x -3y = 1 and 5x +2y = 50, then what is the value of (x-2y)?
(a) -2 (b) 6 (c) 7 (d) 10
MTP-Oct ‘20
15. The cost of 5 mangoes is equal to the cost of 20 oranges. If the total cost 2 mangoes and 10 oranges is `
22.50, find the cost of two oranges.
(a) ` 1.25 (b) ` 2.50 (c) ` 3 (d) ` 3.50
16. The roots of the quadratic equation 9x2+ 3kx + 4 = 0 are equal if
(a) k=+2 (b) k = + 3 (c) k = + 4 (d) k = + 5
17. If one root of a equation is 2 + 5 , then the quadratic equation is _____

(a) x2+ 4x- 1 = 0 (b) x2- 4x- 1 = 0 (c) x2 + 4x + 1 = 0 (d) x2 -4x + 1 = 0
18. A man sells 6 radios and 4 televisions for ` 18,480. If 14 radios and 2 televisions are sold for the same
amount. What is the price of radio?
(a) ` 1848 (b) ` 840 (c) ` 1680 (d) ` 3360
MTP-March ‘21
19. The value of 6  6  6  ....... is

(a) -3 (b) 2 (c) 3 (d) 4
2
20. If one root of the equation x – 3x + k = 0 is 2, then value of k will be
(a) -10 (b) 0 (c) 2 (d) 10
8 Chapter 2 : Equations
21. If arithmetic mean between roots of a quadratic equation is 8 and the geometric mean between them
is 5, the equation is _______
(a) x2 – 16x - 25 = 0 (b) x2 – 16x + 25 = 0
(c) x2 +16x + 25 = 0 (d) None of these
MTP-March ‘22
22. Roots of the equation 2x2+3x+7=0 are  and  then the value of   -1 +   -1 is
(a) 2 (b) 3/7
(c) 7/2 (d) -19/14
MTP-Oct’21
x +1 x 3
23. Given the Quadratic Equation - =
x X +1 2
(a) 1 and -2/3 (b) -1 and 2/3
(c) -1 and -2/3 (d) 1 and 2/3
24. The roots of equation 9x+2 – 6.3 x+1 + 1 = 0 are
(a) -2 (b) 2 (c) 2 (d) 0
2
25. The roots of the equation X - X + 1 = 0 are
(a) Imaginary and unequal (b) Real and unequal
(c) Real and equal (d) Imaginary and equal
25 x
26. If 1+ =1+ , then x is
144 12
(a) 1 (b) 2 (c) 3 (d) 0
MTP-Nov’21
27. The cab bill is partly fixed and partly varies on the distance covered. For 456 km the bill is Rs. 8252, for
484 km the bill is Rs. 8728. What will the bill be for 500km?
(a) Rs. 8876 (b) Rs.9156 (c) Rs.9472 (d) Rs.9000
28. (x + 4) is a factor of x4 + 4x3 - ax2 – bx + 24. Also, a + b = 29. Find the value of b.
(a) 7 (b) 16 (c) 22 (d) 13
29. X and Y have their present ages in the ratio 6:7. 14 years ago, the ratio of the ages of the two was 4:5.
What will be the ratio of their ages 21 years from now?
(a) 7: 11 (b) 9: 10 (c) 8: 11 (d) 11: 13
30. The equation 3x2 + mx + n = 0 has roots that are double that of the equation x2 + 10x + 12 = 0. What is the
value of m + n?
(a) 104 (b) 204 (c) 102 (d) 202
31. What is the smallest integral value of n for which n3 + 7n2 – 50n – 336 > 0
(a) 8 (b) 6 (c) 7 (d) None
32. If  and  are the roots of the equation x2+7x+12 =0, then the equation whose roots (  +  )2 and (  -
 )2 will be
(a) x2-14x+49 = 0 (b) x2-24x+144 = 0 (c) x2-50x+49 = 0 (d) x2-19x+49 = 0
33. The value of ‘k ‘for system of equations kx+2y = 5 and 3x+y = 1 has no solution is:
(a) 5 (b) 2/3 (c) 6 (d) 3/2
34. If X3 = 27 , then x is equal to:
(a) 1 (b) 3 (c) 5 (d) 10
ANSWER KEYS
1 (a) 2 (a) 3 (a) 4 (b)
5 (d) 6 (a) 7 (a) 8 (a)
9 (a) 10 (a) 11 (c) 12 (b)
13 (a) 14 (a) 15 (b) 16 (c)
17 (b) 18 (b) 19 (c) 20 (c)
21 (b) 22 (d) 23 (a) 24 (a)
25 (a) 26 (a) 27 (d) 28 (c)
29 (b) 30 (b) 31 (a) 32 (c)
33 (c) 34 (b)

10 Chapter 2 : Equations
Chapter-3
Linear Inequalities
MTP-March ‘20
1. On solving the inequalities 2x +5y <20,3x +2y <12, x < 0, y < 0, we get the following situation
(a) (0, 0), (0, 4), (4, 0) and (20/11, 36/11) (b) (0, 0), (10, 0), (0, 6) and (20/11,36/11)
(c) (0, 0), (0, 4), (4, 0) and (2, 3) (d) (0, 0), (10, 0), (0, 6) and (2, 3)
2. On the average experienced person does 5 units of work while a fresh one 3 units of work daily but the
employer has to maintain an output of at least 30 units of work per day. This situation can be expressed
as,
(a) 5x + 3y < 30 (b) 5x + 3y > 30
(c) 5x+3y > 30 x >0, y > 0 (d) none of these
MTP-October ‘19
3. The solution set of the in equation x +2 > 0 and 2x – 6 > 0 is
(a)  -2,  (b)  3,  (c)  ,2 (d)   ,-2 
4. A company produces two products A and B, each of which requires processing in two machines. The
first machine can be used at most for 60 hours, the second machine can be used at most for 40 hours.
The product A requires 2 hours on machine one and one hour on machine two. The product B requires
one hour on machine one and two hours on machine two. Express above situation using linear
inequalities.
(a) 2x + y < 60 and x + 2y > 2 and x > 0, y > 0. (b) 2x + y > 60 and x + 2y > 2 and x > 0, y > 0.
(c) 2x + y < 60 and x + 2y < 2 and x > 0, y > 0. (d) 2x + y > 60 and x + 2y < 2 and x > 0, y > 0.
MTP-March ‘19
5. On solving the inequalities 5x + y = < 100, x + y < 60, x > 0 and y > 0, we get the following situation.
(a) (0, 0), (20, 0), (10, 50) and (0,60) (b) (0, 0), (60, 0), (10, 50) and (0,60)
(c) (0, 0), (20, 0), (0, 100) and (10,50) (d) none of these
MTP-Oct ‘20
6. The solution set of the equations x+2 > 0 and 2x -6 > 0 is
(a) (-2,  ) (b) (3,  ) (c) (-  , -2) (d) (-  , -3)
7. The solution space of the inequalities 2x +y < 10 and x-y < 5 :
(i) includes origin (ii) includes the point (4,3)
Which one is correct?
(a) Only (i) (b) only (ii) (c) Both (i) and (ii) (d) None
MTP-March ‘21
(5  2 x) x
8. The solution of the inequality < -5 is
3 6
(a) x>8 (b) x < 8 (c) x = 8 (d) None of these
9. On the average, experienced person does 5 units of work while a fresh one 3 units work daily but the
employer have to maintain the output of atleast 30 units of work per day. The situation can be expressed
as.
(a) 5x + 3y < 30 (b) 5x + 3y > 30 (c) 5x + 3y = 30 (d) None of these
MTP-March’22
10. On solving the inequalities 5x + y < 100, x + y < 60, x > 0, y > 0, we get the following situation:
(a) (0,0), (20,0), (10,50), & (0,60) (b) (0,0), (60,0), (10,50), & (0,60)
(c) (0,0), (20,0), (0,100) & (10,50) (d) none of these
11. The rules and regulations demand that the employer should employ not more than 5 experienced
hands to 1 fresh one and this fact is represented by (Taking experienced person as x and fresh person
as y)
x
(a) y> (b) 5y < x (c) 5y = x (d) none of these
5
MTP-Oct’21
12. A dealer has only ` 5760 to invest in fans (x) and sewing machines (y). The cost per unit of fan and
sewing machine is ` 360 and ` 240 respectively. This can be shown by:
(a) 360x + 240y > 5760 (b) 360x + 240y < 5760
(c) 360x + 240y = 5760 (d) none of these
13. The point of intersection between the lines 3x+ 4y = 7 and 4x –y = 3 lie in the
(a) 1st quadrant. (b) 2nd quadrant. (c) 3rd quadrant (d) 4th quadrant.
MTP-Nov’21
14. On the average, experienced person does 5 units of work while a fresh one 3 units of work daily, but
the employer have to maintain the output at least 30 units of work per day. The situation can be
expressed as
(a) 5x+3y<30 (b) 5x+3y>30 (c) 5x+3y = 30 (d) None
ANSWER KEYS
1 (a) 2 (c) 3 (b) 4 (a)
5 (a) 6 (b) 7 (a) 8 (a)
9 (b) 10 (a) 11 (a) 12 (b)
13 (a) 14 (b)

12 Chapter 3 : Linear Inequalities
Chapter-4
Time Value of Money (Maths of Finance)
MTP-March ‘20
1. A sum of Rs. 46,875 was lent out at simple interest and at the end of 1 year 8months the total amount
was Rs. 50,000. Find the rate of interest percent per annum.
(a) 5% (b) 6% (c) 4% (d) 8%
2. A = Rs. 5,200, R = 5% p.a., T = 6 years, P will be
(a) Rs. 2,000 (b) Rs. 3,880 (c) Rs. 3,000 (d) none of these
3. The time by which a sum of money would treble itself at 8% p. a C. I is
(a) 14.28 years (b) 14 years (c) 12 years (d) none of these.
4. The present value of an annuity of Rs. 80 for 20 years at 5% p.a is [Given (1.05)20= 2.6533]
(a) Rs. 997 (appx.) (b) Rs. 900 (c) Rs. 1,000 (d) none of these
5. A person bought a house paying Rs. 20,000 cash down and Rs. 4,000 at the end of each year for 25 yrs. at
5% p.a. C.I. The cash down price is[ Given (1.05)25= 3.386355]
(a) Rs. 75,000 (b) Rs. 76,000 (c) Rs. 76,375.80 (d) none of these.
6. A man purchased a house valued at Rs. 3,00,000. He paid Rs. 2,00,000 at the time of purchase and agreed
to pay the balance with interest at 12% per annum compounded half yearly in 20 equal half yearly
instalments. If the first instalment is paid after six months from the date of purchase then the amount
of each instalment is.
(a) Rs. 8,718.45 (b) Rs. 8,769.21 (c) Rs. 7,893.13 (d) none of these
7. A person desires to create a fund to be invested at 10% CI per annum to provide for a prize of Rs. 300
every year. Using V = a/I find V and V will be
(a) Rs. 2,000 (b) Rs. 2,500 (c) Rs. 3,000 (d) none of these.
8. A person invests Rs. 500 at the end of each year with a bank which pays interest at 10% p.a C.I. annually.
The amount standing to his credit one year after he has made his yearly investment for the 12th time
is.[Given (1.1)12= 3.1384]
(a) Rs. 11,761.36 (b) Rs. 10,000 (c) Rs. 12,000 (d) none of these
9. A machine depreciates at 10% of its value at the beginning of a year. The cost and scrap value realized
at the time of sale being Rs. 23,240 and Rs. 9,000 respectively. For how many years the machine was put
to use?
(a) 7 years (b) 8 years (c) 9 years (d) 10 years
10. The compound interest on half-yearly rests on Rs. 10,000 the rate for the first and second years being
6% and for the third year 9% p.a. is
(a) Rs.2,200 (b) Rs.2,287 (c) Rs. 2,285 (d) Rs.2290.84
11. The present value of Rs. 10,000 due in 2 years at 5% p.a. compound interest when the interest is paid on
half-yearly basis is
(a) Rs. 9,070 (b) Rs. 9,069 (c) Rs. 9,060 (d) None
12. The effective rate of interest corresponding to a nominal rate 3% p.a payable half yearly is
(a) 3.2% p.a (b) 3.25% p.a (c) 3.0225% p.a (d) none of these
MTP-October ‘19
13. Rs. 1000 is invested at annual rate of interest of 10% p.a. The amount after two years if compounding is
done annually is ______
(a) Rs. 121 (b) Rs. 1210 (c) Rs. 2110 (d) None of these
14. If A person invests Rs.3,000 in a three years’ investment that pays you 12% per annum. Calculate the
future value of the investment.
(a) Rs.4214.78 (b) Rs. 4124.78 (c) Rs.4324.48 (d) Rs.4526.48
15. A person deposited a sum of Rs. 10,000 in a bank. After 2 years, he withdrew Rs. 4,000 and at the end of
5 years, he received an amount of Rs. 7,900; then the rate of simple interest is:
(a) 6% (b) 5% (c) 10% (d) None of these
16. A company is considering proposal of purchasing a machine either by making full payment of Rs.4000 or
by leasing it for four years at an annual rate of Rs.1250. Which course of action is preferable if the
company can borrow money at 14% compounded annually? [P (4,0.14) = 2.9137]
(a) leasing is not preferable (b) leasing is preferable
(c) cannot determined (d) none of these
17. Anil bought a motor cycle costing Rs.1,30,000 by making a down payment of Rs.30, 000 and agreeing to
make equal annual payment for five years. How much would be each payment if the interest on unpaid
amount be 10% compounded annually? [ P (5, 0.10) = 3.7908]
(a) Rs.28379.70 (b) Rs.26300.70 (c) Rs.26500.70 (d) Rs.26379.70
18. Shoba borrows Rs.50,00,000 to buy a house. If he pays equal instalments for 20 years and 10% interest
on outstanding balance, what will be the equal annual instalment? [Given : P(20,0.10) =8.51356]
(a) Rs.687298.4 (b) Rs.685298.4 (c) Rs.585298.4 (d) Rs.587298.4
19. A trust fund has invested Rs. 30,000 in two different types of bonds which pays 5% and 7% interest
respectively. Determine how much amount is invested in 2nd type of bond if trust obtains an annual
total interest of Rs. 1600.
(a) Rs.5000 (b) Rs.6000 (c) Rs.7000 (d) Rs. 8000
20. An overdraft of Rs. 50,000 to be paid back in equal annual installments over a period of 20 years. Find
the value of Installment, if interest is compounded annually at 14% per annum. [Given (1.14)20= 13.74349]
(a) Rs .7550.50 (b) Rs .7549.30 (c) Rs .7559.50 (d) Rs .7560.50
21. At six months’ intervals A deposited of Rs. 1000 in a savings account which credit interest at 10% p.a.,
compounded semi-annually. The first deposit was made when A’s son was 6 months old and last deposit
was made when his son was 8 years old. The money remained in the account and was presented to the
son on his 10th birthday. How much did he receive? (1.05)16 = 2.1829)
(a) Rs.25740 (b) Rs.28756 (c) Rs.25860 (d) Rs.25760
22. What is the effective rate of interest if the nominal rate 5 % p.a converted quarterly?
(a) 6.09 % (b) 5.09 % (c) 5.55% (d) 5.60 %
23. A sum of money doubles itself at compound interest in 10 years. In how many years will it become
eight times?
(a) 20 (b) 30 (c) 40 (d) 35
14 Chapter 4 : Time Value of Money (MATHS OF FINANCE)
24. Certain sum of money borrowed at simple interest amount to Rs.2688 in three years and to Rs.2784 in
four years at the rate per annum equal to
(a) 7 % (b) 6% (c) 5% (d) 4%
MTP-March ‘19
25. A certain money doubles itself in 10 years when deposited on simple interest. It would triple itself in
26. A man deposited Rs. 8, 000 in a bank for 3 years at 5% per annum compound interest, after 3 years he
will get
(a) Rs. 9,000 (b) Rs.8, 800 (c) Rs. 9,200 (d) Rs. 9261
27. The effective rate of interest for one year corresponding to a nominal at 7% rate of interest per annum
convertible quarterly is
(a) 7.1% (b) 7.2% (c) 7.25% (d) 7.18%
28. The value of furniture depreciates by 10% a year, if the present valu e of the furniture in an office is Rs.
21870, calculate the value of furniture 3 years ago.
(a) Rs. 30,000 (b) Rs. 35,000 (c) Rs. 40,000 (d) Rs. 45,000
29. The population of a town increases every year by 2 % of the population beginning of that year. T he
number of years by which the total increase of population be 40% is
(a) 7 years (b) 10 years (c) 17 years (approximately)
(d) none of these
30. Find the future value of an annuity of Rs. 500 made annually for 7 years at interest rate of 14 % per
annum [ Given that (1.14)7 = 2. 5023]
(a) Rs. 5365.35 (b) Rs. 5000 (c) Rs. 5325.65 (d) Rs.6000.35
31. Rs. 200 invested at the end of each month in an account paying interest 6% per year compounded
monthly.
What is the future value of this annuity after 10th payment? [ Given that (1.005)10 = 1.0511]
(a) Rs. 2045 (b) Rs.5055 (c) Rs.2044 (d) Rs.2065
32. Suppose your father decides to gift you Rs. 10,000 every year starting from today for the next five years,
you deposit this amount in a bank as and when you receive and get 10% per annum interest rate
compounded annually. What is the present value of this annuity? ( P(4, 0.10) = 3.16987)
(a) Rs.41,698.70 (b) Rs.45,698.70 (c) Rs.42, 698.70 (d) Rs.43, 698.70
33. Nominal Rate of Return =
(a) Real Rate of Return – Inflation (b) Real Rate of Return + Inflation
(c) Inflati on -Real Rate of return (d) None of the above
34. Net Present Value (NPV)
(a) Present value of net cash Inflow – Total net Investment
(b) Present value of net cash Inflow – Present value of cash outflow
(c) Total net Investment- Present value of net cash Inflow
(d) a or b
35. The annual birth rates per 1,000 are 39.4 and 19.4 respectively. T he number of years which the population
will be doubled assuming there is no immigration or emigration is
(a) 35 years (b) 30 years (c) 25 years (d) none of these
36. Y bought Motor Bike Costing 80,000 by making down payment of Rs. 30000 and agreeing to make annual
payment for four years. How much would be each payment if the interest on unpaid amount be 14%
compounded annually. [Given P (4, 0.14) = 2.91371]
(a) Rs. 17160.25 (b) Rs. 17600.25 (c) Rs.15600.25 (d) Rs. 16600.25
MTP-April ‘19
37. Mr. A plans to invest up to Rs. 30,000 in two stocks X and Y. Stock X(x) is priced at Rs.175 and Stock Y(y)
at Rs.95 per share. T his can be shown by
(a) 175x + 95y < 30,000 (b) 175x + 95y > 30,000
(c) 175x + 95y = 30,000 (d) None of these
38. A sum of money doubles itself at compounded interest in 10 years in how many years will it becomes
eight times?
(a) 20 (b) 30 (c) 40 (d) 35
39. A machine costs Rs .1,00, 000. The depreciation rate is 10% per annum. The scrap value of the machine
at the end of 5 years is
(a) Rs.49490 (b) Rs. 59049 (c) Rs.61029 (d) Rs.51049
40. Rs. 10,000 is invested at annual rate of interest of 10% p.a. The amount after two years at annual
compounding is
(a) Rs. 21100 (b) Rs. 12100 (c) Rs. 12110 (d) None of these
41. The annual birth rate and death rate per 1000 are 39.4 and 19.4 respectively. The number of years in
which population will be doubled assuming that there is no immigration or emigration is approximately
42. If the effective rate of interest is 12% per annum and the interest is compounded quarterly, the nominal
rate of interest per annum
(a) 11.78 % (b) 11.21 % (c) 11.89% (d) 11.49 %
43. A machine can be purchased for Rs. 50, 000. Machine will be contributing Rs. 12, 000 per year for the
next five years. Assuming borrowing cost is 10% per annum. Determine whether machine should be
purchased or not
(a) Should be purchased (b) Should not be purchased
(c) Can’t say about purchase (d) none of the above
44. X bought a T V costing 25,000 making down payment of Rs. 5000 and agreeing to make equal annual
payment for four years. How much would be each payment if the interest on unpaid amount be 14%
compounded annually? [P(4, 0.14) = 2.91371]
(a) Rs.6864.10 (b) Rs.6850.63 (c) Rs.6859 (d) Rs.6871
45. The future value of annuity on Rs. 5000 a year for 7 years at 14% per annum compound interest is given
(1.14)7 = 2.5023
(a) Rs.5300 (b) Rs.53653.57 (c) Rs.5480 (d) Rs.5465.23
46. Rs.5000 paid for ten years to off a loan. What is the loan amount if interest rate be 14% per annum
compounded annually? (Given P (10, 0.14) = 5.21611
(a) Rs.26080.55 (b) Rs.26580.55 (c) Rs.26280.55 (d) Rs.27080.55
47. Suppope your friend decided gift to you Rs. 10000 every year starting from today for the next five years.
Your deposit this amount in a bank as and when you receive and get 10% per annum interest compounded
annually. What is the present value of this annuity?
(a) Rs.42698.70 (b) Rs.43698.70 (c) Rs.45698.70 (d) Rs.41698.70
16 Chapter 4 : Time Value of Money (Maths of Finance)

48. Rs.1000 is invested at the end of each month in an account paying interest 6% per year compounded
monthly. What is the future value of annuity after 10th payment? (Given that (1.005)10 = 1.0511)
(a) Rs.10220 (b) Rs.1022 (c) Rs.20000 (d) Rs.1020
49. The difference between CI and SI on a certain money invested for three years at 6% per annum is Rs.
110.16. T he sum is
(a) Rs. 3000 (b) Rs.3700 (c) Rs.12000 (d) Rs.10000
50. Simple interest on Rs.3500 for 3 years at 12% per annum is
(a) Rs.1200 (b) Rs.1260 (c) Rs.2260 (d) Rs. 2000
MTP-Oct ‘20
51. A sum of money triples itself in 18 years under simple interest. what is the rate of interest per annum?
(a) 9 % (b) 9.09 % (c) 11.11 % (d) 13%
52. What time will be required for a sum of money to double itself at 8 % Simple interest?
(a) 8 Years (b) 8.5 Years (c) 12.5 Years (d) 12 Years
53. The difference between simple interest and compound interest on a sum of ` 6,00,000 for two years is
` 6000. What is the annual rate of interest?
(a) 8 % (b) 10 % (c) 6 % (d) 12 %
54. What is the sum of money will amount to ` 11035.50 in four years at compound interest for 1st , 2nd ,
3rd and 4th years being 4% , 3% , 2% and 1% respectively.
(a) ` 10,000 (b) ` 11,000 (c) ` 1035 (d) ` 11,305
55. Find the present value of ` 10,000 to be required after 5 years, if the interest rate be 9 per cent
compounded annually (Given: (1.09) -5= 0.65)
(a) ` 5500 (b) ` 5600 (c) ` 6000 (d) ` 6500
56. A Machine was purchased for ` 10,000. Its rate of depreciation is 10% in the first year and 5 % per annum
afterwards. Find the depreciated value of Machine after 7 years of purchase (Given (0.95)6= 0.7351)
(a) ` 6606 (b) ` 6616 (c) ` 6660 (d) ` 6661
57. A company is considering proposal of purchasing a machine either by making full payment of `4,000 or
by leasing it for 4 years at an annual rent of `1250. Which course of action is preferable? if the company
can borrow money at 14 % per annum? [ Given: (1.14)4= 1.6870]
(a) Leasing preferable (b) Leasing is not preferable
(c) can’t say (d) none of these
58. A man borrows `4000 from a bank at 10% compound interest. At the end of every year ` 1,500 as part of
repayment of loan and interest. How much is still owe to the bank after three such instalments [Given:
(1.1)3 = 1.331]
(a) ` 359 (b) ` 820 (c) ` 724 (d) ` 720.
59. The effective rate of interest for one-year deposit corresponding to a nominal 7 % rate of interest per
annum convertible quarterly. is
(a) 7 % (b) 7.5 (c) 7.4 % (d) 7.18 %
60. The future value of annuity of `1,000, made annually for 5 years at the interest of 14% compounded
annually is (Given (1.14)5= 1.925410)
(a) ` 5610 (b) ` 6610 (c) ` 6160 (d) ` 6160
61. What will be the population after three years when present population is `25,000 and population
increases at the rate of 3 % in first year, 4 % in second year and 5 % in third year?
(a) 28119 (b) 29118 (c) 27000 (d) 30000
62. SI = 0.125 P at 10% p.a find the time
(a) 1.25 years Q (b) 25 Years (c) 0.25 Years (d) none
MTP-March ‘21
63. Rs. 8,000 becomes Rs. 10,000 in two years at simple interest. The amount that will become Rs. 6,875 in
3 years at the same rate of interest is:
(a) Rs. 4,850 (b) Rs. 5,000 (c) Rs. 5,500 (d) Rs. 5,275
64. The difference between the simple and compound interest on a certain sum for 3 year at 5% p.a. is Rs.
228.75. The compound interest on the sum for 2 years at 5% p.a. is:
(a) Rs. 3,175 (b) Rs. 3,075 (c) Rs. 3,275 (d) Rs. 2,975
65. A sum of money doubles itself in 10 years. The number of years it would treble itself is:
(a) 25 years (b) 15 years (c) 20 years (d) None
66. The effective rate equivalent to nominal rate of 6% compounded monthly is:
(a) 6.05 (b) 6.17 (c) 6.26 (d) 6.07
67. A person borrows Rs. 5,000 for 2 years at 4% p.a. simple interest. He immediately lends to another
1
person at 6- % p.a. for 2 years. Find his gain in the transaction per year:
4
(a) Rs. 112.50 (b) Rs. 125 (c) Rs. 225 (d) Rs. 167.50
68. Future value of an ordinary annuity
 (1+ i)n -1   (1+ i)n +1 

(a) A (n, i) = A  i
 (b) A (n, i) = A  i

   
 1-(1+ i)n   (1+ i)n  1 

(c) A (n, i) = A  i
 (d) A (n, i) = A  i (1+ i)n 
   
69. The cost of machinery is Rs. 1,25,000/- if its useful life is estimated to be 20 years and the rate of
depreciation of its cost is 10% p.a., then the scrap value of the Machinery is [given that (0.9)20 =
0.12158]
(a) 15,197 (b) 15,400 (c) 15,300 (d) 15,250
70. If A person invests Rs.5,000 in a three years’ investment that pays you 12% per annum. Calculate the
future value of the investment.
(a) Rs.7024.64 (b) Rs. 7124.78 (c) Rs.7324.48 (d) Rs.7526.48
71. A company is considering proposal of purchasing a machine either by making full payment of Rs.4000 or
by leasing it for four years at an annual rate of Rs.1250. Which course of action is preferable if the
company can borrow money at 14% compounded annually? [ P (4,0.14) = 2.9137]
(a) leasing is not preferable (b) leasing is preferable
(c) Cannot determined (d) none of these
72. Anil bought a motor cycle costing Rs.1,50,000 by making a down payment of Rs.50, 000 and agreeing to
make equal annual payment for five years. How much would be each payment if the interest on unpaid
amount be 10% compounded annually? [ P (5, 0.10) = 3.7908]

(a) Rs.26379.66 (b) Rs.26300.70 (c) Rs.26500.70 (d) Rs.26370.70
73. Shoba borrows Rs.50,00,000 to buy a house. If he pays equal instalments for 20 years and 10% interest
on outstanding balance, what will be the equal annual instalment?
[Given : P(20,0.10) =8.51356 ]
(a) Rs.687298.4 (b) Rs.685298.4 (c) Rs.585298.4 (d) Rs.587298.4
74. How much money is to be invested every year so to accumulate Rs. 3,00,000 at the end of 10 years if
interest is compounded annually at 10% [ A (10,0.1) = 15.9374)
(a) Rs.18823.65 (b) Rs.18833.64 (c) Rs.18223.60 (d) Rs.16823.65
MTP-March’22
75. In what time will be a sum of money doubles itself at 6.25% p.a simple interest ?
76. Mr. X invests ` 10,000 every year starting from today for next 10 years suppose interest rate is 8% per
annum compounded annually. Calculate future value of the annuity: (Given that (1+0.08)10 = 2.158925]
(a) ` 156454.88 (b) ` 144865.625 (c) ` 156554.88 (d) none of these
77. The difference between the simple and compound interest on a certain of 3 years at 5% p.a is ` 228.75.
The compound interest on the sum of for 2 years at 5% per annum is
(a) ` 3175 (b) ` 3075 (c) ` 3275 (d) ` 2975
78. How much time would the simple interest on a certain sum be 0.125 times the principal at 10% per
annum
1 3 1 3
(a) 1 Yearss (b) 1 Yearss (c) 2 Yearss (d) 2 Yearss
4 4 4 4
79. The time in by which a sum of money is 8 times of itself if it doubles itself in 15 years interest
compounded annually.
80. Present value of a scooter is ` 7290, if its value decreases every year by 10% then the value before 3
years is equal to
(a) 10,000 (b) 10,500 (c) 20,000 (d) 20,500
81. Find the effective rate of interest at 10% p.a when the interest is payable quarterly.
(a) 10.38% (b) 5% (c) 5.04% (d) 4%
82. The difference between in simple interest on a sum invested of ` 1500 for 3 years is ` 18. The difference
in their rate is
(a) 0.4 (b) 0.6 (c) 0.8 (d) 0.10
83. If population is 25,000 then What will be the population after 3 years . When the population increases
at the rate 3 % in 1 year, 4 % in II year and 5% in III year.
(a) 28,119 (b) 29,118 (c) 27,000 (d) 30,000
84. If `10,000 is invested at 8 % per annum, then compounded quarterly.Then value of investment after 2
years is
(a) ` 11,716.59 (b) ` 10,716.59 (c) ` 12,715.59 (d) none of these
85. In how many years will a sum of money become double at 5% p.a compound interest
(a) 14 years (b) 15 years (c) 16 years (d) 14.3 Years
MTP-Oct ‘21
86. The future value of an annuity of `1,000 is made annually for 5 years at interest rate of 14% compounded
annually [Given that (1.14)5= 1.92541] is _______
(a) ` 5610 (b) ` 6610 (c) ` 6160 (d) ` 5160
87. A sum of `46,875 was lent out at simple interest and at the end of 1 year 8 months, the total amount was
` 50,000. Find the rate of interest per annum.
(a) 8% (b) 4% (c) 12% (d) None
88. A sum of money amount to ` 6,200 in 2 years and ` 7,400 in 3 years. The principal and rate of interest
are
(a) ` 3,800, 31.57% (b) ` 3,000, 20% (c) ` 3,500, 15% (d) none of these
89. The effective rate of interest corresponding to a nominal rate 3% p.a payable half yearly is
(a) 3.2% p.a (b) 3.25% p.a (c) 3.0225% p.a (d) none of these
90. A sum of money gets doubled in 5 years at X% simple interest. If the interest was Y%, the sum of money
would have become ten-fold in thirty years. What is Y – X (in %)
(a) 10 (b) 5 (c) 8 (d) None
91. The nominal rate of growth is 17% and inflation is 9% for the five years. Let P be the Gross Domestic
Product (GDP) amount at the present year then the projected real GDP after 6 years is
(a) 1.587P (b) 1.921 P (c) 1.403 P (d) 2.51 P
92. The difference between Compound Interest and Simple Interest on a certain sum for 2 years at 6% p.a.
is ` 13.50. Find the sum
(a) 3750 (b) 2750 (c) 4750 (d) none
93. The sum required to earn a monthly interest of Rs 1200 at 18% per annum Simple Interest is
(a) ` 50,000 (b) ` 60,000 (c) ` 80,000 (d) none
94. The compound interest earned by a money lender on ` 7,000 for 3 years if the rate of interest for 3 years
are 7%, 8% and 8.5% respectively is
(a) ` 1750 (b) ` 1800 (c) ` 1776 (d) none
95. Find the present value of an annuity of ` 1,000 payable at the end of each year for 10 years, if the
money is worth 5% effective.
(a) ` 7,724 (b) ` 7000 (c) ` 8000 (d) none
96. The present value of annuity of ` 3,000 per annum for 15 years at 4.5% p.a C.I. annually is
(a) ` 23,809.41 (b) ` 32,214.60 (c) ` 32,908.41 (d) none
97. A person desires to create a fund to be invested at 10% CI per annum to provide for a prize of ‘ 300 every
year. Using V = a/I find V and V will be
(a) ` 2,000 (b) ` 2,500 (c) ` 3,000 (d) none of these
98. The future value of annuity of ` 2000 for 5 years at 5 % compounded annually is given (in nearest ‘) as
(a) ` 11, 051 (b) ` 21,021 (c) ` 1,56,24 (d) ` 61254
99. A Maruti Zen cost ` 3,60,000. Its price depreciates at the rate of 10% of a year during the first two years
and at the rate of 20% in third year. Find the total depreciation.
(a) ` 1,26,720 (b) ` 1,15,620 (c) ` 1,25,000 (d) ` 1,10,520
MTP-Nov ‘21
100. The sum of money doubles itself in 10 years. The number of years it would be treble itself is:
(a) 25 years (b) 15 years (c) 20 years (d) None

101. Arun purchased a vaccum cleaner by giving ` 1700 as cash down payment, which will be followed by
five EMIs of ` 480 each. The vaccum cleaner can also be bought by paying ` 3900 cash. What is the
approx. rate of interest p.a. (at simple interest) under this instalment plan?
(a) 18% (b) 19% (c) 22% (d) 20%
102. Present Value of a five year annuity is Rs. 2,000. If the rate of interest is 8% p.a., what is the amount of
each annuity payment?
(a) Rs.500.9 (b) Rs.463.8 (c) Rs.363.1 (d) Rs.486.4
103. Abdul has taken a loan from Bahadur at 7% p.a. The loan has to be repaid in three equal yearly instalments
of Rs. 10,000 each. What is the amount of loan taken?
(a) Rs.25,467 (b) Rs.26,897 (c) Rs.26,243 (d) None
104. A took a loan from B. The loan is to be repaid in annual installments of Rs. 2,000 each. The first instalment
is to be paid three years from today and the last one is to be paid 8 years from today? What is the value
of loan today, using a discount rate of eight percent?
(a) Rs.9,246 (b) Rs.7,927 (c) Rs.8,567 (d) None
105. If the cost of capital be 12% per annum, then the Net Present Value (in nearest Rs.) from the given cash
flow is given as
Year 0 1 2 3
Operating Profit (in thousand Rs.) (100) 60 40 50
(a) Rs.34048 (b) Rs.34185 (c) Rs.51048 (d) Rs.21048
106. Let the operating profit of a manufacturer for five years is given as
Year 1 2 3 4 5 6
Operating Profit (in lakh Rs. ) 90 100 106.4 107.14 120.24 157.35
Calculate Compound Annual Growth Rate (CAGR)
(a) 9% (b) 12% (c) 11% (d) 13%
107. If a sum triples itself in 15 years at simple rat of interest, the rate of interest per annum will be:
(a) 13% (b) 13.3% (c) 13.5% (d) 18.0%
108. What will be population after 3 years when present population is 25, 000 and population increases at
the rate of 3% in I year, at 4% in II year and 5% in III year?
(a) Rs.28,119 (b) Rs.29,118 (c) Rs.27, 000 (d) Rs.30, 000
109. The future value of an annuity of Rs.1500 made annually for five years at interest of 10% compounded
annually is (Given that (1.1) 5= 1.61051)
(a) Rs.9517.56 (b) Rs.9157.65 (c) Rs.9715.56 (d) Rs.9175.65
110. Find the effective rate of interest equivalent to the nominal rate of 7% converted monthly:
(a) 7.26% (b) 7.22% (c) 7.02% (d) 7.20%
111. How much will be Rs.25,000 to in 2 years at compound interest if the rates for the successive years are
at 4% and 5% per year
(a) Rs.27,300 (b) Rs.27,000 (c) Rs.27,500 (d) Rs.27,900
ANSWER KEYS
1 (c) 2 (b) 3 (a) 4 (a)
5 (c) 6 (a) 7 (c) 8 (a)
9 (c) 10 (d) 11 (c) 12 (c)
13 (b) 14 (a) 15 (a) 16 (b)
17 (d) 18 (d) 19 (a) 20 (b)
21 (b) 22 (b) 23 (b) 24 (d)
25 (b) 26 (d) 27 (d) 28 (a)
29 (c) 30 (a) 31 (c) 32 (a)
33 (b) 34 (d) 35 (a) 36 (a)
37 (a) 38 (b) 39 (b) 40 (b)
41 (c) 42 (d) 43 (b) 44 (a)
45 (b) 46 (b) 47 (d) 48 (a)
49 (d) 50 (b) 51 (c) 52 (c)
53 (b) 54 (a) 55 (d) 56 (b)
57 (a) 58 (a) 59 (d) 60 (b)
61 (a) 62 (a) 63 (b) 64 (b)
65 (c) 66 (b) 67 (a) 68 (a)
69 (a) 70 (a) 71 (b) 72 (a)
73 (d) 74 (a) 75 (d) 76 (a)
77 (b) 78 (a) 79 (c) 80 (a)
81 (a) 82 (a) 83 (a) 84 (a)
85 (d) 86 (b) 87 (b) 88 (a)
89 (c) 90 (a) 91 (a) 92 (a)
93 (c) 94 (c) 95 (a) 96 (b)
97 (c) 98 (a) 99 (a) 100 (c)
101 (c) 102 (a) 103 (c) 104 (b)
105 (d) 106 (b) 107 (b) 108 (a)
109 (b) 110 (b) 111 (a)

Chapter-5
Basic Concepts of Permutations and Combinations
MTP-March ‘20
1. The number of ways the letters of the word ‘COMPUTER’ can be rearranged is
(a) 40,320 (b) 40,319 (c) 40,318 (d) none of these
2. 5 persons are sitting in a round table in such way that Tallest Person is always on the right-side of the
shortest person; the number of such arrangements is
(a) 6 (b) 8 (c) 24 (d) none of these
3. An examination paper with 10 questions consists of 6 questions in Algebra and 4 questions in Geometry.
At least one question from each section is to be attempted. In how many ways can this be done?
4. If 12 school teams are participating in a quiz contest, then the number of ways the first, second and
third positions may be won is
MTP-October ‘19
5. In how many ways can a committee of 3 ladies and four gents be chosen from 8 ladies and 7 gents?
(a) 1950 (b) 1920 (c) 1940 (d) 1960
6. In how many ways can the letters of the word ‘STRANGE’ be arranged so that the vowels never come
together?
(a) 3600 (b) 3686 (c) 5040 (d) 4050
7. A box contains 7 red, 6 white and 4 blue balls. How many selections of three balls on of each colour?
(a) 178 (b) 158 (c) 198 (d) 168
8. The number of diagonals in a polygon of 6 sides
(a) 9 (b) 8 (c) 6 (d) 12
MTP-March ‘19
9. If
n
Pr = 336 and
n
Cr = 56, then n and r will be
(a) (3,2) (b) (8, 3) (c) (7, 4) (d) none of these

10. In how many ways the letters of the word ‘ARRANGE’ be arranged?
(a) 1,200 (b) 1,250 (c) 1,260 (d) 1,300
11. The number of ways in which 8 examination papers be arranged so that the best and worst papers
never come together.
(a) 8! - 2× 7! (b) 8! - 7! (c) 8! (d) 7!
12.
n
Pr = 720 and
n
Cr = 120 then value of r is
(a) 4 (b) 5 (c) 3 (d) 6
MTP-April 2019
13. if nP4 = 12nP2 then n=
(a) 2 (b) 3 (c) 4 (d) 6
14. A man has 5 friends’. In how many ways can be invite one or more of his friends to dinner?
(a) 30 (b) 31 (c) 32 (d) 10
MTP-Oct ‘20
15. The number of triangles that can be formed by choosing the vertices from set of 12 points, seven of
which lie on the same straight line is
(a) 185 (b) 175 (c) 115 (d) 105
16. How many ways can be letters of the word “FAILURE’ be arranged so that the consonants may occupy
only odd places?
(a) 576 (b) 476 (c) 376 (d) 276
17. In an examination a candidate has to pass in each of the 4 papers. In how many different ways can be
failed?
(a) 14 (b) 16 (c) 15 (d) None
18. In an election the number of candidates is one more than the number of members to be elected. If a
voter can vote in 254 different ways; find the number of candidates.
(a) 8 (b) 10 (c) 7 (d) None
MTP-March ‘21
19. An examination paper consists of 12 questions divided into two parts A and B. Part A contains 7 questions
and Part B contains 5 questions. A candidate is required to attempt 8 questions selecting at least 3 from
each part, in how many maximum ways can the candidate select the questions?
(a) 35 (b) 175 (c) 210 (d) 420
20. Find the number of combinations of the letters of the word COLLEGE taken four together:
(a) 18 (b) 16 (c) 20 (d) 26
MTP-March ‘22
21. The number of ways of arranging 6 boys and 4 girls in a row so that all 4 girls are together is:
(a) 6!. 4! (b) 2 (7! 4!) (c) 7! 4! (d) 2. (6! 4!)
22. 15C3+15C13= 16Cr then ‘r’ is equal to

(a) 2 (b) 3 (c) 4 (d) 5
23. How many different words can be formed with the letters of the word “LIBERTY”
(a) 4050 (b) 5040 (c) 5400 (d) 4500
24 Chapter 5 : Basic Concepts of Permutations and Combinations

MTP-Oct ‘21
24. Find the value of n if (n+1)! = 42 (n–1)!
(a) 6 (b) -7 (c) 7 (d) -6
25. If then value of n is n if nP13 : n+1 P12 = 3:4
(a) 15 (b) 14 (c) 13 (d) 12
26. A question paper contains 6 questions, each having an alternative. The number of ways an examiner
can answer one or more questions is
(a) 720 (b) 728 (c) 729 (d) none
5
27. C1 + 5C2 + 5C3 +5C4 + 5C5 is equal to _______
(a) 30 (b) 31 (c) 32 (d) 35

MTP-Nov ‘21
28. A box contains 3 pink caps, 2 purple caps and 4 orange caps. In how many ways they can be arranged so
that the caps of the same colour come together. (Assume all caps of same colour are not identical)
(a) 1724 (b) 1728 (c) 1732 (d) 1764
15
29. C3 +15C13 is equal to:
16 30 15 15
(a) C3 (a) C 16 (c) C8 (d) C 15
30. There are 12 questions to be answered in Yes or No. How many ways can these be answered?
(a) 1024 (b) 2048 (c) 4096 (d) None
31. In how many ways 3 Prizes can be distributed among 5 students
(a) 10 (b) 45 (c) 60 (d) 120
32. The number of words that can be formed out of the letters of the word “ARTICLE” so that vowels occupy
even places is
(a) 36 (b) 144 (c) 574 (d) 754
ANSWER KEYS
1 (b) 2 (a) 3 (a) 4 (b)
5 (d) 6 (a) 7 (d) 8 (a)
9 (b) 10 (c) 11 (a) 12 (c)
13 (d) 14 (b) 15 (a) 16 (a)
17 (c) 18 (a) 19 (d) 20 (a)
21 (c) 22 (b) 23 (b) 24 (a)
25 (a) 26 (b) 27 (b) 28 (b)
29 (a) 30 (c) 31 (c) 32 (b)

26 Chapter 5 : Basic Concepts of Permutations and Combinations

Chapter-6
Sequence and Series (AP GP)
MTP-March ‘20
1. Three numbers are in AP and their sum is 21. If 1, 5, 15 are added to them respectively, they form a G.
P. The numbers are
(a) 5, 7, 9 (b) 9, 5, 7 (c) 7, 5, 9 (d) none of these.
2. The sum of three numbers in G.P. is 70. If the two extremes by multiplied each by 4 and the mean by 5,
the products are in AP. The numbers are
(a) 12, 18, 40 (b) 10, 20, 40 (c) 40, 20, 15 (d) none of these
3. The first and the last term of an AP are –4 and 146. The sum of the terms is 7171. The number of terms
is
MTP-October ‘19
4. The first term of an A.P. is 100 and the sum of whose first 6 terms is 5 times the sum of the next 6 terms,
then the c.d. is –
(a) –10 (b) 10 (c) 5 (d) None of these
2
5. The sum of n terms of an A.P. is 3n +n; then its pth term is
(a) 6P+2 (b) 6P–2 (c) 6P–1 (d) None of these
6. if three AM’s between 3 and 11, they are
(a) 4, 6, 8 (b) 3, 5, 7 (c) 5,7, 9 (d) 11/2, 15/2, 19/2
MTP-March ‘19
7. The value of K, for which the terms 7K +3, 4K-5, 2K+10 are in A.P., is
(a) 13 (b) - 23 (c) 13 (d) 23
8. Find the three numbers in G.P, whose sum is 19 and product is 216.
(a) 9,6,4 or 4,6,9 (b) 9,6,3 or 3,6,9
(c) 9,3,1 or 1,3,9 (d) 9,3, -1 or -1,3,9
9. The nth term of the sequence -1,2, -4, 8,.is
(a) (-1) n 2 n- 1 (b) 2n- 1 (c) 2n (d) none of these
MTP-April ‘19
10. The sum of the first two terms of a GP is 5/3 and the sum of infinity of the series is 3. The common ratio
is
(a) 1/3 (b) 2/3 (c) -1/3 (d) none of these
11. The sum of the infinite series 1+2/3+4/9+………is
(a) 1/3 (b) 3 (c) 2/3 (d) none of these
12. Which term of the AP 64,60,56,52….is Zero
(a) 16 (b) 17 (c) 15 (d) 14
MTP-Oct ‘20
13. If a, b, c are in AP and x, y, z are in GP , then the value of x(b-c) .y(c-a) .z(a-b) is
(a) 1 (b) 0 (c) b (c-a) (d) none
14. The sum of the first two terms of an infinite geometric series is 15 and each term is equal to the sum of
all the terms following it; then the sum of the series is
(a) 20 (b) 15 (c) 25 (d) None
MTP-March ‘21
15. Find the sum to n terms of the series : 7+77+777+………….. to n terms:
7 7n 7 7n
(a) (10n+1 - 10) - (b) (10n+1 - 10) +
9 9 9 9
7 7n 7 7n
(c) (10n+1 - 10) - (d) (10n+1 - 10) +
81 9 81 9
16. If the sum of n terms of an A.P. is (3n2 – n) and its common difference is 6, then its third term is:
(a) 10 (b) 12 (c) 14 (d) 16
17. Insert 4 A.M.’s between 3 and 18 :
(a) 12,15,9,6 (b) 6,9,12,15 (c) 9,6,12,15 (d) 15,12,9,6
18.  n2 defines:
2
n(n +1)(2n+1) n(n +1)  n (n +1) 
(a) (b) (c)  (d) None of these
6 2  2 
MTP-March ‘22
19. If x, y and z are the terms in G.P , then the term x2+y2 , xy + yz , y2+z2are in
(a) AP (b) GP (c) HP
(d) none of the above
20. In a GP .if fourth term is 3 then the product of first seven terms is
(a) 35 (b) 37 (c) 36 (d) 38
2 2
21. In a G.P. If the third term of a GP is and 6th term is ,then the first term is
3 81
(a) 6 (b) 1/3 (c) 9 (d) 2
1 1 1 1 1
22. Sum upto infinity series + + + + +.........
2 32 23 34 25
(a) 19/24 (b) 24/19 (c) 5/24 (d) none of these
28 Chapter 6 : Sequence and Series (AP GP)

MTP-Oct ‘21
23. The second term of a G P is 24 and the fifth term is 81. The series is
(a) 16, 36, 24, 54….. (b) 24, 36, 53… … (c) 16, 24, 36, 54,…… (d) none
24. The sum of progression (a+b), a, (a–b)........n term is
n n n n
(a) [2a+(n–1)b] (b) [2a+(3–n)b] (c) [2a+(3–n)] (d) [2a+ (n–1)]
2 2 2 2
25. The series 1 to 10-1 + 10 -2 +10-3 .......... to  is
(a) 9/10 (b) 1/10 (c) 10/9 (d) none
n 
26. Find the sum of first twenty-five terms of A.P. series whose nth term is  + 2 
5 
(a) 105 (b) 115 (c) 125 (d) 135
27. The sum of the first 3 terms in an AP is 18 and that of the last 3 is 28. If the AP has 13 terms, what is the
sum of the middle three terms?
(a) 23 (b) 18 (c) 19 (d) None
28. The ratio of sum of first n natural numbers to that of sum of cubes of first n natural numbers is
(a) 3:16 (b) n(n+1) / 2 (c) 2 / n(n+1) (d) None
29. If the sum of ‘terms of an Arithmetic Progression is 2n2, the fifth term is.
(a) 20 (b) 50 (c) 18 (d) 25
ANSWER KEYS
1 (a) 2 (b) 3 (a) 4 (a)
5 (b) 6 (c) 7 (b) 8 (a)
9 (a) 10 (b) 11 (b) 12 (b)
13 (a) 14 (a) 15 (c) 16 (c)
17 (b) 18 (a) 19 (b) 20 (b)
21 (a) 22 (a) 23 (c) 24 (b)
25 (c) 26 (b) 27 (a) 28 (c)
29 (c)

NOTES
30 Chapter 6 : Sequence and Series (AP GP)

Chapter-7
Sets, Functions and Relations
MTP-March ‘20
1. (AUB)’ is equal to
(a) (A’UB)’ (b) A’  B’ (c) A’U B’ (d) none of these
1 x -1
2. If f (x)= and g(x)= ,then g of (x) is
1- x x
(a) x-1 (b) x (c) 1/x (d) none of these
3. A town has a total population of 50,000. Out of it 28,000 read the newspaper X and 23,000 read Y while
4,000 read both the papers. The number of persons not reading X and Y both is
MTP-October ‘19
4. If A = {1, 2, 3, 4, 5} and B = {6, 7, 8}, then cardinal number of AXB is:
(a) 15 (b) 5 (c) 3 (d) 8
MTP March ‘21
5. The number of subsets of the set A = {1, 2, 3, 4, 5, 6, 7, 8} is
(a) 36 (b) 128 (c) 256 (d) None of these
 x2 - 4 
6. If f(x) =   ,then f(2) is
 x -2 
(a) 0 (b) 2 (c) 4 (d) not defined
[MTP-March ‘19]
7. If A = {1,2,3,4} and B = {1,4,9,16,25} is a function of f is defined set A to B where f(x) = x2 then the range
of f is
(a) {1,2,3,4} (b) {1,4,9,16} (c) {1,4,9,16, 25} (d) none of these
8. If A = {1,2,3,4,5,6,7} and B = {2,4,6} Cardinal number of AUB
(a) 3 (b) 16 (c) 5 (d) 7
9. If f(x) = x+3 and g(x) = x2, then fog(x)
(a) x2 + 3 (b) x2+x+3 (c) (x+3)2 (d) none of these
MTP-April ‘19
10. A function f(x) is an even function, if
(a) –f(x) = f(x)) (b) f(–x) = f(x) (c) f(–x) = –f(x) (d) None of these
11. If A = {1, 2, 3, 4} and B = {5, 6, 7,8}, then cardinal number of the set A×B is _____
12. Find the f o g for the functions f (x) =x3 , g (x) = x+ 1
(a) x2 (x+1) (b) x2 (c ) x+1 (d) (x+1)3
13. The number of sub sets of function {2, 3, 5, 6}
MTP-Oct ‘20
14. Let f: R  R be such that f(x) = 2x, then f(x+y) equals
(a) f(x) + f(y) (b) f(x). f(y) (c) f(x) ÷f(y) (d) None
15. If A = { p, q, r, s } , B = { q, s , t} and C= { m , q, n} find C-(A  B)
(a) {m, n} (b) {p, q} (c) {r, s} (d) {p, r}
16. The set having no element is called
(a) Singleton set (b) null set (c) finite set (d) Infinite set
MTP-March ‘21
17. If A = {1, 2, 3, 4, 5} and B = {6, 7, 8,9}, then cardinal number of AXB is:
(a) 20 (b) 5 (c) 3 (d) 8
18. If A = (1,2,3,4,5) B = (2,4) and C = (1,3,5) then (A-C)×B is
(a) {(2,2,), (2,4), (4,2), (4,4), (5,2), (5,4)} (b) {(1,2), (1,4), (3,2), (3,4), (5,2), (5,4)}
(c) {(2,2), (4,2), (4,4), (4,5)} (d) {(2,2), (2,4), (4,2), (4,4)}
k
19. If f(x) = x and f’ (1) = 10 then the value of k is
(a) 10 (b) - 10 (c) 1/10 (d) None
MTP-March ‘22
2+x
20. If f(x) = ,then f-1 (x):
2- x
2 x - 1 2  x + 1 x +1 x -1
(a) (b) (c) (d)
x +1 x -1 x -1 x +1
21. If f(x) = x+2, g(x) = 7x, than gof(x) = ____

(a) 7x.x + 2.7x (b) 7x + 2 (c) 49 (7x) (d) none of these
32 Chapter 7 : Sets, Functions and Relations

MTP-Oct ‘21
2
22. Find g of for the functions f (x) = x , g (x) = 2x +1
(a) 2x2+1 (b) 2x+1 (c) 2x2+1)  x (d) x
x +1 f  3
23. If f(x)=x2 –1 and g(x) = , then f 3 + g 3 is
2    
(a) 5/4 (b) 4/5 (c) 3/5 (d) 5/3
24. If A = {2,3}, B = {4,5}, C = {5,6} then AX (B  C) is
(a) {(2,5), (3,5)} (b) {(4,2), (4,6)} (c) {(4,3), (4,2)} (d) none
MTP-Nov ‘21
25. Let Z be the universal set for two sets – A and B. If n(A) = 300, n(B) = 400 and n (A  B) = 200, then (A’ 
B’) is equal to 400 provided n(Z) is equal to
(a) 900 (b) 800 (c) 700 (d) 600
26. In a group of students 80 can speak Hindi, 60 can speak English and 40 can speak Hindi and English both,
then number of students is:
(a) 100 (b) 140 (c) 180 (d) 60
27. if f(x) = x2-1 and g(x) = 2x+3 then gof (3)
(a) 71 (b) 61 (c) 41 (d) 19
ANSWER KEYS
1 (b) 2 (b) 3 (b) 4 (a)
5 (c) 6 (d) 7 (b) 8 (d)
9 (a) 10 (b) 11 (c) 12 (d)
13 (c) 14 (b) 15 (a) 16 (b)
17 (a) 18 (d) 19 (a) 20 (a)
21 (c) 22 (b) 23 (b) 24 (a)
25 (a) 26 (a) 27 (d)

NOTES
34 Chapter 7 : Sets, Functions and Relations

Chapter-8
Basic applications of Differential and Integral Calculus
MTP-March ‘20
ax
1.  e dx
eax
(a) ex + c (b) +c (c) log x + c (d) eax + c
a
2. The gradient of the curve y = 2x3–5x2– 3x at x = 0 is
(a) 3 (b) -3 (c) 1/3 (d) none of these
4
3. Evaluate   2x + 5  dx dx and the value is
1
(a) 3 (b) 10 (c) 30 (d) None of these.
2
4. If f(x) = x – 6x+8 then f’(5) – f’(8) is equal to
(a) f’(2) (b) 3. f’(2) (c) 2. f’(2) (d) none of these.
MTP-October ‘19
dy
5. If y3 . x5 = (x+y)8, then is
dx
y -y y5
(a) (b) (c) (d) None of these
x x x3
MTP-Oct ’20
6. If f’(X) = 3X2+2 & f(0)=0 then find f(2)
3 3
7. The gradient of the curve x +y = 9 at the point (1,2) is
(a) -1/4 (b) ¼ (c) 4 (d) -4
2t 1- t2 dy X
8. If X = ,y = + is
2 2 then dx y
1+ t 1+ t
(a) 1 (b) 2 (c) 0 (d) 4t2
MTP-March ‘21
2x + 1
9. Evaluate dx
x  x + 1
(a) x log (x2-x)+c (b) log (x2+x)+ c (c) log (x2+1) + c (d) None of these
1
10. Evaluate  X.exdx
0
(a) e (b) e-1 (c) 2e (d) 1
MTP-March ‘19
dy
11. Given x = 2t + 5, y = t2 -2; is calculated
dx
(a) t (b) -1/t (c) 1/t (d) none of these
12. The slope of the tangent to the curve y = x2 -x at the point, where the line y = 2 cuts the curve in the first
quadrant, is
(a) 2 (b) 3 (c) -3 (d) -2
dy
13. For the curve x2 + y2 + 2gx + 2hy = 0, the value of at (0,0) is
dx
(a) -g/h (b) g/h (c) h/g (d) -h/g
-3x dx
14. e
1 1 -3x 1 3x
(a)  e-3x + c (b) e +c (c)  e + c (d) 3e - 3x + c
3 3 3
15.  x.log x
x2 x2 x2 x2
(a) .log x - + c (b)  .log x - + c
2 4 2 4
x2 x2 x2 x2
(c) .log x + + c (d)  .log x + + c
2 4 2 4
MTP-April ‘19
 dy 
16. if x= at2, y=2at, then   is equal to
 dx  t2
(a) 1/2 (b) -2 (c) -1/2 (d) none of these
36 Chapter 8 : Differential and Integral Calculus

17. The gradient of the curve y = 4x2 – 2x at x =1 is
1
18. a dx
2
 x2
1 ax 1 ax
(a) log c (b) log c
2a ax 2a ax
1 xa
(c) log c (d) None of these
2a xa
 1 1 
19.   logx - (logx)2  dx
1 x
(a) c (b) c
log x log x
x
(c) c (d) None of these
log x
2 x
20. x e dx
(a) ex (x2-2x+2) +c (b) ex (x2-2) +c (c) ex (x2+2x+2) +c (d) ex (x2-2x) +c
a dy
21. If x = at3, y = , at t = 1 is
t 3 dx
(a) 1 (b) -1 (c) 3 (d) 2/3
MTP-Oct ‘20
dy
22. If x , x 1 + y + y 1 + x = 0 , then (1+x)2 dx =
(a) 0 (b) 1 (c) -1 (d) 2
dy logt 
23. Find at t =1 when x = t logt and y =
dx t
(a) 1 (b) -1 (c) -1/2 (d) 0
MTP-March ‘21
dy
24. Given x = 2t + 5; y = t2-2, then is calculated as:
dx
(a) t (b) 1/t (c) -1/t (d) None
2
5
25. Evaluate  x dx
0
(a) 32/3 (b) 1/3 (c) 1/2 (d) 1

MTP-March ‘22
dy
26. Given x = 2t + 5; y = t2-2, then is calculated as:
dx
(a) t (b) 1/t (c) -1/t (d) none of these
x x2 + 2x dx
27. e  
(a) x2.ex+c (b) x.ex+c (c) -x.ex+c (d) e-x + c
dy
28. if xy =1 then y2+ =?
dx
MTP-Oct ‘21
dy
29. If y = e 2x , is calculated as
dx
2x 2x
e e
(a) (b) e 2x (c) (d) none
2x 2x
5 x2
 dx
30. Evaluate: 0 2 2
x + 5 - X 
(a) 2.5 (b) 0 (c) -1 (d) 2
MTP-Nov ‘21
31. Marginal cost and marginal revenue of a commodity is C’(x)=8+6x and R’(x)=30. Fixed cost is 0. Find the
total profit.
(a) 22x + 3x2 (b) 22x - 3x2 (c) 22x - x2 (d) x + 3x2
32. 3x 2x x
 2 .3 .5 dx
23x.32x.5x dx 23x.32x.5x dx
(a) +C (b) +C
log  270  log  360 

23x.32x.5x 23x.32x.5x
(c) +C (d) +C
log 180  log  90 
MTP-Oct ‘21
33. if f(x) = x2/ex , then f’(–1) is equal to
(a) -3e (b) 1/e (c) e (d) none
MTP-Nov’21
d
34. Find the value of of (-3x+7)
dx
(a) 3 (b) -3 (c) 0 (d) 1
35. A total cost function of a company RXL ltd is C(x) = 10+50x-30x2+x3/3 Where x denotes the output. Find
the output level at which the profit is maximum if price function is given by 450-30x
(a) 30 (b) 40 (c) 50 (d) 20
ANSWER KEYS
1 (b) 2 (b) 3 (c) 4 (b)
5 (a) 6 (c) 7 (a) 8 (c)
9 (b) 10 (d) 11 (a) 12 (b)
13 (a) 14 (a) 15 (a) 16 (a)
17 (b) 18 (a) 19 (b) 20 (a)
21 (b) 22 (c) 23 (a) 24 (a)
25 (a) 26 (a) 27 (a) 28 (b)
29 (a) 30 (a) 31 (b) 32 (b)
33 (a) 34 (b) 35 (d)

NOTES

Chapter-9
Number Series, Coding and Decoding and Odd Man Out
MTP-March ‘20
1. Find the wrong term of the series 121, 143, 165, 186, 209
(a) 143 (b) 165 (c) 186 (d) 209
2. Find missing term 7, 26, 63, 124, 215, 342 ?
(a) 391 (b) 421 (c) 481 (d) 511
3. Find odd man out of the series 145, 197, 257, 325,399
(a) 145 (b) 399 (c) 257 (d) 325
4. Find missing term of the alphabet series ABD, DGK, HMS, MTB, SBL ?
(a) XKW (b) ZAB (c) ZKU (d) ZKW
5. In a certain language, FLOWER is coded UOLDVI, then how is TERMINAL coded in that language?
(a) FLKPMROZ (b) GVINRMZO (c) RVNIGLKA (d) MNIVGYEO
MTP-October ‘19
6. Find the missing term of the series 17, 14, 15, 12, 13, ?, ?
(a) 10, 11 (b) 14, 11 (c) 11, 13 (d) 12, 13
7. Find out the odd man out of the series 5, 27, 61, 122, 213, 340, 509
(a) 27 (b) 61 (c) 122 (d) 509
8. a_c_ba_ca_cb
(a) abcc (b) acba (c) bcaa (d) bcba
9. In a certain language TWINKLE is written as SVHOJKD, then how would FILTERS be written in the same
code?
(a) EHKUDQR (b) ITNFKD (c) KVOHMF (d) TIMFKD
10. If ‘MEAT’ is written as ‘TEAM’, then ‘BALE’ is written as
(a) ELAB (b) EABL (c) EBLA (d) EALB
MTP-March ‘19
11. Find the missing term of the number series 24, 60, 120, 210 , ?
(a) 300 (b) 336 (c) 420 (d) 525
12. GO = 32, SHE = 49, then SOME will be equal to
(a) 56 (b) 58 (c) 62 (d) 64
13. In a certain Code DECEMBER is written as ERMBCEDE. Which word will be written as ERMBVENO in that
code?
(a) AUGUST (b) SEPT EMBER (c) OCT OBER (d) NOVEMBER
14. Find the missing term of the number series 48, 24, 96,48,192 , ?
(a) 76 (b) 90 (c) 96 (d) 98
MTP-April, ‘19
15. Find odd one out of the series 37, 45, 49, 65, 79
(a) 37 (b) 45 (c) 49 (d) 65
16. Find the missing number of the series 22, 24, 28, ? , 52, 84
(a) 36 (b) 38 (c) 42 (d) 46
17. Find the missing number of series 1, 5, 13, 25, 41, ?
(a) 51 (b) 57 (c) 61 (d) 63
18. If SUMMER is coded as RUNNER the code for WINTER will be
(a) SUITER (b) VIOUER (c) WALKER (d) SUFFER
19. In a certain code KAVERI is written as VAKIRE. How is MYSORE written in that code?
(a) EROSYM (b) SYMORE (c) SMYERP (d) SYMERO
MTP-Oct ‘20
20. Find next number in the following series 7, 11, 13, 17, 19, 23, 25, 29?
(a) 30 (b) 31 (c) 32 (d) 33
21. Find odd man out of the following series 41, 43, 47, 53, 61, 71, 73, 81
(a) 41 (b) 47 (c) 61 (d) 81
22. If PLAY is coded as 8123 and RHYME is coded as 49367. What will be code of MALE?
(a) 6217 (b) 6198 (c) 6395 (d) 6285
23. Find the alphabet missing series ac_cab_baca_a_ab
(a) aabc (b) aacb (c) babb (d) bcbb
MTP-March ‘21
24. Find the missing term of the series 27,32,30,35, 33, ?
(a) 28 (b) 31 (c) 36 (d) 38
25. Find out the letter series AZY, EXW, IVU, ?
(a) MTS (b) MQR (c) NRQ (d) LST
26. Find wrong number of the series 22,37, 52,67, 84, 97
(a) 52 (b) 84 (c) 97 (d) 67
27. If TWENTY is written as 863985 and ELEVEN is written as 323039 , then TWELVE can be coded
(a) 863203 (b) 863302 (c) 863320 (c) 683302
42 Chapter 9 : Number Series

28. If ‘LOSE’ is coded 1357 and ‘GAIN’ is coded as 2468 What do the figure 82146 for
(a) NGLAI (b) NGLIA (c) GNLIA (d) GNLAI
29. If B = 2 and BAG = 10, then BOX = ?
(a) 36 (b) 39 (c) 41 (d) 52
MTP-March’22
30. The missing term of the series 11, 10 __27, 66.5, 198.5
(a) 14 (b) 16 (c) 21 (d) 19
31. What comes at last place in R, U, X, A, D, ?
(a) E (b) F (c) G (d) H
32. If Z = 52 and ACT = 48, then BAT will be equal to
(a) 39 (b) 41 (c) 44 (d) 46
33. If ROSE is coded as 6821, CHAIR is coded as 73456 and PREACH is coded as 961473, what will be the code
for SEARCH?
(a) 246173 (b) 214673 (c) 214763 (d) 216473
34. If E = 5 and READ is coded as 7, then what is the code of ‘DEAR’ ?
(a) 6 (b) 7 (c) 8 (d) 9
MTP-Oct’21
35. Find next term of the series 3,10,29,66, 127,?
(a) 164 (b) 187 (c) 216 (d) 218
36. Which number should come next 7, 26,63,124,215, 342,?
(a) 391 (b) 421 (c) 481 (d) 511
37. Find out the wrong number. 10,14,28,32,64,68,132
(a) 28 (b) 32 (c) 64 (d) 132
38. In a certain code ‘SOUTHERN’ is written as ‘UVPTMQDG’. How is ‘MARIGOLD’ written in that code?
(a) JSBCNFKS (b) JSBNHPME (c) JSBNCKNF (d) NBSKCJNF
39. In a certain code ‘PRISM’ is written as ‘OSHTL’ and ‘RUBLE’ is written as ‘QVAMD’. How will ‘WHORL’ be
written in that code?
(a) XISPM (b) VINSK (c) UINSK (d) XGPQM
MTP-Nov’21
40. Find out the next term of the series 4, 25, 121, 289, _____
(a) 529 (b) 441 (c) 625 (d) None
41. Which number should come next  7, 13, 13, 14, 19, 15 ?
(a) 15 (b) 25 (c) 19 (d) None
42. Find out the wrong number. 2,10,18,54,162,486,1458
(a) 18 (b) 10 (c) 54 (d) 162
43. In a certain code, Delhi is capital is coded as 7 5 9 capital are beautiful c is coded as 3 6 9 c, Delhi is
beautiful is coded as 6 7 5 Patna also capital is coded as 9 2 4. What is code for beautiful ?
(a) 2 (b) 4 (c) 6 (d) 9
48. If ‘SYSTEM’ is coded as 131625 then ‘TERMS ‘will be coded as ?
(a) 62251 (b) 62451 (c) 64251 (d) 62415
ANSWER KEYS
1 (c) 2 (d) 3 (b) 4 (d)
5 (b) 6 (a) 7 (a) 8 (d)
9 (a) 10 (d) 11 (b) 12 (a)
13 (d) 14 (c) 15 (c)
16 (a) 17 (c) 18 (b) 19 (d)
20 (b) 21 (d) 22 (a) 23 (b)
24 (d) 25 (a) 26 (b) 27 (a)
28 (a) 29 (c) 30 (a) 31 (c)
32 (d) 33 (b) 34 (b) 35 (d)
36 (d) 37 (d) 38 (c) 39 (b)
40 (a) 41 (b) 42 (b) 43 (c)
44 (b)

44 Chapter 9 : Number Series

Direction Tests
Chapter-10
Direction Tests
MTP-March ‘20
1. A man is facing towards East and turns through 45° clockwise again 180° clock wise and then turns
through 270° anti-clock wise. In which direction is he facing now?
(a) West (b) North- East (c) South (d) South-West
2. Facing towards North, Ravi walks 35 m. He then turns left and walks 55 m. He again turns left and walks
35 m. How far is from original position and towards which direction.
(a) 30 m, North (b) 20 m, East (c) 55 m, West (d) 20 m, South
3. Ram start moving from a point, facing in East direction. After walking 15 m, he turned to his left and
walked 25m, before turning to his right. Then, he walked a distance of 35 m, then turned to his right and
stop after walking further a distance of 25 m. Find how far Ram is from his starting point.
(a) 20 m (b) 50 m (c) 15 m (d) 25 m
MTP-October ‘19
4. A man starts for his office in the North direction, he turns to his left, and then to his right and again to
his right. In which direction he will be facing?
(a) North (b) South (c) East (d) North
5. Pramila is going towards East. She turns left, moves on same distance and again turns to her left. After
walking some distance, she turns to her right and moves on. In which direction she is going now?
(a) North (b) South (c) North-West (d) West
6. Town D is 12 km towards the North of A. Town C is 15 km towards the West of town D. Town B is 15 km
towards the west of town A, how far and which direction is town B from town C ?
(a) 15 Km towards North (b) 12 Km towards North
(c) 3 km towards South (d) 12 km towards South
7. Rajiv walks 10 m South from his house, turns left and walks 25 m, again turns left and walks 40 m, then
turns right and walks 5 m to reach the college. In which direction is the college from his house
(a) North (b) South-West (c) North-East (d) East
MTP-March ‘19
8. Ramu walks 5 Kms starting from his house towards west then turns right and walks 3 km. T hereafter he
takes left turn and walks 2 km. Further, he turn left and walks 3 km. Finally, he turns right and walks 3
kms. In what direction he is now from his house.
(a) West (b) North (c) South (d) North
9. A Driver left his village and drove North for 20 Km, after which he stopped for breakfast. T hen he
turned left and drove another 30 km, when he stopped for lunch. After some rest, he again turned left
and drove 20 kms before stopping for evening tea. Once more he turned left and drove 30 kms to reach
the town where he had supper. After evening tea in which direction did he drive?
(a) West (b) East (c) North (d) South
10. A man is facing East, then he turns left and goes 10m then turns right and goes 5 m then goes 5 m to the
South and from there 5 m to West. In whic h direction is be from his original place? [MTP April ‘19]
(a) East (b) West (c) North (d) South
MTP April, ‘19
11. From her home Prerna wishes to go to school. From home she goes towards North and then turns left
and then turns right, and finally she turns left and reaches school. In which direction her school is
situated with respect to her home?
(a) North-East (b) North-West (c) South-East (d) South-West
12. A child walks 25 feet towards North, turns right and walks 40 feet, turns right again and walks 45 feet.
He then turns left and walks 20 feet. He turns left again walks 20 feet. Finally, he turns to his left to
walks another 20 feet. In which direction is the child from his starting point?
(a) North (b) South (c) West (d) East
MTP Oct ‘20
13. If East is replaced by South-East, then West will be replaced by which replaced by which of the following
directions?
(a) North-East (b) North (c) East (d) North- West
0 0
14. Raju is facing East, he turns 100 in the clockwise direction and 145 in the anti-clock wise direction.
Which direction is he facing now?
(a) West (b) North-East (c) North (d) South-West
15. If a man on motor bike starts from a point and rides 4 km South then turns left and rides 2 km and turn
again to the right to ride in which direction is he moving?
(a) North (b) West (c) South (d) North
16. Hema walks 30 km North. Then, she turns right and walks 30 m then she turns right and walks 55 m. Then
she turns left and walks 20 m. Then she again turns left and walks 25 m. How many meters away is she
from her original position.
(a) 45 m (b) 50 m (c) 66 m (d) 55 m
MTP March ‘21
17. A man stands on a point and starts walking towards north then turns left then turns right and then left
in which direction he is moving.
(a) West (b) North (c) East (d) South
18. One evening before sunset, two friends Ravi and Raj were talking to each other face to face. If Ravi’s
shadow was exactly to his left side, which direction was Raj facing ?
(a) West (b) East (c) North (d) South
19. If South-West becomes North, then what will be the North-East be ?
(a) North (b) South-East (c) South (d) East
MTP-March’22
20. A boy from his home, first walks 20 m in North-West direction then 20 m in South - West direction. Next,
he walks 20m South - East direction. Finally, he turns towards his house. In which direction is he
moving?
(a) North - West (b) North-East (c) South – West (d) South – East
46 Chapter 10 : Direction Tests

21. Raju leaves his house and walks 12 km towards North. He turns right and walks another 12 km. He turns
right, walks 12 km more and turns left to walk 5 km. How far is he from his home and in which direction?
(a) 7 km east (b) 10 km east (c) 17 km east (d) 24 km east
22. A child goes 50 meter towards South and then turning to his right, he goes 50 meter. Then, turning to his
left, he goes 30 meter. Again he turns to his left and goes 50 meter. How far is he from his initial
position?
(a) 30 m (b) 40 m (c) 50 m (d) 80 m
MTP-Oct ‘21
23. Raju walks northwards. After a while, he turns to his right and a little further to his left. Finally, after
walking a distance of one kilometre, he turns to his left again. In which direction is he moving now?
(a) North (b) South (c) East (d) West
24. Ravi wants to go to the College. He starts from his home, which is in the East and comes to a crossing.
The road to the left ends in a theatre, straight ahead is the hospital. In which direction is the College?
(a) North (b) South (c) East (d) West
25. A man is facing south. He turns 135° in the anticlockwise direction and then 180° in the clockwise
direction. Which direction is he facing now?
(a) North-East (b) North-West (c) South-East (d) South-West
26. Rakesh moves towards South-East a distance of 7 m, then he moves towards West and travels a distance
of 14 m. From here he moves towards North-West a distance of 7 m and finally he moves a distance of
4 m towards East and stood at that point. How far is the starting point from where he stood?
(a) 3m (b) 4m (c) 10 m (d) 11 m
27. A and B start moving towards each other from two places 200 m apart. After walked 60 m, B turns left
and goes 20 m, then he turns right and goes 40 m. He then turns right again and comes back to the road
on which he had started walking. If A and B walk with the same speed, what is the distance between
them now?
(a) 20 m (b) 30 m (c) 40 m (d) 50 m
MTP-Nov’21
28. Kamal starts from point ‘O’ and moved towards North 2 km, then he turns right and moved 4 km again
he turned towards North and walked up to 1 km reached at A. Find the distance between OA.
(a) 6 (b) 7 (c) 4 (d) 5
29. When a person faces north and walks 25 m right, and he turns left and walks 20 m and again he turns
right 25 m and turns right and walks 40 m in which direction is he now from his starting point.
(a) North-West (b) North –East (c) South- East (d) South-West
30. Sanjay started from his house towards west. After a walking a distance 15 km he turned to the right and
walked 10 km, he again turned to the right and walked 5 km. After this he turns left at 1350 and covered
10 km in which direction should he is going?
(a) South (b) South-West (c) South-East (d) North –West
31. Raju Walked from A to B in the east 10 m, then he turns towards right and walked 3 m. Again, he turned
to the right and walked 14 m. how far is from is she from point A?
(a) 4 feet (b) 5 feet (c) 12 feet (d) 13 feet
32. Mamtha moved a distance of 75 m towards north, then she turns to the left and walked to about 25 m,
turned left again and walks 80 m. Finally, she turns to the right at angle of 450. In which direction was
she is moving finally?
(a) South-East (b) South-West (c) North-West (d) North-East
MTP-March’22
33. M is to the East of D, F is to the South of D and K is to the West of F. M is in which direction with respect
to K?
(a) South-West (b) North-West (c) North-East (d) South-East
34. A cyclist goes 30 km to North and then turning right & goes to 40 km. Again he turns to his right and goes
20 km. After this he turns to his right and goes 40 km. How far is the from his starting point?
(a) 0 km. (b) 10 km. (c) 25 km. (d) 40 km.
ANSWER KEYS
1. (b) 2. (c) 3. (b) 4. (c)

5. (a) 6. (d) 7. (c) 8. (a)
9. (b) 10. (c) 11. (b) 12. (d)
13. (d) 14. (b) 15. (c) 16. (b)
17. (a) 18. (c) 19. (c) 20. (b)
21. (c) 22. (d) 23. (d) 24. (a)
25. (d) 26. (c) 27. (c) 28. (d)
29. (c) 30. (d) 31. (b) 32. (b)
33. (c) 34. (b)

48 Chapter 10 : Direction Tests

Chapter-11
Seating Arrangements
MTP-March ‘20
1-3 Read the following information carefully and then answer the questions 1, 2 and 3
Six friends A, B, C, D, E and F are sitting on a bench, facing towards North.
I. A is sitting next to B. II. C is sitting left to D.
III. D is not sitting with E. IV. E is on the left end of the bench.
V. C is third position from right.
VI. A is on the right side of B and to the right side of E.
VII. A and C are sitting together.
VIII. F is sitting Right of D.
1. At what position A is sitting?
(a) Between B and C (b) Between D and C
(c) Between E and D (d) Between C and E
2. What is position of B?
(a) Second from right (b) Centre (c) Extreme left (d) Second from left
3. What is position of D?
(a) Extreme from left (b) Extreme right
(c) Third from left (d) Second from right.
4. Six Children A, B, C, D, E and F are sitting in a row facing towards North. C is sitting between A and E, D
is not at the end. B is sitting immediate right of E, F is not at the right of end, but D is sitting 3rd left of
E. Which of the following is immediately right of D.
(a) A (b) F (c) E (d) C
5. Five Friends are sitting on a bench. A is to the left of B but on the right of C, D is to the right ofB but one
the left of E. Who are at the extremes?
(a) A, B (b) A, D (c) C, E (d) B, D
MTP-October ‘19
6. Four girls are A, B, C and D are sitting around a circle facing the centre. B and C are in front of each other,
which of the following is definitely true?
(a) A and D are in front of each other (b) A is not between B and C
(c) D is to the left of C (d) A is to the left of C
7. Seven children A, B, C, D, E, F and G are sitting in a row. G is to be right of D and to the left of B. A is on
the right of C, A and D have one child between them. E and B have two children between them. Who is
exactly in the middle?
(a) A (b) C (c) D (d) G
MTP Oct ‘20, March ‘21
8. Six friends A, B, C, D, E and F are sitting in row facing East. “C “is between ‘A’ and ‘E’. ‘B’ is just to the right
of ‘E but left of D’. ‘F’ is not right end. How many persons are to the left of E ?
(a) 1 (b) 2 (c) 3 (d) 4

MTP March, ‘19
9. Six children A, B, C, D, E and F are sitting in a row. B is between F and D. E is between A and C. However,
A does not stand next to F or D. C does not stand next to D. F is between which of the following pairs of
children?
(a) B and E (b) B and C (c) B and D (d) B and A [MTP Oct ‘20]
10. Five students are A,B,C,D and E are standing in arrow . D is on the right of E; B is on the left of E but on
right of A. D is next to C on his left. T he student in middle is
(a) B (b) A (c) E (d) C
MTP April, 2019
(Q.No.11-13) Study the following information carefully to answer the given questions. Eight person’s P to W
are sitting in front of one another in two rows. Each row has four persons. P is between U and V and facing
North. Q, who is to the imme diate left of M is facing W. R is between T and M and W is to the immediate
right of V.
11. Who is sitting in front of R? [MTP March ‘19]
(a) U (b) Q (c) V (d) P

12. Who is to the immediate right of R? [MTP March ‘19]
(a) M (b) U (c) M or P (d) T
13. In which of the following pairs, persons are sitting in front of each other? [MTP March ‘19]
(a) MV (b) RV (c) TV (d) UR
14. In a college party, 5 girls are sitting in a row. F is to the left of M and to the right of O. R is sitting to the
right of N but to the l eft of O. Who is sitting in the middle?
(a) O (b) R (c) P (d) M
15. Five friends P, Q, R, S and T are sitting in a row facing North. Here, S is between T and Q and Q is to the
immediate left of R. P is to the immediate left of T . Who is in the middle?
(a) S (b) T (c) Q (d) R
16. Five people A, B, C, D and E are seated about a round table. Every chair is spaced equidistant from
adjacent chairs.
I. C is seated next to A
II. A is seated two seats from D.
III. B is not seated next to A.
Which of the following must be true?
(I) D is seated next to B.
50 Chapter 11 : Seating Arrangments

II E is seated next to A.
Select the correct answer from the codes given below:
(a) Only I (b) Only II (c) Both I and II (d) Neither I nor II
MTP Oct ‘20
17. Directions to solve
(a) P, Q, R, S, T, U, V and W are sitting round the circle and are facing the Centre
(b) P is second to the right of T who is the neighbor of R and V.
(c) S is not neighbour of P
(d) V is neighbour of U
(e) Q is not between S and W, W is not between U and S
Who is two of the following are not neighbour
(a) RV (b) UV (c) RP (d) QW
MTP March ‘21
18. Five boys A, B, C, D and E are sitting in a row facing north. A is to the immediate right of B and E is on the
immediate left of B but on the right of C and A is on the left of D. Who is second from the left end?
(a) D (b) A (c) E (d) B
(Q. No 19-20) Read the following information carefully and answer the questions that follow.
Eight friends A, B, C, D, E, F, G and H are sitting in circle facing the center . B is sitting between G and D. H is
third to the left of B and second to the right of A. C is sitting between A and G and B and E are not sitting
opposite to each other ?
19. Who is third to left of D ?
(a) F (b) E (c) A (d) Cannot be determined.
20. Who is sitting between H and D
(a) F (b) E (c) A (d) Cannot be determined.
MTP-March ‘22
Directions (Q 21-22): Study the following information carefully and answer the questions given below.
I. P, Q, R, S, T, U and V are sitting on a wall and all of them are facing West.
II. S is on the immediate left of R.
III. T is at an extreme end and has Q as his neighbor.
IV. V is between Q and U.
V. S is sitting third from the north end.
21. Who is sitting to the left of S ?
(a) Q (b) U (c) T (d) R
22. Which of the following pairs of people are sitting at the extreme ends ?
(a) QV (b) PR (c) TP (d) ST
23. Five girls are sitting on a bench to be photographed. Seema is to the left of Rani and to the right of
Bindu. Mary is to the right of Rani. Reeta is between Rani and Mary. Who is sitting immediate right to
Reeta ?
(a) Bindu (b) Rani (c) Mary (d) Seema
(Directions 24-25) . Four ladies A, B, C and D and four gentlemen E, F, G and H are sitting in circle around a table
facing each other
(i) No two ladies or gentlemen are sitting side by side
(ii) C, who is sitting between G and E , facing D
(iii) F is between D and A and facing G
(iv) H is to the right of B
24. Who is immediate neighbor of B ?
(a) G and H (b) E and F (c) A and B
25. Who is immediate sitting immediately left of A
(a) F (b) E (c) C (d) D
(26-27) Study the following information carefully to answer the questions given below. P, T, V, R, M, D,
K and W are sitting around a circle table facing the centre. V is second to the left of T. T is fourth to the
right of M. D and P are not immediate neighbours of T. D is third to the right of P. W is not an immediate
neighbour of P. P is to the immediate left of K.
MTP-Oct’21
26. Who is Second to the left of K?
(a) P (b) R (c) M (d) W
27. Who is the immediate left of V?
(a) D (b) M (c) W (d) None
28. What is R’s Position with respect to V?
(a) Third to the right (b) Fifth to the right (c) Third to the left (d) Second to the left
29. 8 Persons A, B, C, D, E, F, G and H are sitting in two rows opposite to each other. Each row has four
persons. B and C are sitting in front of each other. C is between D and E. H is sitting immediate left of E.
H and F are diagonally opposite. G and B are not near to each other. Who is in front of A?
(a) E (b) D (c) C (d) B
30. A group of seven singers, facing the audience, are standing in a line on the stage as follow.
(i) D is the right of C.
(ii) F is stand beside G.
(iii) B is to the left of F.
(iv) C and B have one person between them.
(V i) A and D have one person between them.
Who is sitting on the second from extreme right?
(a) D (b) F (c) G (d) E
MTP-Nov’21
31. Five students A, B, C, D, and E are standing in a row. D is right on the E; B is on the left of E but on the right
of A. D is next to C on his left. The student in middle is
(a) B (b) E (c) C (d) A
32. Five children are sitting in row. S is sitting next to P but not T. K is sitting next to R, who is sitting on the
extreme left and T is not sitting next to K . Who are adjacent to S.
(a) K+P (b) R+P (c) Only P (d) P and T

(33-35) Directions to solve
(a) p, Q, R, S, T, U, V and W are sitting round the circle and facing the centre.
(b) P is second to the right of T who is neighbour of R and V.
(c) S is not the neighbour of U.
(d) V is neighbour of U.
(e) Q is not between S and W. W is not between u and S
33. Who is immediate left of V?
(a) P (b) U (c) R (d) T
34. What is the position of R
(a) Between P and T (b) Second to the right of S
(c) to the immediate right of W (d) inadequate data
35. Which of following are not neighbour
(a) UV (b) VT (c) RV (d) PQ
ANSWER KEYS
1 (a) 2 (d) 3 (d) 4 (a)

5 (c) 6 (a) 7 (c) 8 (c)
9 (b) 10 (c) 11 (d) 12 (d)
13 (a) 14 (a) 15 (a) 16 (c)
17 (a) 18 (c) 19 (a) 20 (b)
21 (b) 22 (c) 23 (c) 24 (a)
25 (a) 26 (b) 27 (a) 28 (a)
29 (a) 30 (b) 31 (b) 32 (a)
33 (b) 34 (a) 35 (c)

NOTES

Chapter-12
Blood Relation
MTP-March ‘20
1. Pointing to a lady, a man said, “The son of her only brother is the brother of my wife”. How is lady is
related to man?
(a) Mother’s sister (b) Grandmother (c) Sister of father-in-law (d) Maternal Aunt
2. A family has a man, his wife, their four sons and their wives. The family of every son also 3 sons and one
daughter. Find out the total number of male members in the whole family?
(a) 4 (b) 8 (c) 12 (d) 17
3. Given that
1. A is mother of B. 2. C is son of A. 3. D is brother of E.
4. E is daughter of B.
The grandmother of D is
(a) A (b) B (c) C (d) E
4. Read the following information and answer the question
‘A+B’ means ‘A is the daughter of B’.
‘A ×B’ means ‘A is the son of B’.
‘A – B’ means ‘A is the wife of B’.
If P × Q-S, which of the following is true
(a) S is wife of B (b) S is father of P
(c) P is daughter of Q (d) Q is father of P
MTP October ‘19
5. C is mother of A and B. If D is husband of B, then what is C to D?
(a) Mother (b) Aunt (c) Mother-in-law (d) Sister
6. Read the following information carefully to answer the questions that follow.
I. ‘P + Q’ means ‘P is father of Q’
II. ‘P - Q’ means ‘P is mother of Q’
III. ‘P × Q’ means ‘P is brother of Q’
IV. ‘P ÷ Q’ means ‘P is sister of Q’
Which of the following means ‘M’ is maternal uncle of T?
(a) M÷K-T (b) M×K-T (c) M×K+T (d) M÷K+T
7. Pointing a man to photo graph, a man is said to a woman, “His mother is the only daughter of your
father”. How is the woman is related to the man in the photograph?
(a) Sister (b) Mother (c) Wife (d) Daughter
8. Moni is daughter of Sheela. Sheela is wife of my wife’s brother. How Moni is related to my wife?
(a) Cousin (b) Niece (c) Sister (d) Sister-in-law
MTP-March ‘19
9. C is mother of A and B. If D is the husband of B, then what is C to D
(a) Mother (b) Aunt (c) Mother-in Law (d) Sister
10. A is B’s sister, C is B’s mother, D is C’s father, E is D’s mother, then how is A related D?
(a) Granddaughter (b) Daughter (c) Aunt (d) Father
11. A, Q, Y and Z are different persons. Z is the father of Q. A is the daughter of Y and Y is the son of Z. If P
is the son of Y and B is the brother of P, then
(a) B and Y are brothers (b) A is sister of B
(c) Z is the uncle of B (d) Q and Y are brothers
12. A is father of C and D is son of B. E is brother of A. If C is sister of D how is B related to E?
(a) Sister-in-Law (b) Sister (c) Brother (d) Brother-in-Law
MTP April, ‘19
13. X is the husband of Y. W is the daughter of X. Z is husband of W. N is the daughter of Z. What is the
relationship of N to Y?
(a) Cousin (b) Niece (c) Daughter (d) Grand-daughter
14. ‘A’ reads a book and find the name of the author familiar. T he author ‘B’ is the paternal un cle of ‘C’. ‘C’
is the daughter of ‘A’. How is ‘B’ related to ‘A’?
(a) Brother (b) Sister (c) Father (d) Uncle
15. ‘A’ s mother is sister of B and she has a daughter C who is 21 years old. How is B related to C?
(a) Uncle (b) Maternal Uncle (c) Niece (d) Daughter
MTP Oct ‘20
16. Pointing to a photograph of a boy, Ravi said, “He is son of the only son of my mother”. How is Ravi
related to that boy ?
(a) Brother (b) Uncle (c) Cousin (d) Father
17. If A +B means A is brother of B, A-B means A is sister of B, and A × B means A is the father of B . Which
of the following means that C is the son of M?
(a) M-N×C+F (b) F-C+ N×M (c) N+M-F×C (d) M×N-C+F
18. If D is brother of B and B is related C. To answer this question which of the following statements are
necessary?
I. The son of D is the grandson of C.
II. B is the sister of D.
(a) Only 1 (b) Only II (c) Either I or II (d) I and II
56 Chapter 12 : Blood Realation

19. There are two couple in a family. K has two children. M is wife of O, who is the brother of B. F is daughter
K. U is sister of S, who is son of O. T is the son of B, who is the male. How U is related to T?
(a) Mother (b) Brother (c) Sister (d) Cousin
MTP March ‘21
20. If A+B means A is the sister of B, A x B means A is the wife of B, A % B means A is the father of B and A
– B means A is the brother of B. Which of the following means T is the daughter of P?
(a) PxQ%R+S–T (b) P x Q % R – T + S
(c) PxQ%R+T–S (d) P x Q % R – T + S
21. Anil said “This girl is the wife of the grandson of my mother”. How is Anil related to the girl?
(a) Brother (b) Grandfather (c) Husband (d) Father-in-law
22. P is the mother of K, K is the sister of D. D is the father of J. How is P related to j ?
(a) Mother (b) Grandmother (c) Aunt (d) Data is inadequate.
23. In a family, there are six members A, B, C, D, E and F. A and B are a married couple, A being the male
member. D is the only son of C, who is the brother of A. E is the sister of D. B is the daughter-in-law of
F, whose husband has died. How is E related to C ?
(a) Sister (b) Daughter (c) Cousin (d) Mother
MTP-March ‘22
24. D is daughter of E . A is son of D . C is brother of A and B is sister of A . F is brother of D . How F is related
to B ?
(a) Father-in -Law (b) Uncle (c) Brother (d) Mother-in-law
25. Introducing a boy a girl said, “He is the son of the daughter of the father of my uncle “. Who is the boy
to the girl ?
(a) Brother (b) Nephew (c) Uncle (d) Son-in-law
26. It is given that “A is the mother of B; B is the sister of C; C is the father of D”. How is A related to D?
(a) Mother (b) Grandmother (c) Aunt (d) Sister
27. Rita told Mani, “The girl I met yesterday at the beach was the youngest daughter of the brother-in-law
of my friend’s mother.” How is the girl related to Rita’s friend ?
(a) Cousin (b) Daughter (c) Niece (d) Aunt
28. Sanjay has three daughters, and each daughter has a brother. How many male members are there in the
family?
(a) 4 (b) 2 (c) 3 (d) 1
MTP-Oct ‘21
29. A is the son of C; C and Q are the sisters; Z is the mother of Q and P is the son of Z. Which of the following
statements is true?
(a) A and P are cousins (b) C and P are sisters
(c) P is the maternal uncle of A (d) A is the maternal uncle of P
30. ‘X @ Y’ means ‘X is the mother of Y;
‘X $ Y’ means ‘X is the husband of Y;
‘X # Y’ means ‘X is the sister of Y’.
‘X * Y’ means ‘X is the son of Y’.
Which of the following indicates the relationship ‘A is daughter of P’?
(a) P @ B # F * A (b) P @ B # A * F (c) A # F * B @ P (d) A # F * B $ P
(From Q.31 to Q.33) Read the following information carefully and answer the questions given below?
There are six children playing football, namely P, Q, R, S, T and U. P and T are bothers, U is sister of T, R is the
only son of P’s uncle, Q and S are the daughters of the only brother of R’s father
31. How many female players are there?
(a) one (b) two (c) three (d) Four
32. How is S is related to P
(a) Uncle (b) Sister (c) Niece (d) Cousin
33. Pointing towards photograph. Vinod said, “she is the daughter of my wife’s mother’s only daughter”.
How is Vinod is related to the girl in the Photograph?
(a) Cousin (b) Uncle (c) Father (d) None
MTP-Nov ’21
34. Pointing to a photograph Lalita says, “He is the son of the only son of my grandfather.” How is the man
in the photograph related to Lalita?
(a) Brother (b) Uncle
(c) Cousin (d) Data is inadequate
35. Pointing to a photograph. Ram said, “He is the son of the only daughter of the father of my brother.”
How is Ram related to the man in the photograph?
(a) Nephew (b) Brother (c) Father (d) Maternal Uncle
ANSWER KEYS
1 (c) 2 (d) 3 (a) 4 (b)
5 (c) 6 (b) 7 (b) 8 (b)
9 (c) 10 (a) 11 (b) 12 (a)
13 (d) 14 (a) 15 (b) 16 (d)
17 (d) 18 (d) 19 (d) 20 (b)
21 (d) 22 (b) 23 (b) 24 (b)
25 (a) 26 (b) 27 (a) 28 (b)
29 (c) 30 (d) 31 (c) 32 (b)
33 (c) 34 (a) 35 (d)

58 Chapter 12 : Blood Realation
Chapter-13
Statistical Description of Data
MTP March ‘20

1. Find the number of observations between 250 and 300 from the following data:
Value: More More More More
No. of than than than than
observations: 200 250 300 350
56 38 15 0
(a) 56 (b) 23 (c) 15 (d) 8
2. The difference between Upper limit and lower limit of a class is called [MTP March ‘21]
(a) Class Interval (b) Class boundaries
(c) Mid-Value (d) Frequency
3. The following data relate to the marks of a group of students:
Marks: Below Below Below Below Below
10 20 30 40 50
No. of students: 15 38 65 84 100
How many students got marks more than 30?
(a) 65 (b) 50 (c) 35 (d) 43
4. Median of a distribution can be obtained from
(a) Frequency polygon (b) Histogram
(c) Less than type ogives (d) None of these.
MTP October, ‘19
5. The number of times a particular item occurs in a given data is called its
(a) Variation (b) Frequency
(c) Cumulative frequency (d) None of these
6. Frequency density is used in the construction of
(a) Histogram (b) Ogive (c) Frequency polygon (d) None of these
7. The width of each of ten classes in a frequency distribution is 2.5 and the lower class boundary of the
lowest class is 10.6. Which one of the following is the upper class boundary of the highest class?
(a) 35.6 (b) 33.1 (c) 30.6 (d) None of these
8. Let L be the lower class boundary of a class in a frequency distribution and m be the mid point of the
class. Which one of the following is the higher class boundary of the class?
m+ 2 m+ L
(a) m+ (b) L + (c) 2m–L (d) m-2L
2 2
MTP March, ‘19
9. Statistics is applied in
(a) Economics (b) Business management
(c) Commerce and industry (d) All these.
10. The primary data are collected by
(a) Interview method (b) Observation method
(c) Questionnaire method (d) All these.
11. The best method to collect data, in case of a natural calamity, is [MTP April ‘19]
(a) Personal interview (b) Indirect interview
(c) Questionnaire method (d) Direct observation method
12. ‘Stub’ of a table is the
(a) Left part of the table describing the columns
(b) Right part of the table describing the columns
(c) Right part of the table describing the rows
(d) Left part of the table describing the rows
13. Pie-diagram is used for
(a) Comparing different components and their relation to the total
(b) representing qualitative data in a circle
(c) Representing quantitative data in circle
(d) (b) or (c).
MTP-April ‘19
14. The entire upper part of a table is known as
(a) Caption (b) Stub (c) Box head (d) Body
15. A frequency distribution
(a) Arranges observations in an increasing order
(b) Arranges observation in terms of a number of groups
(c) Relaters to a measurable characteristic
(d) all these.
16. Mode of a distribution can be obtained from
(a) Histogram (b) Less than type ogives
(c) More than type ogives (d) Frequency polygon
17. The following data relates to the incomes of 90 persons:
Income in ` 1500-1999 2000-2499 2500-2999 3000-3499
No.of Persons 13 32 20 25
Which is the percentage of persons earning more than ` 2,000?
(a) 45 (b) 85.56 (c) 52 (d) 55
60 Chapter 13 : Statistical Description of Data

MTP-Oct ‘20
18. The most appropriate diagram to represent the data relating to the monthly expenditure on different
items by a family is ?
(a) Histogram (b) Pie-diagram
(c) Frequency polygon (d) Line graph
19. The distribution of income is an example of frequency distribution of
(a) Continuous variable (b) A discrete variable
(c) An attribute (d) (b) or (c)
20. The number of accidents for seven days in a locality are given below :
No. of accidents : 0 1 2 3 4 5 6
Frequency : 12 15 23 30 9 3 2
What is the number of cases when 3 or less accidents occurred?
(a) 56 (b) 6 (c) 80 (d) 87
MTP March ‘21
21. Histogram is used for presentation of the following type of series
(a) Time Series (b) Continuous Frequency Series
(c) Discrete Series (d) Individual Series
22. The graphical representation of cumulative frequency distribution is called–
(a) Histogram (b) Pie Chart (c) Frequency Polygon (d) Ogive
23. No. of Accidents 0 1 2 3 4 5 6 7
Frequency 36 27 33 29 24 27 18 9
In how many cases 5 or more accidents occur?
(a) 96 (b) 133 (c) 78 (d) 54
MTP-March’22
24. Median of a distribution can be obtained from
(a) Frequency polygon (b) Histogram (c) ogives (d) None of these.
25. Cost of sugar in a month under the heads raw Materials, labour, direct production and others were 12,
20, 35 and 23 units respectively. What is the difference between the central angles for the largest and
smallest components of the cost of sugar?
(a) 72o (b) 48o (c) 56o (d) 92o
26. In a study relating to the labourers of a jute mill in West Bengal, the following information was collected.
‘Twenty per cent of the total employees were females and forty per cent of them were married. Thirty
female workers were not members of Trade Union. Compared to this, out of 600 male workers 500 were
members of Trade Union and fifty per cent of the male workers were married. The unmarried non-
member male employees were 60 which formed ten per cent of the total male employees. The
unmarried non-members of the employees were 80’. On the basis of this information, the ratio of
married male non-members to the married female non-members is
(a) 1: 3 (b) 3: 1 (c) 4: 1 (d) 5: 1
27. For the non-overlapping classes 0—19 , 20—39 , 40—59 the class mark of the class 0—19 is
(a) 0 (b) 19 (c) 9.5 (d) none of these
28. Histogram is useful to determine graphically the value of
(a) Arithmetic Mean (b) Median (c) Mode (d) HM
MTP-Oct’21
29. Statistics is concerned with
(a) Qualitative information (b) Quantitative information
(c) (a) or (b) (d) Both (a) and (b).
30. The primary data are collected by
(a) Interview method (b) Observation method
(c) Questionnaire method (d) All these.
31. The following data relate to the incomes of 86 persons:
Income in ‘ : 500–999 1000–1499 1500–1999 2000–2499
No. of persons : 15 28 36 7
What is the percentage of persons earning more than Rs 1500?
(a) 50 (b) 45 (c) 40 (d) 60
32. The following data relate to the marks of a group of students:
Marks: Below 10 Below 20 Below 30 Below 40 Below 50
No. of students: 15 38 65 84 100
How many students got marks more than 30?
(a) 65 (b) 50 (c) 35 (d) 43
33. The curve obtained by joining the points, whose x- coordinates are the upper limits of the classintervals
and y coordinates are corresponding cumulative frequencies is called
(a) Ogive (b) Histogram (c) Frequency Polygon (d) Frequency Curve
MTP-Nov’21
34. Salaries of employees working in ABC limited is as follows:
Salaries (In thousands) below 10 below 20 below 50 below 100 below 1000
Number of employees 28 34 65 84 123
Find the number of employees with salaries more than 50k?
(a) 65 (b) 84 (c) 39 (d) 58
35. Which of the following is not an example of continuous variable?
(a) Temperature in India (b) Profit of Company X
(c) Number of road accidents (d) A person’s height

ANSWER KEYS
1 (b) 2 (a) 3 (c) 4 (c)

5 (b) 6 (a) 7 (a) 8 (c)
9 (d) 10 (d) 11 (a) 12 (d)
13 (a) 14 (c) 15 (d) 16 (a)
17 (b) 18 (b) 19 (b) 20 (c)
21 (b) 22 (d) 23 (d) 24 (c)
25 (d) 26 (c) 27 (c) 28 (c)
29 (d) 30 (d) 31 (a) 32 (c)
33 (a) 34 (d) 35 (c)

NOTES

Chapter-14
Measures of Central Tendency and Dispersion
MTP March ‘20

1. For open-end classification, which of the following is the best measure of central tendency?
[MTP Oct. ‘19, March ‘19]
(a) AM (b) GM (c) Median (d) Mode
2. In case of an even number of observations which of the following is median?
(a) Any of the two middle-most value
(b) The simple average of these two middle values
(c) The weighted average of these two middle values
(d) Any of these
3. For a moderately skewed distribution, which of the following relationship holds?
[MTP March ‘19, April ‘19]
(a) Mean – Mode = 3 (Mean – Median) (b) Median – Mode = 3 (Mean – Median)
(c) Mean – Median = 3 (Mean – Mode) (d) Mean – Median = 3 (Median – Mode)
4. Two variables x and y are given by y= 2x – 3. If the median of x is 20, what is the median of y?
[MTP Oct. ‘19]
(a) 20 (b) 40 (c) 37 (d) 35
5. If the relationship between two variables u and v are given by 2u + v + 7 = 0 and if the AM of u is 10, then
the AM of v is
(a) 17 (b) –17 (c) –27 (d) 27
6. The appropriate measure of dispersion for open-end classification is
(a) Standard deviation (b) Mean deviation
(c) Quartile deviation (d) All these measures
7. If Rx and Ry denote ranges of x and y respectively where x and y are related by 3x+2y+10=0, what would
be the relation between x and y?
(a) Rx = Ry (b) 2 Rx= 3 Ry (c) 3 Rx= 2 Ry (d) Rx= 2 Ry
8. If x and y are related by 2x+3y+4 = 0 and SD of x is 9, then SD of y is [MTP April ‘19]
(a) 22 (b) 6 (c) 5 (d) 24
9. The quartiles of a variable are 45, 52 and 75 respectively. Its quartile deviation is
(a) 15 (b) 20 (c) 25 (d) 8.30
10. If x and y are related as 3x+4y = 20 and the quartile deviation of x is 16, then the quartile deviation of y
is
(a) 16 (b) 14 (c) 10 (d) 12
11. If x and y are related by y = 2x+ 5 and the SD and AM of x are known to be 5 and 10respectively, then the
coefficient of variation of y is
(a) 25 (b) 30 (c) 40 (d) 20
MTP October ‘19
12. T he mean of the values of 1, 2, 3 …………, n with respective frequencies x, 2x, 3x, ……… nx is
n +1 n 2n + 1 2n + 1
(a) (b) (c) (d)
2 2 3 6
13. The mean of four observations is 10 and when a constant a is added to each observation, the mean
becomes 13. The value of a is
(a) 2 (b) –3 (c) 3 (d) None of these
14. A person travels from A to B at the rate of 20 km/hr and from B to A at the rate of 30km/hr. What is the
average rate of whole journey ? [MTP March ‘21]
(a) 30 km/ hr. (b) 24 km/hr. (c) 35 km/hr. (d) none of these
15. The average salary of a group of unskilled workers is Rs.10,000 and that of a group of skilled workers is
Rs.15,000. If the combined salary is Rs.12,000, then what is the percentage of skilled workers?
(a) 40% (b) 50% (c) 60% (d) none of these
16. The third decile for the numbers 15, 10, 20, 25, 18, 11, 9, 12 is [MTP April ‘19]
(a) 13 (b) 10.70 (c) 11 (d) 11.50
17. If the SD of x is 3, what us the variance of (5–2x)?
(a) 36 (b) 6 (c) 1 (d) 9
18. If the values of all observations are equal then the Standard Deviation of the given observations is
19. The Standard Deviation of a set of 50 items is 10. Find the Standard Deviation if every item is increased
by 5.
20. Find the coefficient of variation if the sum of squared deviations taken from mean 40 of 10 observations
is 360.
21. The average of n numbers is x. If each of the numbers is multiplied by (n+1); then the average of new
set of numbers is
x
(a) x (b) (c) (n + 1).x (d) None of these
n +1
22. The average weight of 8 person increases by 1.5 kg, if a person weighing 65 kg replaced by a new
person, what would be the weight of the new person?
(a) 76 kg (b) 80 kg (c) 77 kg (d) None of these
23. The presence of extreme observations does not affect [MTP March ‘19, April ‘19]
(a) AM (b) Median (c) Mode (d) Any of these.
66 Chapter 14 : Measures of Central Tendency and Dispersion

MTP March ‘19
24. Which of the following results hold for a set of distinct positive observations?
(a) AM = GM = HM (b) HM = GM = AM
(c) AM > GM > HM (d) GM > AM > HM
25. Quartiles are the values dividing a given set of observations into
(a) Two equal parts (b) Four equal parts
(c) Five equal parts (d) None of these
26. If x and y are related by x–y –10 = 0 and mode of x is known to be 23, then the mode of y is
(a) 20 (b) 13 (c) 3 (d) 23
27. What is the value of the first quartile for observations 15, 18, 10, 20, 23, 28, 12, 16?
(a) 17 (b) 16 (c) 12.75 (d) 12
28. If the relationship between two va riables u and v are given by 2u + v + 7 = 0 and if the AM of u is 10, then
the AM of v is
(a) 17 (b) –17 (c) –27 (d) 27
MTP April ‘19
29. Quartiles can be determined graphically using

(a) Histogram (b) Frequency Polygon (c) Ogive (d) Pie chart
30. If there are 3 observations 15, 20, 25 then the sum of deviation of the observations from their AM is
(a) 0 (b) 5 (c) –5 (d) None of these.
31. Which measures of dispersions is not affected by the presence of extreme observations?
(a) Range (b) Mean deviation
(c) Standard deviation (d) Quartile deviation
32. Which measure is based on only the central fifty percent of the observations?
(a) Standard deviation (b) Quartile deviation
(c) Mean deviation (d) All these measures
33. If the profits of a company remain the same for the last ten months, then the standard deviation of
profits for these ten months would be?
(a) Positive (b) Negative (c) Zero (d) (a) or (c)
34. The range of 15, 12, 10, 9, 17, 30 is
(a) 5 (b) 12 (c) 13 (d) 21
35. If the range of x is 2, what would be the range of –3x +50 ?
(a) 2 (b) 6 (c) –6 (d) 44
36. If x and y are related by 2x+3y+4 = 0 and SD of x is 6, then SD of y is
(a) 22 (b) 4 (c) 40 (d) 9
MTP-March ‘19
37. Which one is an absolute measure of dispersion?
(a) Range (b) Mean Deviation (c) Standard Deviation
(d) All these measures
38. The range of 15, 12, 10, 9, 17, 20 is

(a) 5 (b) 12 (c) 13 (d) 11
39. The standard deviation of, 10, 16, 10, 16, 10, 10, 16, 16 is
(a) 4 (b) 6 (c) 3 (d) 0
40. If all the observations are multiplied by 2, then
(a) New SD would be also multiplied by 2 (b) New SD would be half of the previous SD
(c) New SD would be increased by 2 (d) New SD would be decreased by 2.
[MTP OCt ‘20]
(a) 10 (b) 20 (c) 25 (d) 8.30
MTP-Oct ‘20
42. Two variables assume the values 1,2, 3,.. 5 with frequencies as 1, 2, 3, ..5 , then what is the AM ?
(a) 11/3 (b) 15/8 (c) 4.86 (d) 10
43. If there are two groups with 75 and 65 as harmonic means containing 15 and 13 observation then
combined HM is given by [MTP March ‘21]
(a) 70 (b) 72.25 (c) 78 (d) 76
44. Quartile can be determined graphically using
(a) ogive (b) Histogram (c) Pie Chart (d) Frequency Polygon
45. The mean deviation about Mode for the numbers 4/11, 6/11, 8/11, 9/11, 12/11, 8/11 is
(a) 9/15 (b) 12 (c) 6/11 (d) 1/6
46. The range of 28, 22, 40, 20, 15, 50 is
(a) 40 (b) 22 (c) 35 (d) none
47. A shift of origin has no impact on
(a) Mean Deviation (b) Standard Deviation
(c) Quartile Deviation (d) All of these
48. What is the coefficient of variation of the following numbers 53, 52, 61, 60, 64
(a) 18.09 (b) 8.09 (c) 12.23 (d) 15.45
49. The mean and SD for a, b, and 2 are 3 and 1 respectively, the value of ab would be
(a) 3 (b) 11.5 (c) 12 (d) 13
50. If the relation between x and y is 5y -3x = 10 and the mean deviation about mean for x is 12, then the
mean deviation of y about mean is
(a) 9.20 (b) 6.80 (c) 7.20 (d) 15.80
51. Which measure of dispersion is based on all the observations
(a) Standard Deviation (b) Mean Deviation
(c) Quartile Deviation (d) Both (a) and (b)

MTP-March ‘21
52. The sum of the squares of deviations of a set of observations has the smallest value, when the deviations
are taken from their:
(a) A.M. (b) H.M. (c) G.M. (d) None
53. If two variables x and y are related by 2x +3y – 7 = 0 and the mean and mean deviation about mean of x
are 1 and 0.3 respectively, then the co-efficient of mean deviation of y about mean is:
(a) -5 (b) 4 (c) 12 (d) 50
54. If the A.M. and H.M. for two numbers are 5 and 3.2 respectively then the G.M. will be:
(a) 4.05 (b) 16 (c) 4 (d) 4.10
55. What is the coefficient of range for the following distribution?
Class interval 10-19 20-29 30-39 40-49 50-59
Frequency 11 25 16 7 3
(a) 22 (b) 50 (c) 75.82 (d) 72.46
56. G.M is a better measure than others when,
(a) ratios and percentages are given (b) interval of scale is given
(c) Both (a) and (b) (d) Either (a) or (b)
57. The sum of squares of deviation from mean of 10 observations is 250. Mean of the data is 10. Find the
coefficient of variation.
(a) 10% (b) 25% (c) 50% (d) 0%
58. The equation of a line is 5x + 2y = 17. Mean deviation of y about mean is 5. Calculate mean deviation of
x about mean.
(a) -2 (b) 2 (c) -4 (d) None
59. If variance of is x is 5, then find the variance of (2- 3x)
(a) 10 (b) 45 (c) 5 (d) -13
60. Let the mean of the variable ‘x’ be 50, then the mean of u=10+5x will be:
(a) 250 (b) 260 (c) 265 (d) 273
61. If sum of squares of the values = 3390, N = 30 and standard deviation = 7, find out the mean.
62. Which of the following measures of central tendency cannot be calculated by graphical method?
(a) Mean (b) Mode (c) Median (d) Quartile
MTP-March’22
63. For open-end classification, which of the following is the best measure of central tendency?
(a) AM (b) GM (c) Median (d) Mode
(a) 10 (b) 20 (c) 25 (d) 8.30
65. For a moderately skewewd distribution, the median is twice the mean , then the mode is ____ times
the median.
2 3
(a) 3 (b) 2 (c) (d)
3 2
66. If average marks for agroup of 30 girls is 80 , a group of boys is 70 and combined average is 76, then how
many boys are in the group ?
(a) 21 (b) 20 (c) 22 (d) 19
67. The median value of the set of observations 48, 36, 72, 87, 19, 66, 56 and 91
(a) 53 (b) 87 (c) 61 (d) 19
68. If two vriables a and b are related by c= ab then GM.of c =
(a) GM of a +GM of b (b) GM of a×GM of b
(c) GM of a -GM of b (d) GM of a /GM of b
69. The mean weight of 15 students is 110 kg. The mean weight of 5 of them is 100 kg. and of another five
students is 125 kg. then the mean weight of the remaining students is :
70. If the Arithmetic mean between two numbers is 64 and the Geometric mean between them is 16. The
Harmonic Mean between them is ________.
(a) 64 (b) 4 (c) 16 (d) 40
71. If 2x + 3y + 4 = 0 and V(x) = 6 then V(y) is
(a) 8/3 (b) 9 (c) 9 (d) 6
72. The absolute divation are minimum when taken from
(a) Mean (b) Median (c) Mode (d) GM
73. If x and y are related as 3x-4y= 20 then the Quartile divation of x is 12 , then the Quartile deviation of y
is :
(a) 14 (b) 15 (c) 16 (d) 9
MTP-Oct’21
74. If x and y are related by x–y–10 = 0 and mode of x is known to be 23, then the mode of y is
(a) 20 (b) 13 (c) 3 (d) 23
75. If the quartile deviation of x is 6 and 3x + 6y = 20, what is the quartile deviation of y?
(a) 3 (b) 4 (c) 5 (d) 6
76. The median of 27, 30, 26, 44, 42, 51, 37 is

(a) 30 (b) 42 (c) 44 (d) 37
77. Mean of 25,32,43,53,62,59,48,31,24,33 is
(a) 44 (b) 43 (c) 42 (d) 41
78. If the A.M of any distribution be 25 & one term is 18. Then the deviation of 18 from A.M is
(a) 7 (b) -7 (c) 43 (d) none
79. The algebraic sum of the deviations of a frequency distribution from its mean is always,
(a) greater than zero (b) less than zero (c) zero (d) a non-zero number

80. Pooled Mean is also called
(a) Mean (b) Geometric Mean (c) Grouped Mean (d) none
MTP-Nov’21
81. Which of the following is not a criteria for ideal measure of central tendency?
(a) It should be ambiguously defined
(b) It should be simple to compute
(c) It should be based on all the observations
(d) None of these
82. At ABC ltd, the average age of employees is 36. Average age of male employees is 38 and that of
females is 32. Find the ratio of female to male in the company.
(a) 1:3 (b) 2:1 (c) 1:2 (d) 3:1
83. The mean height of girls in class is 162cm while for boys is 182cm. The ratio of number of girls: boys is
1:2. Find the mean height of the whole class
(a) 170 cm (b) 180 cm (c) 154 cm (d) None
84. In the equation 4x+2y = 3, quartile deviation for y is 3. Find the quartile deviation for x.
(a) 4.5 (b) 6 (c) 1.5 (d) None
85. The Standard deviation is independent of change of
(a) Scale (b) Origin (c) Both (a) and (b) (d) None
86. Find D6 for the following observations. 7, 9, 5, 4, 10, 15, 14, 18, 6, 20
(a) 11.40 (b) 12.40 (c) 13.40 (d) 13.80
87. If all the observations are decreased by 4, find the relation between new SD and old SD.
(a) New SD = Old SD/2 (b) New SD = Old SD - 2
(c) New SD = Old SD - 4 (d) Remains unchanged
88. Standard deviation of first n natural number is 2. What is the value of n?
(a) 7 (b) 6 (c) 5 (d) 8
89. Find the variance of 3x+2 if standard deviation of x is 4
(a) 9 (b) 160 (c) 16 (d) 144
90. if the variance of x = 148.6 and mean of x = 40 , then the coefficient of variation is
(a) 37.15 (b) 30.48 (c) 33.75 (d) None
91. The average of 10 observations is 14.4. If the average of first four observations is 16.5. The average of
remaining 6 observations is :
(a) 13.6 (b) 13.0 (c) 13.2 (d) 12.5
92. If the rates return from three different shares are 100%, 200% and 400% respectively. The average rate
of return will be.
(a) 350% (b) 233.33% (c) 200% (d) 300%
93. For a 4 x 7 classification of bivariate data, the maximum number of conditional distributions is :
(a) 11 (b) 28 (c) 35 (d) None
94. Find the two numbers if AM and GM is 10 and 6 respectively
(a) 6, 6 (b) 12, 8 (c) 9, 4 (d) 18, 2
ANSWER KEYS
1 (c) 2 (b) 3 (a) 4 (c)

5 (c) 6 (c) 7 (c) 8 (b)
9 (a) 10 (d) 11 (c) 12 (c)
13 (c) 14 (b) 15 (a) 16 (b)
17 (a) 18 (a) 19 (c) 20 (a)
21 (c) 22 (c) 23 (b) 24 (c)
25 (b) 26 (b) 27 (c) 28 (c)
29 (c) 30 (a) 31 (d) 32 (b)
33 (c) 34 (d) 35 (b) 36 (b)
37 (d) 38 (d) 39 (c) 40 (a)
41 (a) 42 (a) 43 (a) 44 (a)
45 (d) 46 (c) 47 (d) 48 (b)
49 (b) 50 (c) 51 (d) 52 (a)
53 (c) 54 (c) 55 (d) 56 (a)
57 (c) 58 (b) 59 (b) 60 (b)
61 (c) 62 (a) 63 (c) 64 (a)
66 (b) 66 (b) 67 (c) 68 (b)
69 (b) 70 (b) 71 (a) 72 (b)
73 (d) 74 (b) 75 (a) 76 (d)
77 (d) 78 (b) 79 (c) 80 (c)
81 (a) 82 (c) 83 (d) 84 (c)
85 (b) 86 (b) 87 (d) 88 (a)
89 (d) 90 (b) 91 (b) 92 (c)
93 (a) 94 (d)


Chapter-15
Probability and Mathematical Expectation
MTP March, ‘20

1. Three events A, B and C are mutually exclusive, exhaustive and equally likely. What is the probably of
the complementary event of A?
(a) 1/3 (b) 2/3 (c) 3/7 (d) 1
2. What is the chance of picking a spade or an ace not of spade from a pack of 52cards?
(a) 4/13 (b) 2/13 (c) 3/26 (d) 3/18
3. Find the probability that a four-digit number comprising the digits 2, 5, 6 and 7 would be divisible by 4.
(a) 1/4 (b) 1/3 (c) 1/2 (d) 1
4. The probability that an Accountant’s job applicant has a B. Com. Degree is0.85, that he is a CA is 0.30 and
that he is both B. Com. and CA is 0.25 out of 500 applicants, how many would be B. Com. or CA?
(a) 25 (b) 150 (c) 50 (d) 450
5. Rupesh is known to hit a target in 5 out of 9 shots whereas David is known to hit the same target in 6 out
of 11 shots. What is the probability that the target would be hit once they both try?
(a) 79/99 (b) 10/13 (c) 14/26 (d) 13/18
6. In connection with a random experiment, it is found that
P(A) = 2/3, P(B) =3/5 and P(AUB) = 5/6, find P(A/B)
(a) 7/18 (b) 1/13 (c) 5/18 (d) 13/18
7. In a business venture, a man can make a profit of Rs. 50,000 or incur a loss of Rs. 20,000. The probabilities
of making profit or incurring loss, from the past experience, areknown to be 0.75 and 0.25 respectively.
What is his expected profit?
(a) Rs. 33,500 (b) Rs. 34,500 (c) Rs. 35,500 (d) Rs. 32,500
8. Find the probability of a success for the binomial distribution satisfying thefollowing relation
4 P (x = 4) = P (x = 2) and having the parameter n as six.
(a) 1/3 (b) 1/2 (c) 1/5 (d) 1/8
9. An experiment succeeds thrice as after it fails. If the experiment is repeated 5times, what is the
probability of having no success at all?
(a) 1/1023 (b) 1/1024 (c) 1/1005 (d) 1/1008
MTP October, ‘19
10. If one card is drawn at random from a pack of playing cards; find the probability it is neither a hearts nor
a club:
(a) ½ (b) ¼ (c) 1/8 (d) None of these
11. Three balls are drawn at random from a bag containing 6 blue and 4 red balls. What is the chance that 2
balls are blue and 1 is red?
(a) ¼ (b) ¾ (c) ½ (d) None of these
1 2
12. The probability that a person travels by a plane is and that he travels by train is Find the probability
5 3
of his traveling neither by plane nor by train?
13 2 1
(a) (b) (c) (d) None of these
15 15 15
13. Let X be a random variable with the following distribution
X -2 4 8
P(x) 1/6 1/3 1/2
Find expected value of the random variable
(a) 5 (b) 6 (c) 7 (d) 8
MTP-April ‘19
14. If for two events A and B, P(A  B) = P(A) x P(B), then the two events A and B are
(a) Independent (b) Dependent (c) Not equally likely (d) Not exhaustive.
15. Addition Theorem of Probability states that for any two events A and B,
(a) P(A  B) = P(A) + P(B) (b) P(A  B) = P(A) + P(B) + P(A  B)
(c) P(A  B) = P(A) + P(B) – P(A  B) (d) P(A  B) = P(A) P(B)
16. If a random variable x assumes the values x1, x2, x3, x4 with corresponding probabilities p1, p2, p3, p
4 then the expected value of x is
(a) p1+ p2+ p3+ p4 (b) x1p1 + + x2p3 + x3p2+ x4p4
(c) p1x1+ p2x2+ p3x3 + p4x4 (d) none of these.
17. If an unbiased die is rolled once, the odds in favour of getting a point which is a multiple of 3 is
(a) 1:2 (b) 2:1 (c) 1:3 (d) 3:1
18. A, B, C are three mutually independent with probabilities 0.3, 0.2 and 0.4 respectively. What is P (ABC)?
(a) 0.400 (b) 0.240 (c) 0.024 (d) 0.500
19. What is the chance of throwing at least 7 in a single cast with 2 dice?
(a) 5/12 (b) 7/12 (c) 1/4 (d) 17/36
MTP March ‘19
20. If P(A  B) = 0, then the two events A and B are
(a) Mutually exclusive (b) Exhaustive
(c) Equally likely (d) Independent.
21. If A, B and C are mutually exclusive and exhaustive events, then P(A) + P(B) + P(C) equals to
1
(a) (b) 1 (c) 0
3
(d) any value between 0 and 1.
22. Variance of a random variable x is given by
(a) E (x –  )2 (b) E [x – E(x)]2 (c) E (x2 -  ) (d) (a) or (b)
23. If a c ard is drawn at random from a pack of 52 cards, what is the chance of getting a Spade or an ace?
(a) 4/13 (b) 5/13 (c) 0.25 (d) 0.20
24. Given that P (A) = 1/2, P (B) = 1/3, P (AB) = 1/4, what is P (A’/B’)
(a) 1/2 (b) 7/8 (c) 5/8 (d) 2/3
74 Chapter 15 : Probability
MTP Oct ‘20
25. An investment consultant predicts that the odds against the price of a certain stock going up are 2:1 and
odd are in favor of the price remaining the same are 1:3 .what is the probability that the price of stock
will go down ?
(a) 5/12 (b) 7/12 (c) 1/3 (d) 1/4
26. A pair of dice rolled. If the sum of the two dice is 9, find the probability that one of the dice showed is
3
(a) 1/3 (b) ¼ (c) ½ (d) 1/8
27. The overall percentage of failures in a certain examination was 30. What is the probability that out of
a group f 6 candidates at least four passed the examination?
(a) 0.747331 (b) 0.757331 (c) 0.76991 (d) 0.72339
28. What is the probability of getting neither total of 7 nor 11 when the pair of dice is tossed?
(a) 7/9 (b) 2/9 (c) 3/9 (d) 4/9
29. What is the probability that a leap year selected at random contains either 53 Sundays or 53 Mondays
(a) 2/7 (b) 3/7 (c) 4/7 (d) 1/7
30. if A and B are two events, such that P(A) = ¼, P(B) = 1/3 and P(AUB)=1/2, then P(B/A) is equal to
(a) ¾ (b) ½ (c) ¼ (d) 1/3
31. What is the probability of getting exactly 2 head in 7 tosses of a fair coin?
(a) 5/64 (b) 7/64 (c) 7/128 (d) 21/128
MTP March ‘21
32. If X and Y are two random variables then v(x+y ), when x is independent of y
(a) v (x) + v(y) (b) v(x) + v(y) – 2 v (x,y)
(c) v(x) + v(y) + 2 v (x,y) (d) v (x) – v (y)
33. In a non-leap year, the probability of getting 53 Sundays or 53 Tuesday or 53 Thursday is :
(a) 4/7 (b) 2/7 (c) 3/7 (d) 1/7
34. If A and B are two events and P (A) = 2/3, P(B) =3/5, P (Α  B) = 5/6, then the value of P (Α' /B') is :
(a) ¼ (b) 5/12 (c) 5/8 (d) 5/4
35. The odds are 9:5 against a person who is 50 years living till he is 70 and 8:6 against a person who is 60
living till he is 80. Find the probability that at least one of them will be alive after 20 years.
(a) 11/14 (b) 22/49 (c) 31/49 (d) 35/49
MTP-March ‘22
36. For a probability of a random variable x is given below :
X: 1 2 4 5 6
P: 0.15 0.25 0.2 0.3 0.1
What is the Standrard deviation of x ?
(a) 1.49 (b) 1.56 (c) 1.69 (d) 1.72
37. Given that for two events A and B, P (A) = 3/5, P (B) = 2/3 and P (A U B) = 3/4, what is P (A/B)?
(a) 0.655 (b) 13/60 (c) 31/60 (d) 0.775
38. X and Y stand in a line with 6 other people. What is the probability that there are 3 persons between
them?
(a) 1/5 (b) 1/6 (c) 1/7 (d) 1/3
39. Four unbiased coins are tossed simultaneously. The expected number of heads is :
X: 0 1 2 3 4
P(x) 1/16 4/16 6/16 4/16 1/16
(a) 1 (b) 2 (c) 3 (d) 4
40. Assume that the proabailityfor rain on a day is 0.4 . An umbrella salesman can earn ` 400 per day in case
of rain on that day will lose ` 100 per day if there is no rain . The expected eranings (in `) per day of the
salesman is
(a) 400 (b) 200 (c) 100 (d) 0
41. What is the probability of getting 3 heads if 6 unbaised coins are tossed simultaneously ?
(a) 0.3125 (b) 0.25 (c) 0.6825 (d) 0.50
MTP-Oct’21
42. Following are the wages of 8 workers in rupees: 50, 62, 40, 70, 45, 56, 32, 45. If one of the workers is
selected at random, what is the probability that his wage would be lower than the average wage?
(a) 0.625 (b) 0.500 (c) 0.375 (d) 0.450
43. A problem in probability was given to three CA students A, B and C whose chances of solving it are 1/3,
1/5 and 1/2 respectively. What is the probability that the problem would be solved?
(a) 4/15 (b) 7/8 (c) 8/15 (d) 11/15
44. A packet of 10 electronic components is known to include 2 defectives. If a sample of 4 components is
selected at random from the packet, what is the probability that the sample does not contain more
than 1 defective?
(a) 1/3 (b) 2/3 (c) 13/15 (d) 3/15
45. The probability that there is at least one error in an account statement prepared by 3 persons A, B and
C are 0.2, 0.3 and 0.1 respectively. If A, B and C prepare 60, 70 and 90 such statements, then the expected
number of correct statements
(a) 170 (b) 176 (c) 178 (d) 180
46. A bag contains 6 white and 4 red balls. If a person draws 2 balls and receives ` 10 and ` 20 for a white
and red balls respectively, then his expected amount is
(a) ` 25 (b) ` 26 (c) ` 29 (d) ` 28
MTP-Nov’21
47. If X and Y are two random variables and if E(X) =3 and E(Y) = 6, then E(XY) = ?
(a) 3 (b) 6 (c) 18 (d) 24
48. An unbiased coin is tossed 6 times. Find the probability that the tosses result in heads only,
(a) 1/64 (b) 5/64 (c) 10/64 (d) None
49. In a Binomial Distribution B (n, p), n= 4, then P (x=2) = 3 P (x= 3) find P
(a) 1/3 (b) 2/3 (c) 6/4 (d) 4/3
50. One card is drawn from a pack of 52 , what is the probability that it is a king or queen ?
(a) 11/13 (b) 2/13 (c) 1/13 (d) None
51. The probability that a leap year has 53 Wednesday is
(a) 2/7 (b) 5/3 (c) 2/3 (d) 1/7
52. A coin is tossed six times, then the probability of obtaining heads and tails alternatively is
(a) ½ (b) 1/64 (c) 1/32 (c) 1/16
53. Two different dice are thrown simultaneously, then the probability, that the sum of two numbers
appearing on the top of dice 9 is
(a) 8/9 (b) 1/9 (c) 7/9 (d) None
54. The probability distribution of the demand for a commodity is given below
Demand (x) 5 6 7 8 9 10
Probability: P(x) 0.05 0.10 0.30 0.40 0.10 0.05
The expected value of demand will be :
(a) 7.55 (b) 7.85 (c) 1.25 (d) 8.35
55. A bag contains 4 Red and 5 Black balls. Another bag contains 5 Red and 3 Black balls. If one ball is drawn
at random each bag. Then the probability that one Red and One Balck is
(a) 12/72 (b) 25/72 (c) 37/72 (d) 13/72
ANSWER KEYS
1 (b) 2 (a) 3 (b) 4 (d)
5 (a) 6 (d) 7 (d) 8 (a)
9 (b) 10 (a) 11 (c) 12 (b)
13 (a) 14 (a) 15 (c) 16 (c)
17 (a) 18 (c) 19 (b) 20 (a)
21 (b) 22 (d) 23 (a) 24 (c)
25 (a) 26 (c) 27 (a) 28 (a)
29 (b) 30 (d) 31 (d) 32 (a)
33 (c) 34 (b) 35 (c) 36 (c)
37 (d) 38 (c) 39 (b) 40 (c)
41 (a) 42 (b) 43 (d) 44 (c)
45 (c) 46 (d) 47 (c) 48 (a)
49 (a) 50 (b) 51 (a) 52 (c)
53 (b) 54 (a) 55 (c)

Chapter-16
Probability Distribution
MTP October, ‘19

1. Find the probability that at least 5 defective bolts will be found in a box of 200 bolts. If it is known that
2% of such bolts are expected to be defective (Given: e–4 = 0.0183)
(a) 0.4717 (b) 0.3717 (c) 0.3017 (d) None of these
2. If the two quartiles of a normal distribution are 47.30 and 52.70 respectively, find the mean deviation
about median of thisdistribution.
(a) 3.80 (b) 3.40 (c) 3.20 (d) 4.20
MTP March, ‘20
3. X follows normal distribution with mean as 50 and variance as 100. What is
P(x > 60)? [Given φ(1) = 0.8413 ]
(a) 0.20 (b) 0.40 (c) 0.16 (d) 0.30
4. Number of misprints per page of a thick book follows
(a) Normal distribution (b) Poisson distribution
(c) Binomial distribution (d) Standard normal distribution
5. If for a Poisson variable X, f(2) = 3 f(4), what is the variance of X?
(a) 2 (b) 4 (c) 2 (d) 3
6. If the points of inflexion of a normal curve are 40 and 60 respectively, then its mean deviation is
[MTP April ‘19, March ‘19]
(a) 8 (b) 10 (c) 12 (d) 15
MTP October, ‘19
7.    
If x & y are two independent variables such that x ~ B n1 ,P and y ~ B n2 ,P then the parameter of Z =
x+y is
(a) (n1+n2), P (b) (n1–n2), P
(c) (n1+n2), 2P (d) None of these
8. Five coins tossed 3200 times. The number of times 5 heads appeared is
(a) 500 (b) 1200 (c) 200 (d) 100
9. For the normal distribution density function f(x) = k.e

x 2
- 6x + 9 
, the mean and variance are
8
(a) (2,3) (b) (3,2) (c) (4,3) (d) (3,4)
10. The mean deviation of normal distribution is 16. The Quartile Deviation is
(a) 40/3 (b) 20/3 (c) 100/3 (d) 50/3
2
1 -  x -10 
11. The Quartile Deviation of the normal distribution f(x) = e , - < X < 
18π 18
(a) 3 (b) 4/3 (c) 2 (d) ¾
12. If x and y are two independent normal random distributions with mean and SD’s are (10, 5) and (15, 12)
these mean and SD of (x+y) is
(a) (27, 15) (b) (10, 27) (c) (25,13) (d) (12,25)
MTP April, ‘19
13. A binomial distribution is
(a) never symmetrical (b) never positively skewed
(c) never negatively skewed (d) symmetrical when p = 0 .5
14. The maximum value of the variance of a binomial distribution with parameters n and p is
[MTP March ‘19]
(a) n/2 (b) n/4 (c) np (1 – p) (d) 2n
15. Which one is uniparametric distribution?
(a) Binomial (b) Poisson (c) Normal
(d) Hyper geometric
16. The mean deviation about median of a standard normal variate is
(a) 0.675  (b) 0.675 (c) 0.80  (d) 0.80
2
-(x-10)
1
17. What is the first quartile of X having the following probability density function? f(x) = e 72 for
72
- <x <
(a) 4 (b) 5 (c) 5.95 (d) 6.75
MTP March, ‘19
18. The total area of the normal curve is [MTP Oct. ‘20]
(a) one. (b) 50 per cent. (c) 0.50.
(d) any value between 0 and 1.
19. The interval (µ - 3  , µ + 3  ) covers
(a) 95% area of a normal distribution. (b) 96% area of a normal distribution.
(c) 99% area of a normal distribution. (d) all but 0.27% area of a normal distribution.
20. If the mean deviation of a normal variable is 16, what is its quartile deviation?
(a) 10.00 (b) 13.50 (c) 15.00 (d) 12.05
21. For Poisson fitting to an observed frequency distribution
(a) we equate the Poisson parameter to the mean of the frequency distribution.
(b) we equate the Poisson parameter to the median of the distribution.
(c) we equate the Poisson parameter to the mode of the distribution.
(d) none of these.
80 Chapter 16 : Probability Distribution

MTP Oct ‘20
22. The Binomial Distribution for which mean = 15 and variance = 6.0 is
(a) 25 C
x
(3/5)x (2/5)25-x (b) 25 C
x
(2/5)x (3/5)25-x
(c) 25 C
x
(2/5)x (3/5)1-x (d) 25 C
x
(3/5)x (2/5)1-x
23. The SD of a binomial distribution with parameter n and p is
(a) n (1– p) (b) np (1 – p) (c) np (d) np  1 - p  .
24. If P(X=2) = P(X=3) for a Poisson Variate X, then E(x) is

(a) 2 (b) 3 (c) 1 (d) none
25. The mean and mode of the normal distribution
(a) may be equal (b) may be different (c) are always equal (d) (a) or (b)
MTP March ‘21
26. In normal distribution what is the ratio of QD:MD:SD
(a) 12:10:15 (b) 15:10:12 (c) 10:15;12 (d) 10:12:15
27. Area covered normal curve by   3
(a) 68.28% (b) 95.96% (c) 99.73% (d) 99.23%
28. If x is binomial variate with parameter 15 and 1/3 what is the value of mode of the distribution.
(a) 5&6 (b) 5.5 (c) 5 (d) 6
29. In Poisson distribution which of the following is same.
(a) Mean and variance. (b) Mean and SD
(c) Both (d) None of these
30. The Quartile Deviation of Normal Distribution with mean is 10 and variance is 16 is
(a) 54.24 (b) 23.20 (c) 0.275 (d) 2.70
31. What is the standard deviation of number recoveries among 48 patients when the probability of
recovering is 0.75 ?
(a) 36 (b) 81 (c) 9 (d) 3
MTP-March’22
32. The mode of the binomial distribution for which the mean is 4 varaince 3 is equal to ?
(a) 4 (b) 4.5 (c) 4.25 (d) 4.1
33. For Poisson Distribution :
(a) Mean and Standard Deviation are equal (b) Mean and Vraince are equal
(c) Standard Devaiation and Variance are equal (d) Both (a) and (b) are equal
34. If avaraiate x has , mean>variance , then the distribution will be ____
(a) Binomial Distribution (b) Poisson Distribution
(c) Normal Distribution (d) T-Distribution
35. An example of a bi-parametric continuous probability distribution
(a) Binomial (b) Poisson (c) Normal (d) Chi-square
36. For a poisson variate X, P(x=2) =3 P(x=4) , then the standard deviation of X is
(a) 2 (b) 4 2 (c) (d) 3
37. What is the mean of X having the following density function ?
1
e -
 x -10 2
f(x) = 4 for -  < x < 
2 32
MTP-Oct’21
38. What is the first quartile of X having the following probability density function?
2
1 -  x -10 
f(x) = e for -  < x < 
72π 72
(a) 4 (b) 5 (c) 5.95 (d) 6.75
39. If X follows normal distribution with  = 50 and  = 10, what is the value of
P (x < 60 / x > 50)?
(a) 0.8413 (b) 0.6826 (c) 0.1587 (d) 0.7256
 (1) = 0.8413
40. For a normal distribution with mean as 500 and SD as 120, what is the value of k so that the interval [500,
k] covers 40.32 per cent area of the normal curve? [Given  (1.30) = 0.9032.]
(a) 740 (b) 750 (c) 656 (d) 800
41. If the mean deviation of a normal variable is 16, what is its quartile deviation?
(a) 10.00. (b) 13.50. (c) 15.00. (d) 12.05.
42. For a Poisson variate X, P (X = 1) = P (X = 2). What is the mean of X?
(a) 1.00. (b) 1.50. (c) 2.00. (d) 2.50.
43. The variance of a binomial distribution with parameters n and p is
(a) np2 (1 – p) (b) np 1 -p  (c) nq (1 – q) (d) n2p2 (1– p)2
MTP-Nov’21
44. Number of defects in clothes a garments showroom will form a
(a) Poisson distribution (b) Normal distribution
(c) Binomial distribution (d) Cannot be determined

45. Probability distribution may be
(a) Discrete (b) Continuous (c) Infinite (d) (a) or (b)
46. In a certain Poisson frequency distribution, the probability corresponding to two success is half the
probability corresponding to three successes. The mean of the distribution is
(a) 6 (b) 12 (c) 3 (d) 2.45
47. The normal curve is
(a) Positively skewed (b) Negatively skewed
(c) Symmetrical (d) All these
48. An example of a bi-parametric discrete Probability distribution is
(a) Binomial distribution (b) Poisson Distribution
(c) Normal Distribution (d) Both (a) and (b)
49. For a normal distribution Q1 = 54.32 and Q3 = 78.86, then the median of the distribution is
(a) 12.17 (b) 39.43 (c) 66.59 (d) None
ANSWER KEYS
1 (b) 2 (c) 3 (c) 4 (b)
5 (a) 6 (a) 7 (a) 8 (d)
9 (d) 10 (a) 11 (c) 12 (c)
13 (d) 14 (b) 15 (b) 16 (d)
17 (c) 18 (a) 19 (d) 20 (b)
21 (a) 22 (a) 23 (d) 24 (b)
25 (c) 26 (d) 27 (c) 28 (c)
29 (a) 30 (d) 31 (d) 32 (a)
33 (b) 34 (a) 35 (c) 36 (c)
37 (a) 38 (c) 39 (b) 40 (c)
41 (b) 42 (c) 43 (c) 44 (a)
45 (d) 46 (a) 47 (c) 48 (a)
49 (c)
NOTES

Chapter-17
Correlation and Regression
MTP March, ‘20

1. What is spurious correlation? [MTP Oct. ‘19, March ‘19]
(a) It is a bad relation between two variables.
(b) It is very low correlation between two variables.
(c) It is the correlation between two variables having no causal relation.
(d) It is a negative correlation.
2. When r = 1, all the points in a scatter diagram would lie
(a) On a straight line directed from lower left to upper right
(b) On a straight line directed from upper left to lower right
(c) On a straight line (d) Both (a) and (b)
3. If the coefficient of correlation between two variables is 0.8 then the percentage of variation
unaccounted for is
(a) 70% (b) 30% (c) 51% (d) 36%
4. If for two variable x and y, the covariance, variance of x and variance of y are 40, 16 and 256 respectively,
what is the value of the correlation coefficient?
(a) 0.01 (b) 0.625 (c) 0.4 (d) 0.5
5. If the relation between x and u is 3x + 4u + 7 = 0 and the correlation coefficient between x and y is –0.6,
then what is the correlation coefficient between u and y?
(a) –0.6 (b) 0.8 (c) 0.6 (d) –0.8
MTP October, ‘19
6. If two variables are independent their covariance is
(a) 1 (b) -1 (c) 0 (d) None of these
7. If two regression coefficients are 4 and 16, the percentage of unexplained variation is
(a) 64 (b) 36 (c) 54 (d) 46
8. The covariance between two variables x and y is 72. The variances of x and y are 144 and 84. The
coefficient of correlation is
(a) 1/3 (b) 4/5 (c) 2/3 (d) 3/5
9. If the coefficient of determination is 0.64 and the regression coefficient of x on y is 4 then the regression
coefficient y on x is [MTP April ‘19]
(a) 0.32 (b) 0.16 (c) 0.48 (d) 0.96
MTP April, ‘19
10. Correlation analysis aims at
(a) Predicting one variable for a given value of the other variable
(b) Establishing relation between two variables
(c) Measuring the extent of relation between two variables
(d) Both (b) and (c).
11. The two lines of regression become identical when [MTP Oct. ‘20]
(a) r= 1 (b) r = –1 (c) r = 0 (d) (a) or (b)
12. If the coefficient of correlation between two variables is 0.7 then the percentage of variation
unaccounted for is
(a) 70% (b) 30% (c) 51% (d) 49%
13. If the regression coefficient of y on x is 2.5, the correlation coefficient 0.6 and the SD is y of is 4, the SD
of x is
(a) 0.64 (b) 0.24 (c) 0.96 (d) 1.44
MTP March, ‘19
14. The covariance between two variables is [MTP Oct. ‘20]
(a) Strictly positive (b) Strictly negative
(c) Always 0 (d) Either positive or negative or zero.
15. If r = 0.6 then the coefficient of non -determination is
(a) 0.4 (b) –0.6 (c) 0.36 (d) 0.64
16. If the sum of squares of difference of ranks, given by two judges A and B of 8 students in 21, what is the
value of rank correlation coefficient?
(a) 0.7 (b) 0.65 (c) 0.75 (d) 0.8
MTP Oct ‘20
17. Bivariate Data are the data collected for
(a) Two variables.
(b) More than two variables.
(c) Two variables at the same point of time.
(d) Two variables at different points of time.
18. The regression coefficients remain unchanged due to a
(a) Shift of origin (b) Shift of scale (c) Both (a) and (b) (d) (a) or (b).
19. If the coefficient of correlation between two variables is –0 .9, then the coefficient of determination is
(a) 0.9 (b) 0.81 (c) 0.1 (d) 0.19
20. When r = 0 then cov (x,y) is equal to
(a) +1 (b) – 1 (c) 0 (d) none
21. Correlation coefficient r, bxy and byx are all have ___ signs
(a) different (b) same (c) both (d) none
86 Chapter 17 : Correlation and Regression

22. If u+5x = 6 and 3y-7v = 20 and correlation coefficient between x and y is 0.58 then what be the correlation
coefficient between U and V ?
(a) 0.58 (b) -0.58 (c) -0.84 (d) 0.84
23. The coefficient of two variables is 0.9, then coefficient of non-determination is
(a) 0.9 (b) 0.19 (c) 0.81 (d) 0.1
24. If y = 3x+4 is the regression line y on x and the arithmetic mean of x is -1, what is the arithmetic mean
of y
(a) 1 (b) -1 (c) 7 (d) none of these
MTP-March’22
25. The regression coefficients remain unchanged due to
(a) Shift to origin (b) Shift to scale (c) Always (d) Never
26. If the plotted points in a scatter diagram lie from upper left to lower right, then the correlation is
(a) Positive (b) Zero (c) Negative (d) none of these.
27. The covraince between two variables X and Y is 8.4 and their variances are 25 and 36 respectively
.Calculate karl Pearson’s coefficient of correlation between them.
(a) 0.82 (b) 0.28 (c) 0.01 (d) 0.09
MTP-Oct’21
28. For a p x q classification of bivariate data, the maximum number of conditional distributions is
(a) p (b) p + q (c) pq (d) p or q
29. For a p x q bivariate frequency table, the maximum number of marginal distributions is
(a) p (b) p + q (c) 1 (d) 2
30. If the covariance between two variables is 20 and the variance of one of the variables is 16, what would
be the variance of the other variable?
(a) S2y > 25 (b) More than 10 (c) Less than 10 (d) More than 1.25
31. If the regression line of y on x and of x on y are given by 2x + 3y = –1 and 5x + 6y = –1 then theMarithmetic
means of x and y are given by
(a) (1, –1) (b) (–1, 1) (c) (–1, –1) (d) (2, 3)
MTP-Nov’21
32. The coefficients of correlation between two variables x and y is the simple _______ of two regression
coefficients.
(a) Harmonic Mean (b) Arithmetic Mean
(c) Geometric Mean (d) None
33. There are two equations: m + 3p = 2 and 6n + 2q = 1. Correlation coefficients for p and q is 0.5. Find the
correlation coefficients of m and n
(a) 0.6 (b) 0.5 (c) 0.5 (d) None
34. If r=0, regression lines are:
(a) Perpendicular (b) Parallel
(c) They coincide (d) Cannot be determined
35. Below scatter diagram shows what type of correlation
(a) Perfect negative correlation (b) Negative correlation
(c) Positive correlation (d) Perfect positive correlation
ANSWER KEYS
1 (c) 2 (a) 3 (d) 4 (b)
5 (c) 6 (c) 7 (b) 8 (c)
9 (b) 10 (d) 11 (d) 12 (d)
13 (c) 14 (d) 15 (d) 16 (c)
17 (c) 18 (c) 19 (b) 20 (c)
21 (b) 22 (b) 23 (b) 24 (a)
25 (a) 26 (c) 27 (b) 28 (b)
29 (d) 30 (a) 31 (a) 32 (c)
33 (c) 34 (a)
35 (a)

88 Chapter 17 : Correlation and Regression

Chapter-18
Index Number
Index Number
MTP March ‘20
1. Fisher’s index number satisfies the _______ tests
(a) Time Reversal Test (b) Factor Reversal Test
(c) both (d) none
2. Fisher’s ideal index number is
(a) The Median of Laspeyre’s and Paasche’s index numbers
(b) The Arithmetic Mean of Laspeyre’s and Paasche’s index numbers
(c) The Geometric Mean of Laspeyre’s and Paasche’s index numbers
(d) None of these
MTP October ‘19
3. Circular test is the extension of
(a) Unit test (b) Factor reversal test
(c) Time reversal test (d) None of these
4. Unit test is not satisfied by
(a) Fischers Index number (b) Laspyers Index number
(c) Simple GM of price relatives (d) Bowleys Index number
5. The best average construction of Index number is
(a) AM (b) GM (c) HM (d) none of these
6. The Paasches and Fishers index numbers are 169 and 156 respectively, then Laspyre’s Index number is
(a) 144 (b) 152 (c) 148 (d) 151.5
MTP April ‘19
7. Chain index is equal to
Link relative of current year × chain index of the current year
(a)
100
Link relative of previous year × chain index of the current year

(b)
100
Link relative of current year × chain index of the previous year

(c)
100
Link relative of previous year × chain index of the previous year

(d)
100
8. The formula should be independent of the unit in which of the following :
(a) Unit T est (b) Time Reversal Test
(c) Factor Reversal Test (d) none
Paper 3 : Business Maths and LR & Stats : Compiler 89
9. The formula for conversion to current value
Price Index of the current year
(a) Deflated value =
previous value
Price Index of the current year

(b) Deflated value =
current value
Price Index of the previous year
(c) Deflated value =
previous year
Price Index of the previous year

(d) Deflated value =
previous value
MTP March, ‘19

10. Weighted G.M. of relative formula satisfy ________test
(a) Time Reversal Test (b) Circular test
(c) Factor Reversal Test (d) none
11. Laspyre's method and Paasche’s method do not satisfy
(a) Unit Test (b) Time Reversal Test
(c) Factor Reversal Test (d) b and c
12. Fisher’s index number is based on
(a) The Arithmetic mean of Laspeyre’s and Paasche’s index numbers.
(b) The Median of Laspeyre’s and Paasche’s index numbers.
(c) The Mode of Laspeyre’s and Paasche’s index numbers.
(d) The GM of Laspeyre’s and Paasche’s index numbers.
13. Purchasing Power of Money is
(a) Reciprocal of price index number. (b) Equal to price index number.
(c) Unequal to price index number. (d) None of these.
MTP Oct ‘20
14. Factor Reversal test is satisfied by

(a) Fisher’s Ideal Index Number (b) Laspeyre’s Index Number
(c) Paasche’s Index Number (d) All of the above
15. During the certain period the C.L.I. goes up from 110 to 200 and the Salary of a worker is also raised from
330 to 500, then the real terms is
(a) Loss by ` 50 (b) Loss by ` 75 (c) Loss by ` 90 (d) None of these.
16. The number of tests adequacy is
(a) 2 (b) 5 (c) 3 (d) 4
17. In year 2005, the whole sale price index number is 286 with 1985 as base year, then how much the prices
have increased in 2005 in comparison to 1995 ?
(a) 286% (b) 386% (c) 86% (d) 186%
90 Chapter 18 : Index Number

MTP March ‘21
18. Fishers Price Index number is equal is
(a) G. M of Kelly’s Price Index number and Paasche’s Price Index number
(b) G.M of Laspyres and Paaches Price Index number
(c) G.M of Bowley’s price index number and Paasche’s Index number.
(d) None of these
19. The prices of commodity in the year 2015 and 2020 were 25 and 30 respectively taking 2015 as base year
the price relative is ............
(a) 109.8 (b) 110.25 (c) 113.25 (d) 83.33
20. For year 2015, price index was 267% with base year 2005. The percentage increase in price index over
base year 2005 is:
(a) 267% (b) 67% (c) 167% (d) None of these
MTP-March’22
21. The index number for the year 2012 taking 2011 as the base year from the data given below by using
simple average of price relative method is
Commodity A B C D E
Price in 2011 115 108 95 80 90
Price in 2012 125 117 108 95 95
(a) 112 (b) 117 (c) 120 (d) 111
22. Suppose a business executive was earning ` 2,050 in the base period. What should be his salary in the
current period if his standard of living is to remain the same? Given  w = 25 and  IW = 3544:
(a) ` 2096 (b) ` 2906 (c) ` 2106 (d) ` 2306
23. Find the Paasche’s Index number for prices from the following
Commodity Base year Current year
Price Commodity Price Commodity
A 1 6 3 5
B 3 5 8 5
C 4 8 10 6
(a) 260.36 (b) 265.48 (c) 274.32 (d) 282
24. Index numbers are not helpful in
(a) Framining Economic Policies (b) Revealing Trend
(c) Forecasting (d) Identifying errors
25. The weight average of price relatives of commodities when the weight is equal to the value of
commodities in base year yields _____index number
(a) Fisher’s Ideal (b) Laspyres
(c) Paasches (d) Marshall-Edgeworth

MTP-Oct’21
26. _________________ satisfies circular test
(a) G.M. of price relatives or the weighted aggregate with fixed weights
(b) A.M. of price relatives or the weighted aggregate with fixed weights
(c) H.M. of price relatives or the weighted aggregate with fixed weights
(d) none
27. From the following data for the 5 groups combined
Group Weight Index Number
Food 35 425
Cloth 15 235
Power & Fuel 20 215
Rent & Rates 8 115
Miscellaneous 22 150
The general Index number is
(a) 270 (b) 269.2 (c) 268.5 (d) 272.5
28. Laspyres formula does not satisfy
(a) Factor Reversal Test (b) Time Reversal Test
(c) Circular Test (d) All the above
29. If  P0Q0 = 1360,  PnQ0 = 1900,  PnQn = 1880 then the Laspeyre’s Index number is
(a) 71 (b) 139.71 (c) 175 (d) None of these.
30. The consumer price Index for April 1985 was 125. The food price index was 120 and other items index
was 135. The percentage of the total weight of the index is
(a) 66.67 (b) 68.28 (c) 90.25 (d) None
31. Net monthly salary of an employee was ` 3000 in 1980. The consumer price index number in 1985 is 250
with 1980 as base year. If the has to be rightly compensated then, dearness allowances to be paid to the
employee is :
(a) ` 4.800 (b) ` 4,700 (c) ` 4,500 (d) None
MTP-Nov’21
32. If Laspyres index number is 250 and Paschees index number is 160, them Fishers Index number is
(a) 200 (b) 120 (c) 150 (d) 170
33. Which is called an ideal index number
(a) Laspyres Index number (b) Pasches Index number
(c) Fishers Index number (d) Marshall- Edgeworth Index number
34. Circular test is satisfied by
(a) Laspyres Index number (b) Paschhes index number
(c) The simple geometric mean of price relatives and weighted aggregative with fixed weights.
(d) None of these

35. If the price of a commodity in a place have decreased by 30% over the based period places, then the
index number of that place is
(a) 30 (b) 60 (c) 70 (d) 80
ANSWER KEYS
1. (c) 2. (c) 3. (c) 4. (c)
5. (b) 6. (a) 7. (c) 8. (a)
9. (b) 10. (a) 11. (d) 12. (d)
13. (a) 14. (a) 15. (a)
16. (d) 17. (d) 18. (b) 19. (d)
20. (c) 21. (d) 22. (b) 23. (a)
24. (d) 25. (b) 26. (a) 27. (b)
28. (d) 29. (b) 30. (a) 31. (c)
32. (a) 33. (c) 34. (c) 35. (c)


NOTES

PAPER-4: PART-I: BUSINESS ECONOMICS
Chapter-1
Nature & Scope of Business Economics
MTP-May’20
1. Which of the following statements is correct?
(a) The Law of Demand states positive relationship between price and quantity demanded.
(b) The Law of Supply states positive relationship between price and quantity supplied.
(c) As per the Law of diminishing returns as the consumption of any commodity is increased, the
average returns start diminishing.
(d) None of the above
2. The branch of economic theory that deals with the problem of allocation of resources is
(a) Micro-Economic theory (b) Macro-economic theory
(c) Econometrics (d) none of the above
3. Choice is created by the-
(a) Abundance of resources (b) Scarcity of resources
(c) Urgency of needs (d) Non-Availability of resources
4. Which of the following statements would you consider to be a normative one?
(a) Faster economic growth should result if an economy has a higher level of investment.
(b) Changing the level of interest rates is a better way of managing the economy than using taxation
and government expenditure.
(c) Higher levels of unemployment will lead to higher levels of inflation.
(d) The average level of growth in the economy was faster in the 1990s than the 1980s.
5. Which of the following is not within the scope of Business Economics?
(a) Capital Budgeting (b) Risk Analysis
(c) Business Cycles (d) Accounting Standards
6. A study of how increases in the corporate income tax rate will affect the national unemployment rate
is an example of
(a) Macro-Economics (b) Descriptive Economics
(c) Micro-economics (d) Normative economics
7. The difference between Positive and Normative Economics is:
(a) Positive Economics explains the performance of the economy while Normative Economics finds
out the reasons for poor performance.
(b) Positive Economics describes the facts of the economy while Normative Economics involves
evaluating whether some of these are good or bad for the welfare of the people.
(c) Normative Economics describes the facts of the economy while Positive Economics involves
evaluating whether some of these are good or bad for the welfare of the people.
(d) Positive Economics prescribes while Normative Economics describes.
Navkar Institute | CA Foundation |Paper 4 Part-I : Business Economics : Compiler 95

8. Capital intensive techniques would get chosen in a
(a) Labour surplus economy where the relative price of capital is lower.
(b) Capital surplus economy where the relative price of capital is lower.
(c) Developed economy where technology is better.
(d) Developing economy where technology is poor.
9. Exploitation and inequality are minimal under:
(a) Socialism (b) Capitalism
(c) Mixed economy (d) None of the above
10. Which of the following involve a trade-off?
(a) Taking a nap (b) all of these answers involve trade-offs.
(c) Watching a football game on Saturday afternoon
(d) Going to university
MTP-Oct’19
11. The implication that resource scarcity have for the satisfaction of wants are-
(a) Not all wants can be satisfied
(b) We will never be faced with the need to make choices
(c) We must develop ways to decrease our individual wants
(d) The discovery of new natural resources is necessary to increase our ability to satisfy wants
12. A normative economic statement is-
(a) Unemployment rate decreases with industrialization
(b) Economics is a social science that studies human behaviour
(c) The minimum wage should be raised to ` 200/- per day
(d) India spends a huge amount of money on national defence
13. Administered prices refer to-
(a) Price determined by forces of demand and supply
(b) Price determined by sellers in the market
(c) Prices determined by an external authority which is usually the government
14. Which of the following is a cause of an economic problem?
(a) Scarcity of Resources (b) Unlimited wants
(c) Alternative uses (d) All of the above
15. Economic goods are goods which:
(a) Cannot be increased in quantity (b) Obey the law of Micro Economics
(c) Are limited in supply and are scarce (d) Are limited to man-made goods.
16. Which of the following means an Economic activity?
(a) Production of Goods (b) Production of Services
(c) Consumption of Goods and Services (d) All of the above
17. Which economy is now a myth only, as no country in the world is having that type of economy?
(a) Capitalist Economy (b) Socialist Economy
(c) Mixed Economy (d) None of the above
96 Chapter 1 : Nature & Scope of Business Economics

18. Lesser production of ________ would lead to lesser production in future
(a) Public goods (b) Consumer goods (c) Agricultural goods (d) Capital goods
MTP-April’19
19. In Economics, the central economic problem means:
(a) Output is restricted to the limited availability of resources
(b) Consumers do not have as much money as they would wish
(c) There will always be certain level of unemployment
(d) Resources are not always allocated in an optimum way
20. The law of scarcity
(a) Does not apply to rich, developed countries
(b) Does not apply to poor, under developed countries
(c) Implies only to socialist economies.
(d) Implies that all consumer wants will never be completely satisfied.
21. Questions like what should be the level of national income, what should be the wage rate fall within
the scope of:
(a) Positive Science (b) Normative Science (c) Both (a) and (b) (d) None
22. Which of the following is not one of the features of capitalist economy?
(a) Right of private property (b) Freedom of choice by the consumers
(c) No profit, No Loss motive (d) Competition
23. We mainly study the following in Micro Economics:
(a) Location of a Industry (b) Study of firms (c) Factor pricing (d) All
(a) As normative science, Economics involves value judgments
(b) Robbins has made econom ics as a form of welfare economics
(c) The Law of Demand is always true (d) None of the above
25. When we are studying how a producer fixes the price of his products we are studying
(a) Macro Economics (b) Micro Economics
(c) Both Micro and Marco Economics (d) None of the above
26. Macro economics doesn’t include one example from the following:
(a) National Income and output (b) Study of firms
(c) General Price Level (d) Saving and Investment
MTP-April ’21
27. An Applied Economics that fills the gap between economic theory and business practice:
(a) Business Economics (b) Macro Economics
(c) Welfare Economics (d) None of these
28. Administered price are determined in socialism by:
(a) Market Forces (b) Government
(c) Both (a) and (b) (d) None of these
29. Which of the following is a normative statement?
(a) Health care basic facilities to be provided to all citizens.
(b) With Industrialisation, unemployment rate decreases.
(c) On national defence India spent huge amount of money.
(d) None of these
30. Which of the following is not a demerit of Capitalism?
(a) The pattern of demand does not represent the real need of the society.
(b) Strikes and lockdown are very common under capitalism
(c) Capitalism usually functions in a democratic framework.
(d) None of these
31. Socialist economy does have:
(a) Right to work and minimum standard to living
(b) Absence of competition
(c) Right to private property
(d) Both a and b
32. Scarcity of resources of occurs due to:
(a) High demand of resources (b) Absence of Substitutes
(c) Mismanagement and inequality (d) All of these
MTP-March ‘21
33. The Book “The Wealth of Nations “is written by:
(a) Adam Smith (b) Arthur Pigou
(c) Robinson (d) Ragnar Nurske
34. The Nature of Business Economics:
(a) Business Economics is a Science
(b) Incorporate elements of Macro Analysis
(c) Interdisciplinary in Nature
(d) All the above
35. Which of these country is a purely socialist economy?
(a) USSR (b) China (c) Vietnam (d) None of these
36. Rational decision making requires that:
(a) one’s choice be arrived at logically and without error.
(b) one’s choice be consistent with one’s goal.
(c) one’s choice never vary.
(d) the consumer plan’s to attain the highest possible level of satisfaction.
37. The opportunity cost of a good is :
(a) loss of interest in using savings
(b) time lost in finding it.
(c) quality of other goods sacrificed to get another unit of that good.
(d) none of these
38. The problem what to produce relates to:
(a) choice of goods and services (b) distribution of Income
(c) choice of technique (d) market value of goods and services

MTP-March ‘22
39. Which of the following are the characteristics of Business Economics:
(a) It is a normative Science (b) It is inter disciplinary
(c) Pragmatic in Nature (d) All of the above
40. Which branch of economic theory deals with allocation of resources:
(a) Macro economic (b) Micro economic
(c) Economic Growth (d) None of these
41. Under which system Freedom of choice is an advantage:-
(a) Capitalism (b) Mixed economy
(c) Socialism (d) None
42. Taxation involves which aspects of normative economics:
(a) Incidence (b) Fairness
(c) Incentive to work (d) All of the above
43. A theory is :
(a) An assumption (b) A hypothesis
(c) A validated hypothesis (d) None of these
(a) In a two-good economy, the production possibilities frontier reflects the maximum amount of
one good that can be produced when a given amount of the other good is produced.
(b) Microeconomics is the study of the behavior of the economy as a whole.
(c) Positive economics focuses on welfare of the people of a society
MTP-Nov’21
45. Which of the following is not a characteristics of capitalist economy:
(a) Right to Private Property (b) Freedom of Enterprise
(c) Consumer Sovereignty (d) Combined Sector
46. Which are the areas that come under Macro economics ________
(a) External Value of currency (b) The general price level and interest rate
(c) Location of the industry (d) National Income and National Output
47. Business Economics is a :
(a) Normative Science (b) Interdisciplinary
(c) Pragmatic (d) All of these
48. Scarcity of resource has to be dealt in:
(a) Capitalist Economy (b) Socialist Economy
(c) Mixed Economy (d) All of these
49. Large number of _____ goods would lead to higher production in future:
(a) Capital Goods (b) Public Goods
(c) Consumer Goods (d) None of these
50. Production is the organized activity of transforming resource into finished products in the form of
goods and services and the objective of production is to satisfy the demand of such transformed
resources:

(a) Jamed Bates and J.R Parteinson (b) Malthus
(c) Walras (d) Lipsey
51. Allocation of resources is dealt in:
(a) Macro Economic (b) Micro Economics
(c) Public Finance (d) None of these
52. How to Produce is related to:
(a) Product’s Choice (b) Choice of technique
(c) Either (a) or (b) (d) None of these
MTP-Oct ‘21
53. In mixed economy the feature include existence of
(a) Private Sector (b) Public Sector
(c) Combined Sector (d) All of these
54. Which of the following is demerit of Capitalism:
(a) There is precedence of property rights over human right
(b) It functions in a domestic framework
(c) High degree of operative efficiency
(d) None of these
55. Which of the following is included in study of Micro economics:
(a) Product Pricing (b) Factor Pricing
56. Scarcity definition is economics is given by
(a) Lipsey (b) Adam Smith
(c) J B Say (d) Robinson
57. Business Economics in its approach is
(a) Pragmatic (b) Idealistic
(c) Normative (d) None of these
58. The industratlization and economic development of the USA Great Britain and other Western European
Countries here taken place under the condition of _______
(a) Capitalism and Laissez Faire (b) Mixed Economic Structure
(c) Socialism and Planned Structure (d) None of these
59. In the beginning economics was named as
(a) Political Economy (b) Welfare Economics
(c) Economies of Wealth (d) None of these
60. A decrease in the demand for mobile phone other things remaining the same will _____
(a) Increase purchase the number of mobile phone bought
(b) Decrease the price but increase the number of mobile phone
(c) Decrease in quantity of mobile phone demanded
(d) Decrease the price and decrease in the number of Mobile Phone bought
61. Normative economics can be explained through :
(a) Fairness to tax (b) Incidence to tax
(c) Effect of tax on incentives to work (d) None of these

ANSWER KEYS
1 (b) 2 (a) 3 (b) 4 (b)
5 (d) 6 (a) 7 (b) 8 (b)
9 (a) 10 (b) 11 (a) 12 (c)
13 (c) 14 (d) 15 (c) 16 (d)
17 (b) 18 (d) 19 (a) 20 (d)
21 (b) 22 (c) 23 (d) 24 (a)
25 (b) 26 (b) 27 (a) 28 (b)
29 (a) 30 (c) 31 (d) 32 (d)
33 (a) 34 (d) 35 (d) 36 (d)
37 (c) 38 (a) 39 (d) 40 (b)
41 (a) 42 (b) 43 (c) 44 (a)
45 (d) 46 (c) 47 (d) 48 (d)
49 (a) 50 (a) 51 (b) 52 (b)
53 (d) 54 (a) 55 (c) 56 (d)
57 (a) 58 (a) 59 (a) 60 (c)
61 (a)


NOTES

Chapter-2
Theory of Demand and Supply
MTP-May’20
1. If the price of Orange Juice increases, the demand for Apple Juice will _____________.
(a) increase (b) decrease (c) remain the same (d) become negative.
2. If good growing conditions increases the supply of strawberries and hot weather increases the demand
for strawberries, the quantity of strawberries bought
(a) increases and the price might rise, fall or not change.
(b) does not change but the price rises.
(c) does not change but the price falls. (d) increases and the price rises.
3. If increasing air fares increases revenues and decreasing them decreases revenues, then the demand
for air travel has a price elasticity of:
(a) Zero (b) Greater than zero but less than one
(c) One (d) Greater than one
4. Suppose income of the residents of locality increases by 50% and the quantity of gel pens demanded
increases by 20%. What is income elasticity of demand for gel pen?
(a) 0.4 (b) 0.6 (c) 1.25 (d) 1.50
5. What will happen in the rice market if buyers are expecting higher rice prices in the near future?
(a) The demand for rice will increase. (b) The demand for rice will decrease.
(c) The demand for rice will be unaffected. (d) None of the above
6. Suppose potatoes have (-) 0.4 as income elasticity. We can say from the data given that:
(a) Potatoes are inferior goods. (b) Potatoes are superior goods.
(c) Potatoes are necessities.
(d) There is a need to increase the income of consumers so that they can purchase potatoes.
7. The cross elasticity between Rye bread and Whole Wheat bread is expected to be:
(a) positive (b) negative (c) zero (d) can’t say
8. In a very short period, the supply
(a) can be changed. (b) cannot be changed.
(c) can be increased. (d) none of the above
9. Suppose the income elasticity of education in private school in India is 1.8. What does this indicate:
(a) Private school education is a luxury.
(b) Private school education is a necessity.
(c) Private school education is an inferior commodity.
(d) We should have more private schools.

10. Refer the above table and find the value of x.
(a) -20 (b) -0.05 (c) -1 (d) Can not be determined
11. Refer the above table and find the value of y.
(a) -5 (b) 15 (c) -45 (d) -3
12. Refer the above and find the value of z.
(a) 14 (b) 1 (c) 0.07 (d) 5
13. If the quantity of blankets demanded increases from 4600 to 5700 in response to a decrease in their
price from Rs. 220 to Rs. 190, the price elasticity of demand for blankets is
(a) 0.69 (b) 1.0 (c) 1.46 (d) 2.66
14. Suppose that at a price of Rs. 300 per month, there are 30,000 subscribers to cable television in Small
Town. If Small Town Cablevision raises its price to Rs. 400 per month, the number of subscribers will fall
to 20,000. Using the arc elasticity (midpoint) method for calculating the elasticity, what is the price
elasticity of demand for cable TV in Small Town?
(a) 1.4 (b) 0.66 (c) 0.75 (d) 2.0
MTP-Oct’19
15. A downward movement along a demand curve indicate-
(a) Increase in demand (b) Decrease in demand
(c) Contraction of demand (d) Expansion of Demand
16. If price of automobiles increases by 10% and supply increases by 25%. The elasticity of supply is-
(a) 2.5 (b) 0.4 (c) -2.5 (d) -0.4
17. The consumer is in equilibrium at a point where the budget line-
(a) Is above an indifference curve (b) Is below an indifference curve
(c) Is tangent to an indifference curve (d) Cuts an indifference curve
18. The second glass of water gives lesser satisfaction to a thirsty boy. This is a clear case of-
(a) Law of demand. (b) Law of diminishing returns.
(c) Law of diminishing utility. (d) Law of supply.
19. When the price of commodity increases by 40% and its quantity demanded falls from 150 to 120 units ,
then the price elasticity of demand for a commodity is-
(a) -0.8% (b) 0.8% (c) 0.5% (d) -0.5%
20. If the consumer consumes only one commodity X , he will be in equilibrium when-
(a) MUx > Px (b) MUx< Px (c) MUx= Px (d) None of these
21. Identify the coefficient of price-elasticity of demand when the percentage increase in the quantity of
a good demanded is smaller than the percentage fall in its price-
(a) Equal to one (b) Greater than one (c) Smaller than one (d) Zero
22. If a good is a luxury, its income elasticity of demand is-
(a) positive and less than 1 (b) negative but greater than -1
(c) positive and greater than 1 (d) Zero
23. A consumer demands 5 units of a commodity at the price of Rs. 4 per unit. He demands 10 units when
the price falls to Rs 3 per unit. Price elasticity of demand is equal to-
(a) 3 (b) 2 (c) 1.5 (d) 4
104 Chapter 2 : Theory of Demand and Supply

24. Availability of close substitutes makes the demand-
(a) Less elastic (b) More elastic (c) Parallel to X axis (d) Parallel to Y axis
25. The supply curve for perishable commodities is-
(a) elastic (b) inelastic (c) perfectly elastic (d) perfectly inelastic
26. The slope of consumer’s budget line is –
(a) Positive and constant (b) Negative and decreasing
(c) Negative and constant (d) Positive and increasing
27. Demand for water is –
(a) Elastic (b) Inelastic
(c) Perfectly elastic (d) Relatively elastic
28. Inferior goods are those goods whose income effect is-
(a) Negative (b) Positive (c) Zero (d) None of these
29. Suppose income elasticity of bread is 0.25, its means that bread is-
(a) Inferior goods (b) Luxury goods (c) Normal goods (d) Can’t say
30. The supply curve shifts to the right because of-
(a) Improved technology (b) Increased price of factors of production
(c) Increased excise duty (d) All of the above
31. If the demand is more than supply, then the pressure on price will be-
(a) Upward (b) Downward (c) Constant (d) None
32. Which of the following goods has inelastic demand-
(a) Salt (b) Food grains (c) Medicines (d) All
33. Demand for pepsi is elastic because-
(a) Its falls under luxuries (b) Its consumption can be postponed
(c) Its substitutes are available in the market (d) It is a multiple use product
34. A good which cannot be consumed more than once is known as-
(a) durable good (b) non-durable good
(c) producer good (d) none of the above
35. A consumer of two goods X and Y is in equilibrium. The price of good X is Rs. 10 and price of the good Y
is Rs. 20 respectively. If the MUX is 60 utils , then the MUy is-
(a) 30 utils (b) 20 utils (c) 60 utils (d) 6 utils
36. The slope of indifference curve is given by-
(a) Budget line (b) Marginal rate of transformation
(c) Marginal rate of substitution (d) None of these
MTP-March’19
37. In the case of a straight line demand curve meeting the two axes, the price elasticity of demand at y-
axis of the line would be equal to
(a) 1 (b) infinity (c) 3 (d) 1.25
38. When the consumer is in equilibrium his price line is ______ to indifference curve
(a) Parallel (b) At right angle (c) Diagonally opposite (d) Tangent

39. Indifference Curve analysis is based on
(a) Ordinal utility (b) Cardinal utility (c) Marginal utility (d) None
40. When two goods are perfect substitutes of each other then
(a) MRS is falling (b) MRS is rising (c) MRS is constant (d) None
41. In case of a Giffen good, the demand curve will be:
(a) Horizontal (b) Downward – sloping to the right
(c) Vertical (d) Upward – sloping
42. Calculate Income-elasticity for the household when the income of a household rises by 10% the demand
for T.V. rises by 20%
(a) + .5 (b) -.5 (c) + 2 (d) -2
43. In case of necessaries the marginal utilities of the earlier units are large. In such cases the consumer
surplus will be:
(a) nfinite (b) Zero (c) Marginally positive
(d) Marginally Negative
44. Calculate Income-elasticity for the household when the income of a household rises by 5% and the
demand for bajra falls by 2%
(a) + 2.5 (b) – 2.5 (c) -.4 (d) +.4
45. The consumer surplus concept is derived from:
(a) Law of demand (b) Indifference curve analysis
(c) Law of diminishing marginal utility (d) All of above
46. ___________ depicts complete picture of consumer tastes and preferences.
(a) Budget line (b) Average cost curve
(c) Indifference map (d) Marginal revenue curve
47. When economists speak of utility of a certain good, they are referring to:
(a) the demand for the good
(b) The usefulness of the good in consumption
(c) the expected satisfaction derived from the consumption of good.
(d) The rate at which consumers are willing to exchange one good for another
48. If the goods are perfect substitutes for each other then cross elasticity is
(a) Infinite (b) One (c) Zero (d) None
49. Consumer Surplus is:
(a) What a consumer is ready to pay + what he actually pays
(b) What a consumer is ready to pay – what he actually pays
(c) What he actually pays – what a consumer is ready to pay
50. Effective Demand depends on:
(a) Desire (b) Means to purchase
(c) Willingness to use those means (d) All of the above
51. Quantity demanded is a:
(a) Flow Concept (b) Stock Concept
(c) Both (a) and (b) (d) None of the above
52. If two goods are complementary, like pen and ink, then the cross elasticity is:
(a) Positive (b) Zero (c) Negative (d) Less than one

53. If the price of Banana rises from Rs. 30 per dozen to Rs. 40 per dozen and the supply increases from 240
dozen to 300 dozens elasticity of supply is:
(a) .7 (b) -.67 (c) .65 (d) .77
54. If a good is priced at Rs. 180 p.u. and its price is increased to Rs. 240 p.u. Now suppose quantity demanded
previously was 100 units and as a result of price increase, the quantity demanded fell to 80 units. What
is the price elasticity?
(a) . 777 (b) 1.4 (c) 1 (d) .8
55. A horizontal supply curve parallel to the quantity axis implies that the elasticity of supply is:
(a) Infinite (b) Zero (c) Equal to one
(d) Greater than zero but less than one
MTP-April’19
56. If the price of petrol rises by 25% and demand for car falls by 40% then, cross elasticity between petrol
and car is:
(a) -1.6 (b) 1.6 (c) -2.6 (d) 2.6
57. Supply of a good and its price have
(a) Negative relationship (b) Inverse relationship
(c) No relationship (d) Positive relationship
58. An expansion in the supply of a good is caused by a:
(a) Rise in the price of good
(b) Fall in the prices of other goods
(c) Fall in the prices of factors of production
(d) All of the above
59. Which of the following has the lowest price elasticity of supply?
(a) Luxury (b) Necessities (c) Salt (d) Perishable goods
60. Which is not the assumption of Indifference curve Analysis?
(a) The consumer is rational and possesses full information about all the asp ects of economic
environment
(b) The consumer is not capable of ranking all combinations
(c) If consumer prefers combination A to B, and B to C, then he must prefer combination A to C
(d) If combination A has more commodities than combination B, then A must be preferred to B.
61. The horizontal demand curve parallel to x-axis implies that the elasticity of demand is
(a) Zero (b) Infinite (c) Equal to one
(d) Greater than zero but less than infinity
62. The consumer is in equilibrium when:
(a) When marginal utility is constant
(b) When marginal utility is greater than price of the good
(c) When marginal utility is less than price of the good
(d) When marginal utility is equal to price of the good

63. A higher indifference curve shows:
(a) A higher level of satisfaction (b) A higher level of production
(c) A higher level of income (d) None of the above
64. In case of an inferior good the income elasticity of demand is:
(a) Zero (b) Positive (c) Negative (d) None
65. When quantity demanded changes by larger percentage than does price, elasticity is termed as:
(a) Inelastic (b) Elastic (c) Perfectly Elastic (d) Perfectly Inelastic
66. Indifference curve is convex to the origin due to:
(a) Falling MRS (b) Rising MRS
(c) Constant MRS (d) None of the above
67. If the proportion of income spent on a goods decrease as income rises then income elasticity is:
(a) Greater than one (b) Less than one (c) One (d) Zero
68. If two goods are totally unrelated, then cross elasticity between them is:
(a) Zero (b) One (c) Infinite (d) None
69. Normal goods have:
(a) Positive income elasticity (b) Negative income elasticity
(c) Fluctuating income elasticity (d) Zero income elasticity
70. Cardinal Measurability of utility means:
(a) Utility can be measured (b) Utility cannot be measured
(c) Utility can be ranked (d) Utility can be measured in some case
71. Which of the following statement is false?
(a) An indifference curve is concave to the origin
(b) An indifference curve is convex to the origin
(c) A higher indifference curve is better than a lower indifferent curve
(d) An indifference curve is a curve which represents all those combinations of two goods which give
same satisfaction to the consumer.
72. Identify the factor which generally keeps the price -elasticity of a demand for a good high.
(a) Its very high price (b) Its very low price
(c) Large number of substitutes (d) None of the above
MTP-April ’21
73. Exception to the law of demand
(a) Speculative effect (b) Fear of Shortage
(c) Ignorance (d) All the above
74. In case of inferior goods:
(a) Income effect and substitution effect work in opposite direction
(b) Income effect and substitution effect work in same direction
(c) It leads consumer to purchase less of a good and more of the substitute
(d) None of these

75. If MUx = 30, Px = 5 MUy = 40 the value of Py will be
76. When the demand curve is parallel to Y axis the elasticity of demand will be _____
(a) Zero (b) Utility (c) Less than Unity (d) None of these
77. A rise in sale of which type of good is expected in the case of recession:
(a) Luxury (b) Necessity (c) Interior (d) Normal
78. If price of both goods fall how would the budget line is affected?
(a) The budget line will shift to left. (b) The budget line will shift to right
(c) The budget line will not change
(d) The new budget line will have the same slope as the original so long as the price of both goods
change in the same proposition.
79. When price of a good rises from Rs. 20 to Rs. 30 the producer supplier 20 percent more the Price
elasticity of supply is
(a) 0.5 (b) 0.4 (c) 1 (d) None of these
80. From the following demand curve determine the elasticity at the given price
Q = 1200 – 10P
When P = 5, dQ/dP = 10
(a) Elastic (b) Inelastic (c) Unitary elastic (d) None of these
81. The Delphi process is a technique of:
(a) Budget Analysis (b) Demand forecasting
(c) Cost Analysis (d) None of these
82. If the Price of Thumps Up increase the demand curve of Pepsi will:
(a) Remain at the same level (b) Shift towards right
(c) Shift towards left (d) None of those
83. Consumer surplus means:
(a) Area between the average revenue and marginal revenue curve.
(b) Area inside the budget line above the price of the commodity.
(c) Difference between the market price and the surplus curve.
(d) Difference between the maximum amount a person is willing to pay for a good and its maximum
price
84. What will be the shape of indifference curve in case of two perfect substitutes:
(a) C Shaped (b) L Shaped (c) U Shaped (d) Straight line
85. Relative price of goods reflects their:
(a) Opportunity Cost (b) Fixed Cost
(c) Average Cost (d) None of these
MTP-March ’21
86. The substitution effect will be stronger when:
(a) the goods are closer substitute
(b) there is lower cost of switching to the substitute good.
(c) there is lower inconvenience while switching to the substitute good.
(d) all the above

87. A relative price is:
(a) price expressed in terms of money.
(b) the ratio of one money price to another
(c) equal to money price.
(d) none of these.
88. In case of substitute product:
(a) demand curve slope upwards. (b) demand curve slope downwards
(c) demand curve is perfectly elastic (d) none of these.
89. A dealer sells only two brands of Motorcycle- Royal and Hero. It was observed that when the price of
royal rises by 10% the demand for Hero increases by 15%. What is the cross elasticity of Hero against the
Price of Royal?
(a) + 1.5 (b) -1.5 (c) 2.5 (d) none of these
90. When e = 0, elasticity of demand is :
(a) perfectly elastic (b) unitary elastic
(c) inelastic (d) perfectly inelastic demand
91. A rise in price will –
(a) increase in consumer surplus (b) decrease in consumer surplus
(c) no change in consumer surplus (d) none of these
92. When a small change in price leads to a large change in demand the demand is
(a) inelastic (b) elastic (c) stagnant (d) fixed
93. The relationship between price and quantity supplied in law of supply is:
(a) proportionate (b) homogenous (c) inverse (d) direct
94. For luxuries goods the income elasticity is :
(a) e > 1 (b) e < 1 (c) e= 0 (d) none of these
95. When goods are complementary the indifference curve is :
(a) is a straight line (b) is convex to the origin
(c) consist of two straight line with a right angle bent.
(d) none of these
96. The Consumer is in equilibrium when:
(a) the budget line is tangent to the indifference curve
(b) marginal rate of substitution of one good for another must be equal to the price ratio of the two
goods
(c) either a or b
(d) none of these
97. Demand for factor of production is
(a) supplementary demand (b) intermediate goods
(c) derived demand (d) complementary demand
98. The cross elasticity between tea and coffee is :
(a) infinite (b) positive (c) zero (d) negative

99. When violation of law of demand occurs:
(a) substitution effect is negative (b) income effect is negative
(c) negative income effect is less than substitution effect
(d) negative income effect is greater than substitution effect
100. The producer reduces supply from 100 units to 50 units. When the price falls from Rs 20 to Rs 10, the
price elasticity of supply will be :
101. The marginal utility from last unit consumed of commodity Y = 50 Units and MUm = 10. The consumer is
in equilibrium and consuming commodity y only. Find the Price of Commodity Y—
MTP-March’22
102. Suppose we are drawing a supply curve of a farmer which of the following will be held constant. :
(a) Price of Inputs (b) Weather Conditions (c) Technology
(d) The price of the Commodity under consideration
103. A fall in the price of a commodity where everything else is held constant is referred to as:
(a) An increase in quantity demand (b) A decrease in demand
(c) An increase in demand (d) None of these
104. For Giffen good the Engel curve is:
(a) Positive sloped (b) Vertical
(c) horizontal (d) Negative sloped
105. The Coefficient of Price elasticity of demand between two points on a demand curve is _____
(a) Arc elasticity (b) Point elasticity
(c) Price elasticity (d) None of these
106. When the demand curve is a rectangular hyperbola an increase in the price of the commodity causes
the total expenditure of consumers of the commodity to:
(a) Remain unchanged (b) Increase
(c) Decrease (d) Any of the above
107. A movement along a curve rather than a shift in the curve can be measured by:-
(a) Cross elasticity of demand (b) Income elasticity of demand
(c) Price elasticity of demand & Price elasticity of Supply
(d) None of these
108. The Substitution effect will be stronger when-
(a) The goods are closer substitutes
(b) There is lower cost of switching to the substitute good
(c) There is lower inconvenience while switching to the substitute good.
(d) All of these
109. ‘Time’ element in market was conceived by :
(a) Alfred Marshall (b) Pigou
(c) Allen (d) None of these

110. Cross elasticity of demand for the monopolist’s product or any other product is _______
(a) Zero (b) Very small
(c) High (d) Either (a) or (b)
111. Supply Schedule in a purely competitive firm in the short run is determined by :
(a) Marginal revenue (b) Average revenue
(c) Marginal cost curve (d) None of these
112. Between two perfect substitute the elasticity of Substitution is ______
(a) < Zero (b) >Zero
(c) < Infinity (d) Infinity
113. “Supply creates its own demand” statement is given by ______
(a) Marshall (b) J B Say
(c) Ricardo (d) Kuznets
114. According to Hicks and Allen the demand curve slope downwards due to _____
(a) Law of diminishing marginal utility (b) Income effect and substitution effect
115. A rise in price of a good:
(a) Reduce Consumer Surplus (b) Increase in Consumer Surplus
(c) It will not change (d) None of these
116. When two goods are perfect substitute for each other:
(a) Indifference curve for these two goods are straight parallel line with a constant slope along the
curve
(b) Indifference curve has a constant MRS
(c) Concave to the Origin (d) Both (a) and (b)
117. Behavior of Supply depends upon:
(a) Phenomenon Considered (b) Degree of possible adjustment in supply
(c) Time Period under Consideration (d) All the above
118. The price elasticity for demand for monopolist’s product is :
(a) <1 (b) >1
(c) =0 (d) None of these
119. What are the determinant of Price elasticity of demand:
(a) Time Period (b) Tied Demand
(c) Price range (d) All the above
120. Contraction of demand is the result of _______
(a) Increase in the price of other goods (b) Increase in the price of the good.
(c) Decrease in the income of purchases (d) None of these
121. If increasing railway fare increases revenue and decreasing then decrease revenue then the demand
for railway travel has a price elasticity of _____
(a) Greater than 1 (b) 1
(c) Greater than 0 but less than 1 (d) None of these
122. ‘No matter what the price of coffee is, Ram always spend a total of exactly 100 per week on coffee.’ The
statement implies that;

(a) Ram is very fond coffee and therefore he has an inelastic demand for coffee
(b) Ram has elastic demand for coffee
(c) Ram’s demand for coffee is relatively less elastic
(d) Ram’s demand for coffee is unit elastic
123. After reaching the saturation point, consumption of additional units of the commodity cause:
(a) Total utility to fall and marginal utility to increase
(b) Total utility and marginal utility both to increase
(c) Total utility to full and marginal utility to become negative
(d) Total utility to become negative and marginal utility to fall
124. Demand for electricity is elastic because ______
(a) It is very expensive (b) It has a number of close substitutes
(c) It has alternative uses (d) None of the above
125. Elasticity of supply to the degree of responsiveness of supply of a good to changes in its;
(a) Demand (b) Price
(c) Cost of production (d) State of technology
MTP-Nov’21
126. In case of Interior goods:
(a) Income effect and substitution effect work in same direction.
(b) Income effect are substitution effect work in opposite direction
127. Rationale of the law of demand is:
(a) Price effect of a fall in price (b) Different uses
(c) Arrival of new consumers (d) All of these
128. The cross elasticity between two goods will be:
(a) Positive (b) Negative
129. Demand for complementary goods are:
(a) Derived Demand (b) Autonomous demand
(c) Aggregate Demand (d) None of these
130. Methods of demand forecasting are:
(a) Survey of Buyer’s intension (b) Collective opinion Method
131. A Vertical supply curve parallel to Y axis implies that the elasticity of supply is:
(a) Infinity (b) Equal to One
(c) Zero (d) Greater than one but less than Infinity
132. When total demand for a commodity whose price has fallen increases it is due to:
(a) Price effect (b) Income effect
(c) Substitution effect (d) Complementary effect
133. In the quality supplied is exactly equal to the relative change in price then the elasticity of supply is:
(a) Greater than one (b) Less than one
(c) One (d) None of these
134. The budget line is also known as:
(a) Production Possibility Curve (b) Consumption Possibility Curve
(c) Iso Utility Curve (d) None of these
135. If e < 1 the marginal reverse will be:
(a) Positive (b) Negative
(c) Zero (d) None of these
136. Indifference Curve analysis is superior to utility analysis:
(a) It dispenses with the assumption of measurability
(b) It segregates income effect and substitution effect
(c) It does not assume constancy of marginal utility of money
137. All Giffen goods are:
(a) Inferior goods (b) Non Inferior goods
(c) Normal Goods (d) None of these
138. For Substitute products the demand is:
(a) Downward sloping (b) Horizontal
(c) Upward Sloping (d) None of these
139. Delphi technique was developed by:
(a) Robinson (b) Olaf Helmer
(c) Amartya Sen (d) None of these
140. Indifference Curve analysis of demand is based on:
(a) Cardinal Utility approach (b) Marginal Utility approach
(c) Ordinal Utility approach (d) None of these
141. The slope of budget line is:
(a) Px/Py (b) Py/Px
(c) Px.Py (d) None of these
MTP-Oct’21
142. Snob effect is explained as ______
(a) It is a function of consumption of others (b) It is a function of price
143. Which of the following are the determinant of price elasticity of demand:
(a) Availability of substitutes (b) Time period
(c) Tied demand (d) All of these
144. If the cross elasticity is only- slightly below zero which of the following is correct?
(a) They are weak complements
(b) Negative and very high they are strong complements
(c) Both (a) and (b) (d) None
145. Indifference Curve Analysis was proposed by _________
(a) J. R Hicks and R.G.D Allen (b) Alfred Marshall
(c) Jeremy Bentham (d) None of these

146. The rate at which the consumer is prepared to exchange-good x and y is :
(a) Marginal rate of substitution (b) Elasticity of Substitution
(c) Diminishing Marginal Utility (d) None of these
147. Contraction of demand is the result of
(a) Decrease in the number of Consumers (b) Increase in the price of the good concerned
(c) Price of related products (d) None of these
148. If regardless of change in the price the quantity demanded of a good remains unchanged then the
demand curve for the good will be –
(a) Vertical (b) Horizontal
(c) Negatively sloped (d) None of these
149. If the price of a commodity raised by 12% and Ed is ( -) 0.63 the expenditure made on the commodity by
the consumer will _______
(a) Remain the same (b) Decrease
(c) Increase (d) Can’t say
150. During lockdown due to Covid19 a consumer finds the vegetable vendors selling vegetables in the
streets have raised the prices of vegetable than usual prices. She will buy _____vegetable than/as her
usual demand showing the demand of vegetable is ______
(a) Same; Elastic Demand (b) Same; Perfectly Inelastic Demand
(c) Less; Elastic Demand (d) More; Inelastic Demand
151. Supply and Stock are ________
(a) Different (b) Same thing
(c) Having no comparison (d) Both (a) and (c)
152. Price elasticity of demand under monopoly is _______
(a) Infinity (b) Equal to one
(c) Less than one (d) None of these
153. The law of demand is :
(a) Irreversible in nature (b) Reversible in nature
154. Will there be any change in price charged by the monopol istic if elasticity of demand – 2 :
(a) Yes (b) No
(c) Neutral (d) None of these
155. Demand for a commodity with negative income elasticity indicate that as income falls the amount of
the commodity purchased
(a) falls (b) rises
(c) remain unchanged (d) None of these
156. For Giffen good the angle Curve is :
(a) Vertical (b) Horizontal
(c) Negatively Sloped (d) Positively Sloped
157. Comforts lies between
(a) Luxuries and Inferior goods (b) Interior goods and necessaries
(c) Necessaries and Luxuries (d) None of these

ANSWER KEYS
1 (a) 2 (a) 3 (b) 4 (a)
5 (a) 6 (b) 7 (a) 8 (b)
9 (a) 10 (b) 11 (c) 12 (a)
13 (c) 14 (a) 15 (d) 16 (a)
17 (c) 18 (c) 19 (d) 20 (c)
21 (c) 22 (c) 23 (d) 24 (b)
25 (d) 26 (c) 27 (b) 28 (a)
29 (c) 30 (a) 31 (a) 32 (d)
33 (c) 34 (b) 35 (a) 36 (c)
37 (b) 38 (d) 39 (a) 40 (c)
41 (d) 42 (c) 43 (a) 44 (c)
45 (c) 46 (c) 47 (c) 48 (a)
49 (b) 50 (d) 51 (a) 52 (c)
53 (d) 54 (a) 55 (a) 56 (a)
57 (d) 58 (a) 59 (d) 60 (b)
61 (b) 62 (d) 63 (a) 64 (c)
65 (b) 66 (a) 67 (b) 68 (a)
69 (a) 70 (a) 71 (a) 72 (c)
73 (d) 74 (a) 75 (a) 76 (a)
77 (c) 78 (d) 79 (b) 80 (b)
81 (b) 82 (b) 83 (d) 84 (d)
85 (a) 86 (d) 87 (b) 88 (a)
89 (a) 90 (d) 91 (b) 92 (b)
93 (a) 94 (a) 95 (c) 96 (c)
97 (c) 98 (b) 99 (d) 100 (a)
101 (a) 102 (d) 103 (a) 104 (d)
105 (a) 106 (a) 107 (c) 108 (d)
109 (a) 110 (d) 111 (c) 112 (d)
113 (b) 114 (b) 115 (a) 116 (d)
117 (d) 118 (a) 119 (b) 120 (b)
121 (c) 122 (d) 123 (c) 124 (c)
125 (b) 126 (b) 127 (d) 128 (b)
129 (a) 130 (c) 131 (c) 132 (a)
133 (c) 134 (b) 135 (b) 136 (d)
137 (a) 138 (c) 139 (b) 140 (c)
141 (a) 142 (a) 143 (d) 144 (a)
145 (a) 146 (a) 147 (b) 148 (a)
149 (c) 150 (b) 151 (a) 152 (c)
153 (a) 154 (a) 155 (b) 156 (c)
157 (c)

Chapter-3
Theory of Production and Cost
MTP-May’20
1. Marginal product, mathematically, is the slope of the

(a) total product curve. (b) average product curve.
(c) marginal product curve. (d) implicit product curve.
2. Suppose that a sole proprietorship is earning total revenues of Rs. 1, 00,000 and is incurring explicit
costs of Rs. 75,000. If the owner could work for another company for Rs. 30,000 a year, we would
conclude that :
(a) The firm is incurring an economic loss.
(b) Implicit costs are Rs. 25,000.
(c) The total economic costs are Rs. 1,00,000.
(d) The individual is earning an economic profit of Rs. 25,000.
3. “I am making a loss, but with the rent I have to pay, I can’t afford to shut down at this point of time.” If
this entrepreneur is attempting to maximize profits or minimize losses, his behavior in the short run is:
(a) Rational, if the firm is covering its variable cost
(b) Rational, if the firm is covering its fixed cost
(c) Irrational, since plant closing is necessary to eliminate losses
(d) Irrational, since fixed costs are eliminated if a firm shuts down
4. Economic costs of production differ from accounting costs of production because
(a) Economic costs include expenditures for hired resources while accounting costs do not.
(b) Accounting costs include opportunity costs which are deducted later to find paid out costs.
(c) Accounting costs include expenditures for hired resources while economic costs do not.
(d) Economic costs add the opportunity cost of a firm which uses its own resources.
(a) Fixed costs vary with change in output.
(b) If we add total variable cost and total fixed cost we get the average cost.
(c) Marginal cost is the result of total cost divided by number of units produced.
(d) Total cost is obtained by adding up the fixed cost and total variable cost.
6. If there are implicit costs of production:
(a) economic profit will be equal to accounting profit.
(b) economic profit will be less than accounting profit.
(c) economic profits will be zero.
(d) economic profit will be more than accounting profit.

7. The most important function of an entrepreneur is to ____________.
(a) Innovate (b) Bear the sense of responsibility
(c) Finance (d) Earn profit
8. If as a result of 50 per cent increase in all inputs, the output rises by 75 per cent, this is a case of:
(a) increasing returns of a factor (b) increasing returns to scale
(c) constant returns to a factor (d) constant returns to scale
9. In the long run, if a very small factory were to expand its scale of operations, it is likely that it would
initially experience
(a) an increase in pollution level. (b) diseconomies of scale.
(c) economies of scale. (d) constant returns to scale.
10. Which of the following statements is incorrect?
(a) The LAC curve is also called the planning curve of a firm.
(b) Total revenue = price per unit × number of units sold.
(c) Opportunity cost is also called alternative cost.
(d) If total revenue is divided by the number of units sold we get marginal revenue
11. Which of the following is a variable cost in the short run?
(a) rent of the factory. (b) wages paid to the factory labour.
(c) interest payments on borrowed financial capital.
(d) payment on the lease for factory equipment.
12. Diminishing marginal returns imply
(a) decreasing average variable costs (b) decreasing marginal costs
(c) increasing marginal costs (d) decreasing average fixed costs
MTP-Oct’19
13. In the third phase of Law of variable proportions, MP becomes-
(a) Zero (b) Negative (c) Positive (d) None
14. Law of variable proportion is related to-
(a) Short-run (b) Long-run (c) Both a and b (d) Very short run
15. When Marginal product is zero, then Total product is –
(a) Zero (b) Falling (c) Rising (d) Maximum
16. Long run production function related to-
(a) Returns to a factor (b) Returns to scale
(c) Both a and b (d) None of these
17. Diminishing returns occur-
(a) When units of a variable input are added to a fixed input and total product falls
(b) When units of a variable input are added to a fixed input and marginal product falls
(c) When the size of the plant is increased in the long run.
(d) When the quantity of the fixed input is increased and returns to the variable input falls.
118 Chapter 3 : Theory of Production and Cost

18. In the production of wheat, all of the following are variable factors that are used by the farmer except-
(a) The seed and fertilizer used when the crop is planted
(b) The field that has been cleared of trees and in which the crop is planted
(c) The tractor used by the farmer in planting and cultivating not only wheat but also corn and barley
(d) The number of hours that the farmer spends in cultivating the wheat fields
19. Economic costs includes-
(a) Accounting costs (b) Implicit costs (c) Both a and b (d) None
20. Which of the following cost curve is termed as a rectangular hyperbola-
(a) TVC curve (b) AVC Curve (c) TFC curve (d) AFC curve
21. The total cost of producing 30 units of output is Rs. 300. If average fixed cost at this level of output is Rs.
7, then the total variable cost will be –
(a) Rs. 160 (b) Rs. 140 (c) Rs. 90 (d) Rs. 120
22. Total costs is the vertical summation of –
(a) TFC and TVC (b) AFC and AVC (c) TVC and AVC (d) None
23. Example of Fixed cost is-
(a) Electricity bill (b) Interest on loans
(c) Expenses on raw material (d) Wages of daily workers
24. TVC can be calculate as-
(a) AVC/Q (b) TC-TFC (c) AC-AFC (d) None of these
25. The long run average cost curve is also called –
(a) Envelope curve (b) Plant curve
(c) Both a and b (d) None of these
26. Economies of scale exist because as a firm increases its size in the long run-
(a) Labour and management can specialize in their activities more
(b) As a larger input buyer, the firm can get finance at lower cost and purchase inputs at a lower per
unit cost.
(c) The firm can afford to employ more sophisticated technology in production
(d) All of these
27. Example of variable cost is –
(a) Salary of permanent staff (b) Rent of premises
(c) License fees (d) Wages
MTP-March’19
28. The Law of variable proportions examines the Production function with:
(a) One factor variable and only one factor fixed
(b) One factor variable keeping quantities of other factors fixed
(c) All factors variable (d) None of the above
29. MC curve cuts AVC Curve
(a) At its falling point (b) At its minimum Point
(c) At its rising point (d) At different points

30. Accounting profit is equal to:
(a) Total Revenue – Total variable cost (b) Total Revenue – Total direct cost
(c) Total Revenue – Total Cost
(d) Total Revenue – Total Explicit cost and Total Implicit Cost.
31. Which of the following statements is incorrect?
(a) The services of doctors, lawyers, teachers etc. are termed as production
(b) Man cannot create matter
(c) Accumulation of capital does not depend solely on income
32. Which of the following is not the characteristic of Labour?
(a) Labour is highly ‘Perishable’ in the sense that a day’s labour lost cannot be completely recovered
(b) Labour is inseparable from the labourer himself
(c) Labour has a strong bargaining power
(d) The supply of labour and wage rate are directly related in the initial stages
33. Indicate which of the following is a variable cost?
(a) Payment of rent on building (b) Cost of Machinery
(c) Interest payment on Loan taken from bank
(d) Cost of raw material
34. Marginal costs are closely associated with:
(a) Variable cost (b) Total fixed cost
(c) Average cost (d) Total cost
35. Economic cost means
(a) Accounting cost + Implicit cost (b) Accounting cost + Marginal cost
(c) Cash cost + Opportunity cost (d) Implicit cost
36. When is average product at its maximum point?
(a) When AP intersects MP (b) When AP intersects TP
(c) When MP is highest (d) At the point of inflexion
37. A firm has producing 7 units of output has an average total cost of Rs. 150 and has to pay Rs. 350 to its
fixed factors of production whether it produces or not. How much of the average total cost is made up
of variable cost?
(a) 200 (b) 50 (c) 300 (d) 100
38. The cost that firm incurs in hiring or purchasing any factor of production is referred as:
(a) Explicit cost (b) Implicit cost (c) Variable cost (d) Fixed cost
39. Diminishing marginal returns imply:
(a) Decreasing average variable cost (b) Decreasing marginal cost
(c) Increasing marginal cost (d) Decreasing average fixed cost
40. If decreasing returns to scale are present, then if all inputs are increased by 10% then:
(a) Output will increase by less than 10%
(b) Output will increase by 10%
(c) Output will decrease by 10%
(d) Output will increase by more than 10%
41. If as a result of 90 percent increase in all inputs, the output increase by 75 percent this is a case of
(a) Increasing return of a factor (b) Decreasing return to a factor
(c) Diminishing return to scale (d) None of the above
42. At shut down point:
(a) Price is equal to AVC (b) Total revenue is equal to TVC
(c) Total loss of the firm is equal to TFC (d) All of the above
43. All of the following are U-shaped curves except the:
(a) AVC curve (b) AFC curve (c) AC curve (d) MC curve
MTP-April’19
44. In Law of negative returns (T hird stage of Law of variable proportions)
(a) Total Product declines, MP is positive (b) Total Product declines, MP is Zero
(c) Total Product declines, MP is negative (d) Total Product in constant, MP is constant
45. If firm’s average cost curve is falling then marginal curve must be:
(a) Falling (b) Rising
(c) Below average cost curve (d) None
46. When is T P maximum
(a) When AP becomes Zero (b) When MP becomes Zero
(c) At the intersecting point of AP and MP (d) When MP is highest
47. Variable cost includes the cost of
(a) Buying land and building (b) Hire charges of machinery
(c) Insurance premium (d) Material bought
48. Which of the following is correct?
(a) Marginal cost is always less than the average cost.
(b) Marginal cost is always more than the average cost.
(c) Marginal cost is always equal to the average cost at its minimum point.
(d) Marginal cost is always equal to the average cost
49. When average cost curve is rising then, marginal cost
(a) Must be decreasing (b) Must be above the average cost curve
(c) Must be constant (d) Must be equal to average cost
50. A firm has variable cost of Rs. 1,000 at 5 units of outpu t. If fixed cost are Rs. 400, what will be the
average total cost at 5 units of output?
(a) 380 (b) 280 (c) 60 (d) 400
51. The vertical difference between T VC and T C is equal to:
(a) MC (b) AVC (c) TFC (d) None
52. Capital is a :
(a) Stock concept (b) Flow Concept (c) Both (a) and (b) (d) None
53. Marginal cost is defined as:
(a) The change in total cost due to a one unit change in output
(b) Total cost divided by output
(c) The change in output due to a one unit change in an input
(d) Total product divided by the quantity of input

54. Which of the following is not included in the stages of capital formation?
(a) Savings (b) Mobilisation of Income
(c) Mobilisation of saving (d) Investment
55. An economy achieves “productive efficiency” when:
(a) The best quality goods are produced
(b) The highly skillful resources in the country are fully employed
(c) All resources are utilized and goods and services are produced at least cost
56. Which of the following is considered production in Economics?
(a) Teaching CA students in CA Institute by a teacher
(b) Singing a song before friends
(c) Flying kite for pleasure
(d) Teaching to friends in a library any concept of Economics
57. The LAC curve
(a) Falls when the LMC curve falls
(b) Rises when the LMC curve rises
(c) Goes through the lowest point of the LMC curve
(d) Falls when LMC<LAC and rises when LMC>LAC
58. __________ is an implicit cost of production
(a) Wages of the labour (b) Charges for electricity
(c) Interest on owned money capital (d) Payment for raw material
59. If as a result of 80 percent increase in all inputs, the output increases by 25 percent, this is a case of:
(a) Increasing return to scale (b) Decreasing return to factor
(c) Decreasing returns to scale (d) Diminishing return to factor
60. When marginal product is negative, then total product is:
(a) Maximum (b) Decreasing (c) Constant (d) None
61. Suppose that an owner is earning total revenue of Rs. 1,00,000 and is increasing explicit cost of Rs.
60,000. If the owner could work for another company for Rs. 30,000 a year, we would conclude that:
(a) The firm is earning economic profit or Rs. 10,000
(b) The firm is earning accounting profit or Rs. 40,000
(c) The firm is earning economic profit of Rs. 40,000
(d) Both (a) and (b)
MTP-April ’21
62. The Shape of TC Curve of the monopolist is ____
(a) U Shape (b) S Shape (c) Inverse S Shape (d) None of these
63. Which of the following is a variable cost in the short run?
(a) Rent
(b) Wages
(c) Internal payments on borrowed financial capital
(d) None of these

64. Linear homogeneous function means:
(a) Input and output increases by same proportions.
(b) Input increases by some proportions and output increase more than proportionately
(c) Input increase by some proportion and output less than the proport ionately
(d) None of these
65. When output of a firm increases in the short run, its average fixed cost:
(a) Decreases (b) Increases
(c) Remain constant (d) First rises then decline
66. If a very small factory were to expand its scale of operations in the long run it is likely that it would
initially experience:
(a) Constant returns to scale (b) Diseconomies of scale
(c) Economies of scale (d) None of these
67. The firm’s Cost function is not a determinant of:
(a) The price of the labour (b) The price of the firm’s output
(c) Taxes (d) The production functions
68. Normal profit is part of :
(a) Implicit Costs (b) Average Cost
(c) Explicit Cost (d) None of these
69. Which of the Statement is correct: -
(a) Isoquant slopes downwards from left to right
(b) No two Isoquant can intersect each other
(c) Isoquants are convex to the origin
(d) All the above
70. Suppose production function is given by:
Q2 = 15 LK what type of return does is exhibit?
(a) Constant return (b) Increasing return
(c) Decreasing return (d) None of these
71. The slope of Isocost line is
(a) w/r (b) r/w (c) r x w (d) None of these
72. Relative price of goods reflects their:
(a) Opportunity Cost (b) Fixed Cost
(c) Average Cost (d) None of these
73. A mfg. company has TFC = 120 lakhs, TVC = 100 Q + 7Q2 + 0.25Q3
Calculate the MC?
(a) 100 + 1.4 Q + 0.75Q2 (b) 120+7Q2 + 0.25Q3
(c) 100 + 7Q2 + 0.25Q3 (d) None of these
74. Production function in short run is called:
(a) Production possibility frontier (b) Return to Scale
(c) Laws of variable (d) None of these

MTP-March ’21
75. Marginal Product is the slope of –
(a) marginal product curve (b) average product curve
(c) total product curve (d) implicit product curve
76. Law of Production does not include _
(a) least cost combination of factors (b) law of variable proportion
(c) law of diminishing returns to a factor
(d) return to scale
77. Which of the following statement is correct concerning the relationship among the firm’s cost function:
(a) TC = TVC-TFC (b) TFC = TC- TVC
(c) TC = TFC – TVC (d) TVC = TFC- TC
78. In the Cobb Douglas function the change in output due to increase in one additional unit of an input is
called?
(a) elasticity (b) return to scale
(c) total product (d) marginal revenue
79. The stages in law of variable proportion is :
(a) 1 (b) 2 (c) 3 (d) 4
80. Certain benefit an Industry gets when it expands its scale of production is known as:
(a) Internal economies (b) diseconomies
(c) external economies (d) profit
81. The Interest on own capital is:
(a) implict cost (b) future cost
(c) explicit cost (d) past cost
82. The shape of TR curve of the monopolist is :
(a) u shaped (b) inverted u shaped
(c) downward sloping (d) none of these.
83. Long run average cost (LAC) is :
(a) u shaped (b) is also called envelope curve
(c) both a and b (d) none of these
84. The producer’s demand for a factor of production is governed by the ___ of that factor.
(a) price (b) marginal productivity
(c) availability (d) profitability
85. The slope of isoquant is :
(a) upward to the left (b) downward to the right
(c) downward to the left (d) upward to the right
86. In case of diminishing return to a factor:
(a) marginal product diminishes
(b) total product increase at increasing rate
(c) total product increases at diminishing rate
(d) both a and b

MTP-March’22
87. The most important function of an entrepreneur is to _________

(a) Bear the sense of responsibility (b) Finance
(c) Innovate (d) None of these
88. How do the TVC curve behaves when the law of diminishing return begins to operate-
(a) Rise at a decreasing rate (b) Fall at an increasing rate
(c) Fall at a decreasing rate (d) Rise at an increasing rate
89. In the Short run level of output the firm at the optimum will be:
(a) Minimizing total losses (b) Maximizing total profit
(c) Either maximizing total profit or minimizing total losses
(d) None of these
90. If both factor prices and quantity moves in the same direction then it is called _______
(a) Decreasing Cost Industry (b) Increasing Cost Industry
(c) Constant Cost Industry (d) None of these
91. Increasing return to scale applies to:
(a) Long run (b) Short run
92. Isoquant are also called:
(a) Equal product curves (b) Production Indifference curves
(c) ISO product curves (d) All of the above
93. Who describes production function as the relationship between the maximum amount of output can
be produced and the input required to make that output :
(a) Samuelson (b) Malthas
(c) Hicks (d) None of these
94. The concept of marginal cost is closely related with-
(a) Variable Cost (b) Fixed Cost
(c) Opportunity Cost (d) Economic Cost
95. When the average product of labour is maximized the marginal product of labour:
(a) Equal zero (b) is maximized
(c) Equal APL (d) None of these
96. What are the main assumption of Production Function:
(a) Relationship between inputs and output exists for a specific period of time
(b) There is a given state of the art in production Technology.
(c) Input consideration Included in a particular function output resulting from their utilization is at
the maximum level.
(d) All the above
97. A rational producer will always produce in which stage of law of variable proportion:
(a) Stage I (b) Stage II
(c) Stage III (d) None of these

98. The rising part of the long run average cost curve is due to:
(a) Increasing return (b) Diseconomies of scale
(c) Increase in productivity due to Specialization (d) None of these
99. The vertical difference between TVC and TC is _____
(a) Total Fixed Cost (b) Marginal Cost
(c) Average Variable Cost (d) None of these
100. Which of the following is not part of the opportunity cost of going on holiday?
(a) The money you spent on a theatre show
(b) The money you could have made if you had stayed at home and worked
(c) The money you spent on airline tickets
(d) The money you spent on food
101. Net domestic expenditure is consumption expenditure plus ______
(a) Net foreign investment
(b) Net foreign investment plus net domestic investment
(c) Net domestic investment (d) Replacement expenditure
102. The law of variable proportions come into being when _______
(a) There are only two variable factors (b) There is a fixed factor and a variable factor
(c) All factors are variable (d) Variable factors yield less.
103. Which of the following statements is false in respect of fixed cost of a firm?
(a) As the fixed inputs for a firm cannot to changed in the short run, the TFC are constant, except
when the prices of the fixed inputs change.
(b) TFC continue to exist even when production is stopped in the short run, but they exist in the long
run even when production is not stopped.
(c) Total Fixed Costs (TFC) can be defined as the total sum of the cost of all the fixed inputs associated
with production in the short run.
(d) In the short run, a firm’s fixed cost cannot be escaped even when production is stopped.
MTP-Nov’21
104. What are the assumptions of Production Function:
(a) Relationship between inputs and output exists for a specific period of time.
(b) There is a given ‘state of the art’ in the production technology.
(c) Both (a) and (b)
(d) None of these
105. Envelope curve is also called:
(a) Long Run Average Cost curve (b) Short Run Average Cost curve
(c) Average Fixed Cost (d) None of these
106. Diminishing marginal returns inputs:
(a) Increasing Marginal Costs (b) Decreasing Marginal Costs
(c) Decreasing Average Variable Costs (d) None of these
107. Entrepreneur has its most important function as ______
(a) Bear the sense of responsibility (b) Earn profit
(c) Innovate (d) None of these

108. Elasticity of substitution in cobb Douglas Function is:
(a) Less than 1 (b) Equal to 1
(c) More than 1 (d) Infinity
109. The Average Product of labour is maximized when marginal product of labour:
(a) Equals Zero (b) Is maximized
(c) Equal the average product of labour (d) None of those
110. U Shaped Cost Curve is never represented as:
(a) Average Fixed Cost Curve (b) Marginal Cost Curve
(c) Average Cost Curve (d) Average Variable Cost Curve
111. The shape of the Cost curve depends upon:

(a) Cost function (b) Factor of Production
(c) Outlay (d) None of these
112. When the output increased by more than double if firm doubles it input is known as:
(a) Constant return to scale (b) Economies to scale
(c) Diseconomies of scale
(d) Violation of the law of diminishing return
113. Short run production function is explained by:
(a) Returns to scale (b) Law of variable proportion
(c) Law of demand (d) None of these
114. Factor of Production which is active:
(a) Labour (b) Land
(c) Capital (d) None of these
115. When ± = 3/5 and ² = 2/5 the return to scale for Cobb Douglas Production function are:
(a) Increasing (b) Decreasing
(c) Constant (d) First decreasing and then increasing
MTP-Oct’21
116. Increasing return of scale is applied in
(a) Long Run (b) Short Run
117. Marginal Cost can be directly derived from
(a) Total Variable Cost (b) Total Fixed Cost
(c) Average Cost (d) Average Fixed Cost
118. Curve which are intersected by marginal cost curve at their minimum points is
(a) AVC and AFC (b) AC and AVC
(c) AC and AFC (d) AC and TVC
119. Reason for operating the law of diminishing returns is ____
(a) Imperfect Substitution between factors (b) Scarcity of factors

120. A Rational Producer operates in short run production in which stage?
(a) First Stage (b) Second Stage
(c) Third Stage (d) None of these
121. Law of variable proportion is related to :
(a) Long Run (b) Short Run
122. Isoquant in the relevant range are:
(a) Convex to the Origin (b) Negatively Sloped
(c) Cannot cross (d) All of the Above
123. If the Long Run Average Cost Curve falls as output expands is due to :
(a) The law of diminishing return (b) Diseconomies of scale
(c) Economies of scale (d) None of these
124. What will be the situation if factor prices and factor quantities move in the same direction
(a) A decreasing Cost Industry (b) Increasing Cost Industry
(c) Constants Cost Industry (d) All of these
ANSWER KEYS
1 (b) 2 (a) 3 (a) 4 (d)

5 (d) 6 (b) 7 (a) 8 (b)
9 (c) 10 (d) 11 (b) 12 (c)
13 (b) 14 (a) 15 (d) 16 (b)
17 (b) 18 (b) 19 (c) 20 (d)
21 (c) 22 (a) 23 (b) 24 (b)
25 (a) 26 (d) 27 (d) 28 (b)
29 (b) 30 (c) 31 (d) 32 (c)
33 (d) 34 (a) 35 (a) 36 (a)
37 (d) 38 (a) 39 (c) 40 (a)
41 (c) 42 (d) 43 (b) 44 (c)
45 (c) 46 (b) 47 (d) 48 (c)
49 (b) 50 (b) 51 (c) 52 (a)
53 (a) 54 (b) 55 (c) 56 (a)
57 (d) 58 (c) 59 (c) 60 (b)
61 (d) 62 (c) 63 (b) 64 (b)

65 (b) 66 (c) 67 (b) 68 (a)
69 (d) 70 (a) 71 (a) 72 (a)
73 (a) 74 (c) 75 (c) 76 (a)
77 (b) 78 (b) 79 (c) 80 (a)
81 (a) 82 (b) 83 (c) 84 (b)
85 (b) 86 (d) 87 (c) 88 (d)
89 (c) 90 (c) 91 (a) 92 (d)
93 (a) 94 (d) 95 (c) 96 (d)
97 (b) 98 (c) 99 (a) 100 (d)
101 (c) 102 (b) 103 (b) 104 (c)
105 (a) 106 (a) 107 (c) 108 (b)
109 (c) 110 (a) 111 (a) 112 (b)
113 (b) 114 (a) 115 (c) 116 (a)
117 (b) 118 (b) 119 (c) 120 (b)
121 (b) 122 (d) 123 (c) 124 (b)

NOTES

Chapter-4
Meaning and Types of Markets
MTP-May’20
1. Excess capacity is not found under _______
(a) Monopoly (b) Monopolistic competition
(c) Perfect competition. (d) Oligopoly
2. Administered prices refer to:
(a) Prices determined by forces of demand and supply
(b) Prices determined by sellers in the market
(c) Prices determined by an external authority which is usually the government
3. When a market is in equilibrium:
(a) No shortages exist.
(b) Quantity demanded equals quantity supplied.
(c) A price is established that clears the market.
(d) All of the above are correct.
4. Agricultural goods markets depict characteristics close to
(a) Perfect competition. (b) Oligopoly.
(c) Monopoly. (d) Monopolistic competition.
5. Monopolies are allocatively inefficient because:
(a) They restrict the output to keep the price higher than under perfect competition.
(b) They charge a price higher than the marginal cost.
(c) Both (a) and (b) are correct.
(d) Both (a) and (b) are incorrect.
6. In the long-run, some firms will exit the market if the price of the good offered for sale is less than:
(a) marginal revenue. (b) marginal cost.
(c) average total cost. (d) average revenue.
7. Price discrimination will be profitable only if the elasticity of demand in different markets in which the
total market has been divided is:
(a) uniform (b) different (c) less (d) zero
8. Suppose a firm is producing a level of output such that MR > MC, what should be firm do to maximize its
profits?
(a) The firm should do nothing. (b) The firm should hire less labour.
(c) The firm should increase price. (d) The firm should increase output.

9. Assume that when price is Rs. 20, the quantity demanded is 15 units, and when price is Rs. 18, the
quantity demanded is 16 units. Based on this information, what is the marginal revenue resulting from
an increase in output from 15 units to 16 units?
(a) Rs. 18 (b) Rs. 16 (c) Rs. 12 (d) Rs. 28
10. When the monopolist divides the consumers into separate sub markets and charges different prices in
different sub-markets it is known as
(a) first degree of price discrimination (b) second degree of price discrimination
(c) third degree of price discrimination (d) none of the above.
11. The firm and the industry are one and the same in _______________
(a) Perfect competition (b) Monopolistic competition
(c) Duopoly (d) Monopoly
12. If the average cost is higher than the average revenue then the firm incurs _________________
(a) Normal profit (b) Abnormal profit
(c) Loss (d) No profit, no loss
13. Secular period is also known as
(a) very short period (b) short period
(c) very long period (d) long period
14. Stock exchange market is an example of
(a) unregulated market (b) regulated market
(c) spot market (d) none of the above
15. When e = 1 then MR is
(a) positive (b) zero (c) one (d) negative
16. When e < 1 then MR is
(a) negative (b) zero (c) positive (d) one
17. The Average revenue and price are always equal under-
(c) Perfect competition (d) All market forms
MTP-Oct ’19
18. When average revenue is Rs.30 and output is equal to 50 units total revenue wi ll be –
(a) 2500 (b) 1500 (c) 1800 (d) 2000
19. If total revenue of a firm increases by Rs 65025 due to an increase in sale of good X from 60 units to 75
units , then marginal revenue will be –
(a) 3000 (b) 4335 (c) 4000 (d) 3335
20. Which of the following is not an essential condition of pure competition?
(a) Large number of buyers and sellers (b) Homogeneous product
(c) Freedom of entry (d) Absence of transport cost
21. Product differentiation is a key feature of-
(a) Perfect competition (b) Oligopoly
(c) Monopoly (d) Monopolistic competition
22. A market induces cartel is –
(a) Perfect competition (b) Monopoly (c) Oligopoly (d) None of these
132 Chapter 4 : Meaning and Types of Markets
23. In the context of oligopoly, the kinked demand hypothesis is designed to explain -
(a) Price and output determination (b) Price rigidity
(c) Price leadership (d) Collusion among rivals
24. A combination of monopoly market and a monopsony market is known as-
(a) Duopoly (b) Monopsony
(c) Oligopsony (d) Bilateral monopoly
25. A firm encounters its “shutdown point” when-
(a) Average total cost equals price at the profit-maximising level of output
(b) Average variable cost equals price at the profit-maximising level of output
(c) Average fixed cost equals price at the profit-maximising level of output
(d) Marginal cost equals price at the profit-maximising level of output
26. Homogeneous product are sold under-
(a) Collusive oligopoly (b) Non-collusive oligopoly
(c) Perfect oligopoly (d) Imperfect oligopoly
27. A market structure in which many firms sell products that are similar but not identical is known as-
(a) Monopolistic competition (b) Monopoly
(c) Perfect competition (d) Oligopoly
28. In a very short period market-
(a) The supply is fixed (b) The demand is fixed
(c) Demand and supply are fixed (d) None of the above
29. A monopolist is a-
(a) Price maker (b) Price –taker (c) Price adjuster (d) None
MTP-March’19
30. A firm under perfect competition will be making minimum losses (in the short run) at a point where:
(a) MC > MR (b) MR> MC (c) MC = MR (d) AC = AR
31. In perfect competition utilization of resources is
(a) Partial (b) Moderate (c) Full (d) Over
32. Price discrimination occurs when:
(a) Producer sells a specific commodity or service to different buyers for the same price
(b) Producer sells specific commodity or service to different buyers at two or more different prices
due to difference in cost
(c) Producer sells a specific commodity or service to different buyers at two or more different prices
for reasons not associate with difference in cost
(d) Producer under perfect competition sells different goods to consumers at different prices
33. MR curve under Monopoly lies between AR and Y – axis because, the rate of decline of the MR is
(a) Just half of the rate of decline of AR
(b) Just equal to the rate of decline of AR
(c) Just triple the rate of decline of the average revenue
(d) Just double the rate of decline of the average revenue
34. In the long run, normal profits are included in the ______ curve.
(a) LAC (b) LMC (c) AFC (d) SAC

(a) Monopolist can earn only profits
(b) Firms in a perfectly competitive market are price maker
(c) Industry in a perfectly competitive market is a price taker
(d) AR curve and demand curve are same
36. Soap industry is an example of:
(a) Oligopoly (b) Perfect competition
(c) Monopolistic competition (d) Monopoly
37. When price is less than average variable cost at the profit maximizing level of output, a firm should :
(a) Shut down, since it cannot recover its variable cost
(b) Produce where MC = MR, if operating in short run
(c) Produce where MC = MR, if operating in long run
38. For the Price taking firm:
(a) Marginal Revenue is less than price
(b) Marginal revenue is greater than price
(c) The relationship between marginal revenue and price is not clear
(d) Marginal revenue is equal to average revenue
39. If Sandwiches are being sold for Rs. 14 each, what is Mohan’s profit maximizing level of output?
(a) 10 Sandwiches (b) 40 Sandwiches
(c) 50 Sandwiches (d) 60 Sandwiches
40. What is the total variable cost when 60 sandwich are produced?
(a) Rs. 690 (b) Rs. 960 (c) Rs. 110 (d) Rs. 440
41. What is the average fixed cost when 20 sandwiches are produced?
(a) Rs. 5 (b) Rs. 3.33 (c) Rs. 10 (d) Rs. 2.5
42. Between 10 to 20 sandwiches, what is the marginal cost per sandwich?
(a) Rs. 11 (b) Rs. 13 (c) Rs. 14 (d) Rs. 9
43. Excess Capacity is the essential characteristic of the firm in the market form of:
(a) Monopoly (b) Perfect competition
(c) Monopolistic competition (d) Oligopoly
44. A condition needed for a perfectly competitive industry to exist is that:
(a) Buyers are able to influence the price of the commodity
(b) Any units of commodity are considered by buyers to be different
(c) Buyer discriminates in their purchases based on non-price factors.
(d) There are no obstacles to the free mobility of resources
45. Assume that when price is Rs. 40 quantity demanded is 9 units, and when price is Rs. 38, quantity
demanded is 10 units. Based on this information, what is the marginal revenue resulting from an
increase in output from 9 units to 10 units?
(a) Rs. 20 (b) Rs. 40 (c) Rs.38 (d) Rs. 1

MTP-April ‘19
46. In the long run under which competition a firm may earn super normal profits?
(a) Monopolistic competition (b) Perfect competition
(c) Oligopoly (d) Monopoly
47. A monopolist is able to maximize his profits when:
(a) His output is maximum (b) He charges high price
(c) His average cost is minimum (d) His marginal cost is equal to marginal revenue
48. In Imperfect competition:
(a) Excess capacity always exists (b) Excess capacity never exists
(c) Excess capacity may or may not exist (d) None of the above
49. Product differentiation is the most important feature of:
(a) Monopolistic Competition (b) Monopoly
(c) Oligopoly (d) Perfect Competition
50. Relationship between AR, MR and Price elasticity of demand is
(a) MR = AR + [e-1/e] (b) MR = AR × [e-1/e]
(c) AR = MR × [e-1/e] (d) MR = AR × [e/e – 1]
51. In a perfectly competitive firm, MC curve above AVC is the _____ Curve of the firm
(a) Average cost (b) Marginal revenue (c) Demand (d) Supply
52. Which is not the function of an entrepreneur?
(a) Initiating a business enterprise and resource co -ordination
(b) Risk bearing or uncertainty bearing
(c) Innovation
(d) Mobilisation of savings
53. In perfect competition in the long run there will be ___________
(a) Normal Profits (b) Super Normal Profit
(c) Less production (d) Cost will be falling
54. A firm encounters its shut down point when:
(a) Average total cost equal price at the profit maximizing level of output
(b) Average variable cost equals price at the profit maximizin g level of output
(c) Average fixed cost equals price at the profit maximizing level of output
(d) Marginal cost equals price at the profit maximizing level of output
55. In which form of the market structure is the degree of control over the price of its product by a firm is
very large?
(a) Imperfect competition (b) Monopoly
(c) Oligopoly (d) Perfect competition
56. When production is 40 units, the average cost is:
(a) Rs. 4.40 (b) Rs. 7.50 (c) Rs. 85 (d) Rs. 92.50

57. In the table, marginal cost per unit that corresponds to 40 units of production is:
(a) Rs. 22 (b) Rs. 85 (c) Rs. 176 (d) Rs. 880
58. To maximize profit the firm should produce:
(a) 15 units (b) 30 units (c) 35 units (d) 50 units
59. If the market price drops from Rs. 1 00 to Rs. 56 per unit, the firm’s short run response should be
(a) Shut down (b) Produce 5 units
(c) Produce 20 units
(d) Continue to produce the same number of units as before the drop in price
60. Under which market structure, the control of firm over price is nil?
(a) Perfect competition (b) Monopoly
(c) Oligopoly (d) Monopolistic Competition
61. For the prices- taking firm:
(a) Marginal revenue is less than price (b) Marginal revenue is equal to price
(c) Marginal revenue is greater than price
(d) The relationship between marginal revenue and price is indeterminate
MTP-April ’21
62. Unique supply curve in monopoly is not due to ____
(a) P > MC (b) P < MC (c) P = MC (d) None of these
63. Shampoo manufactures is an example of :
(a) Perfect Competition (b) Monopolistic Competition
(c) Monopoly (d) None of these
64. Reliance Jio can be described as part of which form to market structure:
(a) Oligopoly (b) Monopoly (c) Duopoly (d) Perfect Competition
65. Price Elasticity of demand of a firm is infinite in ______
(a) Monopoly (b) Perfect Competition
66. Price Discrimination cannot be implemented?
(a) When there is perfect competition in the market.
(b) Elasticity of demand must be different in both the market.
(c) Two or more market which can be separated and can be kept separate.
(d) All the above
67. Raw materials and other factors of production is not monopolised, and labour is not unionised in which
form of market structure:
(a) Monopoly (b) Perfect Competition
(c) Monopolistic Competition (d) Oligopoly
68. AR is different from MR under:
(c) Perfect Competition (d) Both a and b

69. Wild Animals had destroyed the entire crops of a farmer what effect it will have on the price in perfect
competition:
(a) Price will remain constant (b) Price will decrease
(c) Price will decrease (d) None of these
70. Cross elasticity of Product in Monopoly is:
(a) Zero (b) High (c) Infinity (d) None of these
71. In the following diagram the Monopolist is incurring ———
(a) Losses (b) Profit (c) Super normal profit (d) None of these
72. The dilemma faced by a Monopolistic is setting ____.
(a) Price (b) Output (c) Both a and b (d) Either a or b
73. Cartels can be formed in which form of market:
(c) Oligopoly (d) None of these
74. Average revenue curve is more elastic under monopolistic competition than under monopoly due to:
(a) Government control (b) Availability of close substitute
(c) Lack of no substitute (d) None of these
75. Entry of firms is barred in which form of market structure:
(a) Oligopoly (b) Monopoly
(c) Perfect Competition (d) Monopolistic Competition
76. In the absence of competition the monopolist:
(a) The monopolist need not produce at the optimal level
(b) Produce at the optimal level
(c) Either a or b
(d) None of these
77. Monopoly market and Monopsony market when in combination caused:
(a) Monopolistic market (b) Oligopoly market
(c) Bilateral Monopoly market (d) Duopoly market.
78. Which of the following statement is correct?
(a) An industry consists of many firms.
(b) Price rigidity is an important feature of monopoly.

(c) Under perfect competition factors of production do not move freely
(d) Selling cost are possible under perfect competition.
79. Marketing Planning is based on:
(a) Demand forecasting (b) Demand function
(c) Demand estimation (d) Demand Analysis
80. Monopolistic Competition theory architect was :
(a) Roden (b) Marx (c) J R Hicks (d) Chamberlin
81. Which markets form has features or selling cost :
(a) Oligopoly (b) Monopolistic Competition
(c) Monopoly (d) None of these
82. Cinema Halls, Telephone bills etc are following
(a) Differential Pricing (b) Full cost pricing
(c) Marginal Cost Pricing (d) None of these
MTP-March ’21
83. The condition for pure competition to be fulfilled are –
(a) large numbers of buyers and sellers
(b) products are homogeneous
(c) firms are free from entry and exit from the market
(d) all the above
84. When the firm is in the long run equilibrium in perfect competition which of the following is true –
(a) AC = MR (b) TR = TC (c) the firm are earning supernormal profit
(d) None of these
85. Which is not the characteristics of monopolistic competition:
(a) large number of sellers (b) homogeneous Product
(c) freedom of entry and exit (d) non price discrimination
86. Demand Curve in the monopolistic competition is –
(a) infinitely elastic
(b) downward sloping and highly inelastic
(c) downward sloping and more elastic demand curve.
(d) none of these.
87. The concept of price rigidity in Sweezy’s model is related to which market form:
(a) oligopoly market (b) perfect competition market
(c) monopoly market (d) monopolistic market
88. Which of the following statement is incorrect ?
(a) there is no difference between a firm and an Industry
(b) monopolist may raise the price and restrict the output
(c) heterogeneous product are offered for sale in perfect competition
(d) in monopolistic competition product differentiation is peculiar.

89. Foreign Exchange market is an example of –
(a) perfect competition (b) oligopoly
(c) monopoly (d) monopolistic competition
90. Under which market form price discrimination cannot persist –
(a) oligopoly (b) monopolistic competition
(c) monopoly (d) perfect competition.
91. The Relationship between AR, MR and Price Elasticity –
(a) MR = AR X e-1 ÷ e (b) AR = MR X e-1 ÷e
(c) AR – MR = e-1 ÷e (d) None of these
92. The Price elasticity for Monopolistic Firm is :
(a) e>1 (b) e < 1 (c) e =1 (d) none of these
93. Dynamic fare charged by Indian railways is an example of :
(a) pure monopoly (b) discriminating monopoly
(c) perfect competition (d) none of these
94. Price discrimination is possible when
(a) seller should have some control over the supply of the Product
(b) price elasticity of the product should be different in different submarket
(c) seller should be able to divide his market into two or more submarket
(d) none of these
95. The distinction between selling cost and production cost was made by:
(a) Chamberlin (b) Sweezy
(c) Mrs Joan Robinson (d) None of these
96. The firm and industry are same in :

(a) duopoly (b) monopoly
(c) perfect competition (d) none of these
97. A rise in supply and demand in equal proportion will result in
(a) increase in equilibrium price and decrease in equilibrium quantity
(b) decrease in equilibrium price and increase in equilibrium quantity
(c) no change in equilibrium price and increase in equilibrium quantity
(d) increase in equilibrium price and no change in equilibrium quantity
98. When the output increases from 20 to 30 units and TR increases from Rs 400 to Rs 500 then MR is
99. Break even point indicate which of the following ?
(a) TR = TC (b) TR>TC (c) TR= TVC (d) none of these
100. Average revenue curve is more elastic under monopolistic competition than monopoly due to
(a) low degree of governmental control (b) lack of close substitute
(c) availability of close substitute (d) none of these

101. The Government offer minimum assured price to the farmers to purchase their output is called:
(a) market Price (b) support Price
(c) equilibrium Price (d) ceiling Price
102. The price in collusive oligopoly is decided by:
(a) firm (b) price leader (c) industry (d) none of these
MTP-March ‘22
103. If the monopolist incur losses in the short run then in the long run:
(a) It will stay in the business (b) Go out of business
(c) Will break even (d) Any of the above is possible
104. A cartel which is market sharing will reach the monopoly situation :
(a) Always when the product is homogenous (b) Always when the product is differentiated
(c) Sometime (d) None of these
105. In a monopolistically competitive market:
(a) Firm face a perfectly elastic demand for its product
(b) Does not face a perfectly elastic demand for its product
(c) Cannot be determined
(d) None of these
106. Price discrimination to be profitable elasticity of demand in different sub market will be _____
(a) Different (b) Uniform
(c) Zero (d) None of these
107. The Concept of Price rigidity in market is explained in which form of market:
(a) Monopolistic Market (b) Perfect Competition
(c) Oligopoly (d) Monopoly
108. Full Capacity is utilized in the which market condition______
(a) Perfect Competition (b) Monopoly
(c) Oligopoly (d) None of these
109. For a price taking firm:
(a) Marginal revenue is less than price (b) Marginal revenue is equal to price
(c) Marginal revenue is great than price.
(d) The relationship between marginal revenue and price is indeterminate.
MTP-Nov’21
110. Perfect Competition is closely represented by:
(a) Stock Market (b) Wheat Market
(c) Soft Drinks Market (d) None of these
111. When will a firm decides to exit the industry:
(a) Total curve starts rising (b) Marginal cost starts rising
(c) Average cost starts rising (d) Price is less than LAC

112. If ATC > AR the monopolist will be incurring ____
(a) Losses (b) Profit
(c) Neutral (d) None of these
113. Electricity Companies sells electricity at a cheaper rate in rural areas than for industrial use due to :
(a) Price Discrimination (b) Perfect Competition
(c) Monopolistic Competition (d) None of these
114. Pears, Liril & Dove are example of
115. Which of the following is not the characteristic of Oligopoly market:
(a) Strategic Independence (b) Importance of advertising and selling cost
(c) Group behaviour (d) Regional Market
116. The element of market are:
(a) Buyers and Sellers (b) A Product or Service
(c) Geographical Area (d) Bargaining for a price
117. For a Price taking firm:
(a) Marginal revenue is less than Price (b) Marginal revenue is equal to Price
(c) The relationship between behavior marginal revenue and Price is indeterminate
(d) Marginal revenue is greater than price `
118. Monopolist Charges different price for his commodity in discriminating monopoly implies:
(a) At different places (b) For different uses
(c) From different group of consumers (d) Any of the above
119. Full capacity is utilized only when there is:
(c) Monopolistic Competition (d) Price discrimination
120. ‘Competition among the few’ is also referred as:
(a) Oligopoly (b) Monopoly
121. The Product under Pure Monopoly Is:
(a) Homogenous (b) Differentiated
(c) Unrelated (d) None of these
122. Perfectly Competitive firm and industry are both in long run equilibrium when:
(a) P = MR = SMC = LMC (b) P = MR = Lowest point on the LAC
(c) P = MR = SAC = LAC (d) All of the above
123. A market refers to ______
(a) Meeting place of buyer and seller
(b) Does not necessarily refer to meeting place between buyer and seller

(c) Extends over a city
(d) Extends over the entire nation.
124. An economic profit is earned by a perfectly competitive firm when:
(a) MR < MC (b) P < ATC
(c) P > AVC (d) P > ATC
125. In Oligopoly the firms may collude in order to:
(a) Increase Competition (b) Prisoner dilema for buyers
(c) To raise the price of the good they offer (d) None of these
126. In which of the market firm price discrimination cannot persist:
(a) Monopoly (b) Oligopoly
(c) Monopolistic Competition (d) Perfect Competition
127. In monopoly and monopolistic Competition:
(a) Average Revenue > Marginal Revenue (b) Average Revenue < Marginal Revenue
(c) Average Revenue = Marginal Revenue (d) None of these
MTP-Oct’21
128. After identifying the markets the enterprise has to make decision regarding 4Ps which one of the
following is not one of those 4Ps :
(a) Promotion (b) Population (c) Place (d) Produce
129. The kinked demand curve of Oligopoly is useful in explaining
(a) The process by which oligopolistic merge
(b) How the collusion work
(c) Price and output are sensitive to charge in marginal cost.
(d) Why oligopolistic price might charge only infrequently
130. Long Run Period normal price for a competitive firm will be :
(a) Equal MC of Production only (b) Equal TC of Production only
(c) Equal AC and MC of Production (d) None of these
131. Monopolistic Competition has features of
(a) Monopoly and competition with features of monopoly predominating
(b) Monopoly and competition with feature of Competition predominating
(c) Monopoly but not competition
(d) None of these
132. A firm normal profit earned are included in ___
(a) Explicit Cost (b) Implicit Cost
(c) Variable Cost (d) Fixed Cost
133. In case of Perfect Competition how much selling cost are incurred:
(a) Negligible (b) Zero
(c) Very high (d) Very less

134. Marginal revenue is equal to price in which form of market:
135. In Oligopoly the demand curve is :
(a) Indeterminate (b) Highly Elastic
(c) Less Elastic (d) Perfectly Elastic
136. There is an inverse relation between price and demand for the products of a firm under :
(a) Monopoly only (b) Monopolistic Competition only
(c) Both Monopoly and Monopolistic Competition
(d) Perfect competition
137. The market price cannot be influenced by a seller under :
(a) Monopolistic Competition (b) Monopoly
(c) Perfect Competition (d) All the above
138. Entry of new firm is monopoly is :
(a) Possible only in the long run (b) Possible only in the Short run
(c) Restricted at all times (d) Both (a) and (b)
139. Nuclear Power represents which type of market structure :
(a) Government Monopoly (b) Perfect Competition
(c) Monopolistic Competition (d) Oligopoly
140. Monopoly Market and Monopsony market combination is called :
(a) Duopoly Market (b) Oligopoly Market
(c) Bilateral Monopoly Market (d) Monopolistic Market
141. Price discrimination cannot persist under which of the market form:
(a) Monopolistic (b) Monopoly
(c) Perfect Competition (d) Oligopoly
142. Time elements was conceived by :
(a) Paul Sweezy (b) Hicks
(c) Marshall (d) Simon Kuznets
143. Price discrimination is desirable as :
(a) It promotes equity (b) It makes production feasible
144. Which of the following can be classified as Oligopoly Market :
(a) Wheat Farming (b) Clothing Industry
(c) Restaurant Industry (d) Long distance Telephone Service
145. Marginal Revenue Curve lies ________ its demand curve in monopolistic competition due to _____
(a) Below ; Product differentiation (b) Above - ; Barriers to entry
(c) Above ; Product – differentiation (d) None of these

146. A firm maximizes profit in the short run in Perfect Competition by deciding :
(a) What Price to charge (b) How much output to produce
(c) To enter a market or not (d) None of these
147. The Pure monopolist in the long run can make pure profit due to :
(a) High Selling Price (b) Advertising
(c) Low LAC Cost (d) Blocked entry
148. In kinked demand curve model the Oligopolist :
(a) Do not collude (b) Recognise their independence
(c) Tend to keep price constant (d) All the above
ANSWER KEYS
1 (c) 2 (c) 3 (d) 4 (a)
5 (c) 6 (c) 7 (b) 8 (d)
9 (c) 10 (c) 11 (d) 12 (c)
13 (c) 14 (b) 15 (b) 16 (a)
17 (d) 18 (b) 19 (d) 20 (d)
21 (d) 22 (c) 23 (b) 24 (d)
25 (b) 26 (c) 27 (a) 28 (a)
29 (a) 30 (b) 31 (c) 32 (c)
33 (d) 34 (a) 35 (d) 36 (c)
37 (a) 38 (d) 39 (b) 40 (b)
41 (a) 42 (c) 43 (c) 44 (d)
45 (a) 46 (d) 47 (d) 48 (a)
49 (a) 50 (b) 51 (d) 52 (d)
53 (a) 54 (b) 55 (b) 56 (d)
57 (c) 58 (b) 59 (c) 60 (a)
61 (b) 62 (a) 63 (b) 64 (a)
65 (b) 66 (d) 67 (b) 68 (d)
69 (a) 70 (a) 71 (a) 72 (d)
73 (c) 74 (b) 75 (b) 76 (a)
77 (c) 78 (a) 79 (a) 80 (d)
81 (b) 82 (a) 83 (d) 84 (c)
85 (b) 86 (c) 87 (a) 88 (c)
89 (a) 90 (d) 91 (a) 92 (a)

93 (b) 94 (b) 95 (a) 96 (b)
97 (c) 98 (b) 99 (a) 100 (c)
101 (b) 102 (b) 103 (d) 104 (c)
105 (b) 106 (a) 107 (c) 108 (a)
109 (b) 110 (b) 111 (d) 112 (a)
113 (a) 114 (c) 115 (d) 116 (c)
117 (b) 118 (d) 119 (a) 120 (a)
121 (a) 122 (d) 123 (b) 124 (d)
125 (c) 126 (d) 127 (a) 128 (b)
129 (d) 130 (c) 131 (b) 132 (b)
133 (b) 134 (a) 135 (a) 136 (c)
137 (c) 138 (c) 139 (a) 140 (c)
141 (a) 142 (c) 143 (c) 144 (d)
145 (a) 146 (b) 147 (d) 148 (d)

NOTES
146 Chapter 5 : Business Cycle

Chapter-5
Business Cycles
MTP-May’20
1. If demand for goods and services is more than their supply, the resultant inflation is :
(a) Cost push inflation. (b) stagflation
(c) deflation. (d) demand pull inflation.
2. The lowest point in the business cycle is referred to as the
(a) Expansion. (b) Boom. (c) Peak. (d) Trough
3. Economists use changes in a variety of activities to measure the business cycle and to predict where
the economy is headed towards.is called-
(a) Leading indicators (b) Indicators
(c) Lagging Indicators (d) None of these
4. A significant decline in general economic activity extending over a period of time is-
(a) Business cycle (b) Contraction phase
(c) Recession (d) Recovery
5. According to ________________ trade cycles occur due to onset of innovations.
(a) Hawtrey (b) Adam Smith (c) J M Keynes (d) Schumpeter
6. Economic recession shares all of these characteristics except.
(a) Fall in the levels of investment, employment
(b) Incomes of wage and interest earners gradually decline resulting in decreased demand for goods
and services
(c) Investor confidence is adversely affected and new investments may not be forthcoming
(d) Increase in the price of inputs due to increased demand for inputs
7. A variable that tends to move later than aggregate economic activity is called
(a) a leading variable. (b) a coincident variable.
(c) a lagging variable. (d) a cyclical variable.
8. Industries that are extremely sensitive to the business cycle are the
(a) Durable goods and service sectors.
(b) Non-durable goods and service sectors.
(c) Capital goods and non-durable goods sectors
(d) Capital goods and durable goods sectors.

MTP-Oct’19
9. The term business cycle refers to-
(a) The ups and downs in production of commodities
(b) The fluctuation levels of economic activity over a period of time
(c) Decline in economic activities over prolonged period of time
(d) Increasing unemployment rate and diminishing rate of savings
10. The lowest point in the business cycle is referred as the –
(a) Expansion (b) Boom (c) Peak (d) Trough
11. A indicator which occur simultaneously with the business cycle movements is-
(a) Lagging indicator (b) Coincident indicator
(c) Leading indicator (d) None of these
12. Example of Lagging indicator is-
(a) Corporate profits (b) Interest rates
(c) Consumer price index (d) All of these
13. “Trade cycle is a purely monetary phenomenon”, according to-
(a) Pigou (b) Hawtrey (c) Keynes (d) Schumpeter
14. When aggregate economic activity is declining, the economy is said to be in-
(a) Contraction (b) An Expansion (c) Trough (d) Turning point
MTP-March’19
15. Macroeconomics is the study of:
(a) Inflation (b) Unemployment (c) Growth (d) All of the above
16. Which of the following is not a variable in the index of leading indicators?
(a) New consumer goods order (b) Delayed deliveries
(c) New building permits (d) Prime rate
17. When aggregate economic activity is increasing the economy is said to be in
(a) An expansion (b) a contraction (c) A peak (d) A turning point.
MTP-April ’21
18. Innovation theory is propounded by :
(a) Schumpeter (b) Nicholas Kaldor
(c) Keynes (d) None of these
19. Fluctuations in Economic activities are due to:
(a) Aggregate demand (b) Aggregate effective demand
(c) Effective demand (d) None of these
20. During expansion phase of business cycle which of the following does not occur:
(a) Business profits and business confidence tend to increase
(b) Demand for labour increases as employment increases.
(c) Purchase of all types of goods is increased by consumer.
(d) None of these
21. Phase of business cycle are ___
(a) Expansion, peak, contraction, and trough
(b) Contraction, expansion, trough, and boom.
(c) Expansion, contraction, peak and trough
(d) Peak, depression, bust and boom
22. External causes of business Cycle are:
(a) Money Supply (b) Fluctuations in Investment
(c) Technological Shock (d) None of these
23. Great Depression of 1930’s is an example of:
(a) Business cycle (b) Consumer sovereignty
(c) Freedom of choice (d) None of these
24. The Turning point of business cycle is practiced by :
(a) Leading Indicator (b) Coincident
(c) Lagging indicator (d) All the above
25. Modern business activities are based on the anticipations of business community and are affected by
waves of optimism or pessimism:
(a) Pigou (b) Schumpeter (c) Hawtrey (d) Keynes
MTP-March ’21
26. What are the internal causes of business cycle?
(a) fluctuations in effective demand. (b) macroeconomic policies
(c) money Supply (d) All the above
27. According to Hawtrey trade cycle is a _
(a) monetary Phenomenon (b) unplanned Phenomenon
(c) fiscal Phenomenon (d) all the above
28. Which of the following describe a typical business cycle?
(a) economic expansions are followed by contractions.
(b) inflation is followed by rising income and unemployment.
(c) economic expansion are followed by economic growth and development.
(d) stagflation is followed by Inflationary growth.
MTP-March’22
29. The Turning point of business cycle is predicted by :
(a) Lagging Indictor (b) Leading Indicator
(c) Coincident (d) All of the above

30. Fluctuation in Economic activities are due to :
(a) Change in money supply (b) Profitability
(c) Fluctuation in aggregate demand (d) None of these
31. Variable that change after real output change are:
(a) Leading Indicator (b) Lagging Indicator
(c) Concurrent Indicator (d) None of these
32. Modern business activities are based on the anticipations of business community and are affected by
waves of optimism or pessimism is opined by___
(a) Pigou (b) Keynes
(c) Hawtrey (d) None of these
33. Businesses whose fortunes are closely linked to the rate of economic growth is referred to as :
(a) Cyclical (b) Counter Cyclical
(c) Fiscal Policy (d) None of these
34. Globalization indicate rapid ___ between Countries :
(a) Competition (b) Investment
(c) Integration (d) None of these
MTP-Nov’21
35. Coincident indicator is not indicated as:
(a) Inflation (b) Industrial Production
(c) Retail Sales (d) New order for Plant and equipment
36. Which of the following is not an external causes of Business Cycle:
(a) Technology Shock (b) Fluctuations in Investment
(c) Natural Factors (d) Population Growth
37. According to whom fluctuations in economic activities are due to fluctuations in aggregate effective
demand:
(a) ScIumpeter (b) Pigou
(c) Keynes (d) Hawtrey
38. Collectively peaks and troughs together is known as:
(a) Turning Points (b) Contraction
(c) Expansion (d) A trough
39. Variables that change before the real output changes are called:
(a) Lagging indicator (b) Leading Indicator
(c) Concurrent Indicator (d) None
40. Economy’s historical performance was reflected by:
(a) Lagging indicating (b) Leading indicating

MTP-Oct’21
41. Cost of living increase when business cycle is operating at its
(a) Lowest point (b) Peak
(c) Contracting (d) Expanding
42. Which is more prone to the adverse effects of the business cycle _______
(a) Services (b) Industries
(c) Agriculture (d) None of these
43. To influence spending the monetary policy is directed at directly influencing in the short run :
(a) Interest Rate (b) Unemployment
(c) Inflation Rate (d) Growth Rate
44. During recession what will be the market demand for new cars?
(a) Demand Curve will shift to the right
(b) Demand curve will shift to the left
(c) Demand will not shift but the quantity of cars sold per month will decrease
(d) Demand will not shift but the quantity of cars sold per month will increase
45. Economic indicator required to predict the turning point of business cycle is :
(a) Leading indicator (b) Lagging indicator
(c) Coincident (d) All of the above
ANSWER KEYS
1 (a) 2 (b) 3 (a) 4 (d)
5 (b) 6 (d) 7 (c) 8 (b)
9 (b) 10 (d) 11 (b) 12 (d)
13 (b) 14 (a) 15 (d) 16 (d)
17 (a) 18 (a) 19 (b) 20 (c)
21 (a) 22 (c) 23 (a) 24 (d)
25 (a) 26 (d) 27 (a) 28 (a)
29 (d) 30 (c) 31 (b) 32 (a)
33 (a) 34 (c) 35 (d) 36 (b)
37 (c) 38 (a) 39 (b) 40 (a)
41 (d) 42 (b) 43 (a) 44 (b)
45 (d)
---0---0---
NOTES

PAPER-4 PART-II: BUSINESS AND COMMERCIAL KNOWLEDGE
Chapter-1
Business and Commercial Knowledge – An Introduction
MTP-May ’20
1. Which of the following occupations requires rendering of services based upon specialised knowledge
and membership of an accreditation and assessment body?
(a) Employment (b) Profession (c) Business (d) Agriculture
2. Which of the following is not a feature of LLP?
(a) A legal entity separates from its partners.
(b) There is no limit on maximum number of partners.
(c) Every partner of LLP is the agent of the firm only.
(d) Registrar of the firm (of the respective state) is the administering authority.
3. Which of the following is the concern relate to Business & Commercial Knowledge? [MTP-March ‘21]
(a) Sustainability (b) Sociology (c) Traditional (d) Society at large
MTP-Oct ‘19
4. A partnership may not be formed to carry on:
(a) Any trade (b)Occupation (c) Profession (d) Social enterprise
5. Which of the following statement is correct with respect to HUF?
(a) HUF earns income from salary
(b) Four successive generations of an undivided
(c) HUF enjoys a separate entity status under Income tax act –1961
6. Which of the following statements characterises the best non-economic activities?
(a) Non-economic activities do not require any investment of resources
(b) These activities do not entail any operational costs
(c) These activities are undertaken by ascetics
(d) The underlying purpose of these activities is not earning of a livelihood but social, psychological
or spiritual satisfaction
Navkar Institute | CA Foundation |Paper 4 Part-II : BCK : Compiler 153

MTP-March ‘21
7. There is a requirement of registration of the following as per Indian Companies Act 2013:
(a) Private Company (b) Public Company
(c) One Person Company (d) All of the above
8. Which of the following is organic objective of business?

(a) Economic Value added (b) Fitness of Human resource
(c) Community Service (d) Effective waste handling and disposal
9. Business as institution is ________
(a) Job Creator (b) Job seeker (c) Both (d) None
MTP-March ’19
10. Mark the Correct:
(a) Hindu Succession Act, 1956 is applicable in HUF.
(b) LLP firm may be constituted on basis of LLP Act 2009.
(c) A dormant company registered under Companies Act, 2013.
(d) All are correct. [MTP-April ‘21]
11. Which of the following statements distinguishes business from entrepreneurship?
(a) Entrepreneurs are the business owners too
(b) All business owners are entrepreneurs too
(c) Entrepreneurs seek out new opportunities and pursue innovative business ideas
(d) (a) and (b) [MTP-April ‘19]
12. Which of the following is NOT an economic objective of the firm? [MTP-April ‘21]
(a) Sales growth (b) Improvement in market share
(c) Profits and return on investment (d) Conservation of natural resources
13. Find out the incorrect:
(a) Economic Activities are drive by nationality.
(b) Economic Activities are guided by self interest.
(c) Non-Economic Activities are driven by emotional or sentimental force.
(d) Non-Economic Activities are not at all important in life. [MTP-April ‘19]
14. The Indian Companies Act, 2013 provides for the registration of:
(a) Private Limited and Public Limited Company
(b) One Person Company and Small Company
(c) Defunct Company (d) All of the above
15. A HUF cannot comprise members of a:
(a) Hindu & Sikh family (b) Parsi family (c) Buddhist family (d) Muslim family
154 Chapter 1 : Business and Commercial Knowledge-An Introduction

16. Under the income tax Act, A HUF cannot earn income from:
(a) House property (b) Salary (c) Profits (d) Other sources
17. Which of the following is an economic activity:
(a) Social interest (b) Social security (c) Selfless concern (d) Self interest
MTP-April ’19
18. The occupation in which people work for others and get remunerated in return is known as:
(a) Business (b) Employment (c) Profession (d) None of these
19. Mark Incorrect:
(a) Business has only one motive; profit
(b) Plurality of the objective is a modern phenomenon
(c ) Objective of survival & growth of business are called organic objectives
(d) In addition to economic motive, it may have non -economic motives like social, ethica l or
environmental.
20. The maximum number of members of a public company is:
(a) 07 (b) 50 (c) No limit (d) 200
MTP-April ’21
21. Marketing, Finance, Operations, Human Behaviour, Law and Policy, Economics, all together derive BCK.
What does it tell us about BCK’s domains?
(a) BCK is Vast (b) BCK is Expanding
(c) BCK is Eclectic (d) BCK is Vague
22. The structure in which there is a separation of ownership and management is called
(a) Sole proprietorship (b) Partnership
(c) Company (d) All business organisations
23. Maximum number of members in a Private limited company are:
(a) 50 (b) 200 (c) 20 (d) 500
24. Mark incorrect: Partnership implies
(a) Contractual ownership of business
(b) Liability of partner is limited to the extent of one’s share capital
(c) The contract is an agreement enforceable at law is called deed
(d) Deed may be registered in India under the Partnership Act, 1932
MTP-March ’21
25. Which of the following is not a domain/characteristic of business and commercial knowledge?
(a) It is Independent (b) It is Ever Expanding
(c) It is Vast (d) It is Multi-Disciplinary

26. Which of the following is not true about a Limited Liability Partnership (LLP)?
(a) Separate Legal Entity
(b) Incorporation not mandatory like normal partnership
(c) Designated Partners
(d) Hybrid Form of Business Organisation
27. Members of a Hindu Undivided Family are called?
(a) Father (b) Karta (c) Coparcener (d) Mitakshara
MTP-March’22
28. Which among the following is an attribute of economic activity?
(a) They are driven by Altruism (b) They are driven by Rationality
(c) They are driven by Sentimental Value Creation
(d) They are driven by Emotional Reasons
29. X-Mart stocks goods from various sellers in its huge store and charges money to advertise/sell specific
products. What can X-Mart be termed as?
(a) Market Share (b) Aids to Trade
(c) Suppliers (d) Intermediary
30. Perpetual succession benefit is enjoyed by?
(a) HUF (b) Company
(c) LLP (d) Both Company and LLP
31. Maximum number of members in a Private limited company are:
(a) 50 (b) 200
(c) 20 (d) 500
32. Which of the following is not true about a Limited Liability Partnership (LLP)?
(a) Separate Legal Entity
(b) Incorporation not mandatory like normal partnership
(c) Designated Partners
(d) Hybrid Form of Business Organisation
34. Which of the following is a not a part of BCK lexicon?
(a) Y2Z (b) B2B
(c) B2C (d) 24*7
MTP-Nov’21
35. Which of the following is not a feature of Private company?
(a) There are no restrictions on transfer of shares
(b) Minimum number of directors are 2
(c) Private companies are exempted from deputing various committees of Board of Directors
(d) It can start business upon incorporation.

36. Human activities distinguishable by presence of the livelihood motives are known as:
(a) Economic activities (b) Non-economic activities
(c) Emotional activities (d) Sentimental activities
37. Nomadic humans bringing their hunt and getting rice in return can be called as?
(a) Non-economic activity (b) Sustainable practice of trade
(c) Social entrepreneurship (d) Economic activity
38. Which of the following is a discipline of medicine and also of BCK?
(a) Economics (b) Laws
(c) Sociology (d) Psychology
39. A company created for a future project and has no significant accounting transaction is called-
(a) Shell company (b) Commercial company
(c) One Person company (d) Dormant company
MTP-Oct’21
41. The structure in which there is a separation of ownership and management is called
(a) Sole proprietorship (b) Partnership
(c) Company (d) All business organisations
ANSWER KEYS
1 (b) 2 (d) 3 (a) 4 (d)
5 (c) 6 (d) 7 (d) 8 (b)
9 (a) 10 (d) 11 (c) 12 (d)
13 (d) 14 (d) 15 (d) 16 (b)
17 (d) 18 (b) 19 (a) 20 (c)
21 (c) 22 (a) 23 (b) 24 (b)
25 (a) 26 (b) 27 (c) 28 (b)
29 (d) 30 (d) 31 (b) 32 (b)
33 (c) 34 (a) 35 (a) 36 (a)
37 (d) 38 (d) 39 (d) 40 (c)
41 (c)

NOTES

Chapter-2
Business Environment
MTP-May ’20
1. Threat is an:
(a) Inherent capacity (b) Strategic disadvantage
(c) Unfavourable condition (d) None of the above
2. Which of the following is not a part of the economic environment?
(a) Market and trade cycles (b) Consumer buying patterns
(c) Strength of consumer spending (d) Interest and exchange rates
3. Which of the following tool is used for proactive and structured thinking in the process of decision
making?
(a) SWOT (b) TOWS (c) PEST (d) PESTLE
4. Relationship between organisation and environment can be described through:
(a) Exchange of information (b) Exchange of resources
(c) Exchange of influence and power (d) All of the above
5. Read the following three statements:
(i) The environment is constantly changing in nature.
(ii) Various environmental constituents exist in isolation and do not interact with each other.
(iii) The environment has a far reaching impact on organizations.
From the combinations given below select an alternative that represents statements that are true:
(a) (i) and (ii). (b) (ii) and (iii) (c) (i) and (iii) (d) (i), (ii) and (iii)
6. Internal Environment includes______ [MTP Oct. ‘19]
(a) Customer (b) Economic (c) Demography (d) Mission & Objectives
MTP-Oct ’19
7. Opportunity is:
(a) Inherent capacity (b) Strategic disadvantage
(c) Favourable condition (d) None of the above
8. Which of the following is not a part of the economic environment?
(a) Market and trade cycles (b) Consumer buying patterns
(c) Strength of consumer spending (d) Interest and exchange rates
9. According to Peter Drucker aim of the business is to _________ and ________.
(a) Create and retain customer (b) Retain customer and create profits
(c) Create and retain consumer (d) Retain consumer and maximise wealth

10. Relationship between organisation and environment can be described through:
(a) Exchange of information (b) Exchange of resources
(c) Exchange of influence and power (d) All of the above
11. What is not a characteristic of business environment?
(a) Complex (b) Static (c) Multi-faced (d) Far reaching
MTP-March ’19
12. PESTLE refers to: [MTP April ‘19, April ‘21]
(a) Political, Economic, Social, Technological, Legal & Environmental factors affecting business.
(b) All these are external factors.
(c) All these constitute macro environment.
(d) All of the above.
13. Business and technology are: [MTP April ‘19, April ‘21]
(a) Interrelated (b) Interdependent
(c) Interrelated & Interdependent (d) None of the above
14. Mark incorrect: Partnership implies
(a) Contractual ownership of business
(b) Liability of partner is limited to the extent of one’s share capital
(c) The contract is an agreement enforceable at law is called deed
(d) Deed may be registered in India under the Partnership Act, 1932
15. SWOT refers to: [MTP April ‘19]
(a) Strength, Worry, Option, Threat (b) Strength, Weakness, Opportunity, Threat
(c) Strong, Weak, Option, Threat (d) Strong, Weakness, Opportunity, Think
16. The businesses should continuously ________ and _________ to the environment if it is to service and
prosper.
(a) Identify, appraise (b) Monitor, adapt [MTP March ‘21]
(c) Identify, monitor (d) Monitor, appraise
17. The term PESTLE analysis is used to describe a framework for analyzing: [MTP April ‘21]
(a) Macro Environment (b) Micro Environment
(c) Both Macro and Micro Environment (d) None of above
18. The price sensitivity of the market is an important factor of which element of Micro environment:
(a) Suppliers (b) Market (c) Intermediaries (d) Customer
19. Which of the following constitute Demographic Environment?
(a) Nature of economy i.e. capitalism, socialism, Mixed
(b) Size, c omposition, distribution of population, sex ratio
(c) Foreign t rade policy of Government
(d) Economic policy i.e. fiscal and monetary policy of Government
160 Chapter 2 : Business Environment

[MTP-April ’19]
20. What is the single word that can best describe today’s business?
(a) Technology (b) Change (c) Persistence (d) Profit making
[MTP-April ’21]
21. Gain for one is a loss for someone else - this concept can be understood by which of the characteristics
of Business Environment?
(a) It is Dynamic (b) It has far reaching impact
(c) It is multi-faceted (d) It is complex
22. Which of the following is not an example of socio-cultural environment?
(a) Role of women in society (b) Rising income
(c) Family structure (d) Educational levels
23. Environmental analysis helps in:
(a) Providing input for strategic decision making
(b) Turning threats to firm’s advantage
(c) Anticipate opportunities and to take optimal responses
[MTP-March ’21]
24. Which of the following is least appropriate for business environment?

(a) It is Dynamic (b) It is Multi-faceted
(c) It is rigid (d) It is complex
25. Business environment is important to understand for the following reasons, except?
(a) Gives direction for growth (b) Determines opportunities and threats
(c) Continuous learning (d) Overlooking Competition
26. Which of the following is not part of internal environment of a business organisation?
(a) Labor Unions (b) Corporate Culture
(c) Customers (d) Organisational Structure
27. The performance of business in the private sector is measured by:
(a) Profitability (b) Customer Satisfaction
(c) No of employees (d) The salary of Managing Director
28. Which of the following statements is true?
(a) Consumer and Customer are always the same person
(b) Customer may or may not be the consumer
(c) Environmental study is optional for any business
(d) Micro Environment is a part of Internal Environment
29. Intermediaries exert a considerable influence on the business organisation. This statement is true for?
(a) Micro Environment (b) Macro Environment
(c) Internal Environment (d) Economic Environment

MTP-March’22
30. Environment scanning only helps to get a sense of market landscape. Basis this statement select the
correct option.
(a) False, as it helps in overall strategic decisions
(b) True, as it only identifies opportunities and threats
(c) False, as it is only for internal analysis of an organisation
(d) True, as it identifies competitors
32. Which of the following is not part of internal environment of a business organisation?
(a) Labor Unions (b) Corporate Culture
(c) Customers (d) Organisational Structure
34. The corporate pressure to increase and improve diversity in the country’s workforce is an area of study
for the consumer businesses affecting which element of the environment?
(a) Demographic Environment (b) Political-Legal Environment
(c) Socio-cultural Environment (d) Cultural Environment
MTP-Nov’21
35. A strategic response where businesses are very passive in their behaviour is called as-
(a) Least resistance (b) Proceed with caution
(c) Dynamic response (d) Strategic action
36. Insufficient capital for Research and Development is?
(a) Strength (b) Threat
(c) Weakness (d) Opportunity
37. The event of conducting commonwealth games in India is an example of the following element of
macro environment:
(a) Political-legal environment (b) Socio-cultural environment
(c) Technological environment (d) Global environment
38. An effective organizational strategy includes which of the following activities?
(a) Capitalizes on the opportunities through the use of threats
(b) Neutralizes the threats by minimizing the impact of weaknesses
(c) Neutralizes the opportunities by minimizing the impact of weaknesses
(d) Capitalizes on the weaknesses through the use of threats

39. “Once a company knows what is happening around it, it can plan and strategies accordingly”, this is part
of which of the following importance’s of business environment?
(a) Giving direction for growth (b) Determining opportunities and threat
(c) Image building (d) Continuous learning
40. Which of the following elected by shareholders in organization?
(a) Owners (b) Board of Directors
(c) Employees (d) Directors
41. Which of the following is incorrect?
(a) Events lead to trends (b) Trends lead to events
(c) Issues raise expectations (d) Expectations are opportunities
MTP-Oct’21
43. Which of the following is not an example of socio-cultural environment?
(a) Role of women in society (b) Rising income
(c) Family structure (d) Educational levels
45. The term PESTLE analysis is used to describe a framework for analyzing:
(a) Macro Environment (b) Micro Environment
(c) Both Macro and Micro Environment (d) None of above
46. PESTLE refers to:
(a) Political, Economic, Social, Technological, Legal & Environmental factors affecting business.
(b) All these are external factors.
(c) All these constitute macro environment.
(d) All of the above.
47. Business and technology are:
(a) Interrelated (b) Interdependent
(c) Interrelated & Interdependent (d) None of the above

ANSWER KEYS
1 (c) 2 (b) 3 (d) 4 (d)

5 (c) 6 (d) 7 (c) 8 (b)
9 (a) 10 (d) 11 (b) 12 (d)
13 (c) 14 (b) 15 (b) 16 (b)
17 (a) 18 (b) 19 (b) 20 (b)
21 (c) 22 (b) 23 (d) 24 (c)
25 (d) 26 (c) 27 (b) 28 (b)
29 (a) 30 (a) 31 (d) 32 (c)
33 (c) 34 (a) 35 (a) 36 (c)
37 (d) 38 (b) 39 (a) 40 (b)
41 (b) 42 (c) 43 (b) 44 (d)
45. (a) 46 (d) 47 (c)

Chapter-3
Business Organizations
[MTP-May ’20]
1. When did Microsoft begins its business in India?
(a) 1990 (b) 1991 (c) 1995 (d) 1989
2. Indane LPG is the product of which corporation of India? [MTP March ‘19, April ‘21]
(a) IOCL (b) NTPC (c) ONGC (d) PGCIL
3. Which bank provides the digital service PayZapp?
(a) Axis Bank Limited (b) HDFC Bank Limited
(c) ICICI Bank Limited (d) State Bank of India
4. Jayesh Merchant is the CFO of which company? [MTP April ‘19]
(a) Asian Paints Ltd. (b) Ambuja Cements Ltd.
(c) Ultratech Cements Ltd. (d) Mahindra & Mahindra
5. NESTLE is a beverage partner with which of the following companies? [MTP Oct ‘19]
(a) Coca-Cola India (b) Pepsico India Holdings Pvt. Ltd.
(c) Red Bull India Pvt. Ltd (d) Dabur India Ltd
6. The mission of which transnational company is ‘Good Food, Good Life’?
(a) Tata Group (b) Reliance fresh (c) Nestle (d) Starbucks
7. Who is the present chairman of Bajaj Auto Ltd.?
(a) Mr. Rahul Bajaj (b) Mr. Rajiv Bajaj (c) Jamnalal Bajaj (d) Kevin P D’sa
[MTP-Oct ’19]
8. Which gas company owns India’s largest pipeline network?

(a) GAIL (India) Ltd. (b) Bharat Petroleum Corporation Ltd.
(c) Reliance Industries Ltd. (d) ONGC
9. Which of the following is not related to ITC Limited?
(a) Vishal Sikha (b) 1910
(c) Kolkata (d) Yogesh Chander Deveshwar
10. What happened in Microsoft in the year 2014?

(a) Satya Nadella succeeded on Steve Ballmer
(b) Acquired Hardware division of NOKIA
(c) Both (a) & (b)

11. Who is the present MD & CEO of ICICI Bank?
(a) Chanda Kochar (b) Shika Sharma
(c) M.K. Sharma (d) Sandeep Bakshi
12. Where are the headquarters of L&T?
(a) Bengaluru (b) Delhi (c) Mumbai (d) Chennai
13. Which of the following is not a subsidiary of Indian Oil Corporation Ltd.?
(a) Chennai Petroleum Ltd. (b) Brahamputra Cracker and Polymer Ltd.
(c) Indian Oil – CREDA Biofuels Ltd. (d) Indian Catalyst Private Ltd.
[MTP-March ’19]
14. Which pharmaceutical company has the slogan ‘caring for life’? [MTP April ‘19]
(a) Dr. Reddy’s (b) Lupin Ltd. (c) Cipla Ltd.
(d) Sun Pharmaceutical Industries Ltd.
15. Who is the present CFO of Adani Ports and Special Economic Zone Limited?
(a) B Ravi (b) Deepak Maheshwari
(c) Anand D. Lal (d) Jayesh Merchant
16. Which one of the following is NOT a FMCG company? [MTP April ‘19]
(a) ITC (b) Dabour (c) HUL (d) Maruti
[MTP-April ’19]
17. Where are the headquarters of Walmart?

(a) Arkansas, US (b) California, US (c) New York, US
18. Match the following:
Companies Product
Microsoft Coffee
Bajaj Windows
Nestle Activa
Jio Mobile phone service
(a) Microsoft-Activa, Bajaj-Windows, Nestle-Coffee, Jio-Mobile phone service
(b) Microsoft-Windows, Bajaj-Activa, Nestle-Coffee, Jio-Mobile phone service
(c) Microsoft-Coffee, Bajaj-Windows, Nestle-Activa, Jio-Mobile phone service
(d) Microsoft-Windows, Bajaj-Coffee, Nestle-Activa, Jio-Mobile phone service
19. Who was the co-founder of Microsoft with Bill Gates?
(a) Paul Allen (b) Melinda Gates (c) Satya Nadella (d) Lucci Hood
[MTP-April ’21]
20. Bank of Madura was acquired by which of these?

(a) ICICI Bank Ltd (b) State Bank of India
(c) Life Insurance Corporation of India (LIC) (d) HDFC Bank Ltd
21. Which of the following is founded by two Danish Engineers taking refuge in India?
(a) Cipla Ltd (b) L&T Ltd (c) Flipkart (d) NTPC Ltd
166 Chapter 3 : Business Organizations

22. Which one of the following is not a foreign company?
(a) Dr. Reddy’s Laboratories Ltd. (b) Walmart
(c) Nestle (d) HP
23. Who is the present CEO and MD of Larsen & Toubro Ltd.?
(a) Keshab Pandey (b) K R Krishanmurthy
(c) S N Subrahmanyan (d) None of these
24. Which company ranked 2rd on Forbes World’s Best Employer’s List 2020?
(a) Amazon (b) Walmart (c) Microsoft (d) Apple
25. Who is the present chairman of Wipro Limited? [MTP March ‘21]
(a) Azim Premji (b) Rishad Premji
(c) Thierry Delaporte (d) (a) and (b)
[MTP-March ’21]
26. Where is India’s largest SEZ?

(a) Hazira (b) Dhamra (c) Tehri (d) Mundra
27. Who is Axis Bank’s Chief Financial Officer?
(a) Jairam Sridharan (b) Nikhil Asopa
(c) Narayan Swaminathan (d) Rakesh Makhija
28. Ministry of Petroleum and Natural Gas owns which of the following?
(a) Indian Oil Corporation Ltd. (b) GAIL Ltd.
(c) Bharat Petroleum (d) Reliance Industries Ltd.
29. Who was the founder of Walmart?
(a) Sam Walton (b) Bret Biggs (c) Greg Penner (d) Luca Maestri
30. “To empower every person and every organization on the planet to achieve more” is the mission
statement of?
(a) Bharti Airtel (b) Amazon (c) Microsoft (d) HDFC Bank
MTP-March’22
31. Which limited company has businesses in Hotels, FMCG and Information Technology?
(a) Wipro Ltd. (b) ITC Ltd.
(c) Bajaj Ltd. (d) Infosys Ltd.
32. Identify the Swiss transnational food and drink company?
(a) Larsen & Toubro (b) Walmart
(c) Nestle (d) Unilever
(c) Nestle (d) HP
34. Ministry of Petroleum and Natural Gas owns which of the following?
(a) Indian Oil Corporation Ltd. (b) GAIL Ltd.

(c) Bharat Petroleum (d) Reliance Industries Ltd.
MTP-Nov’21
36. ‘Hunger to win customers for life’ is the mission of which of the following company?
(a) Adani Ports and Special Economic Zones Limited
(b) Asian Paints
(c) Bharti Airtel Limited (d) Cipla Limited
37. Flipkart has its registered office at-
(a) New Delhi (b) Hyderabad
(c) Singapore (d) Mauritius
38. Which of the company in India to have equity stake in 1st Greenfield Airport at Cochi, India?
(a) Adani Ports SEZ Ltd. (b) Bharat Petroleum Corporation Ltd.
(c) Tata Sons Pvt. Ltd. (d) Larsen & Toubro Ltd.
39. Which of the following is not a subsidiary of NTPC Limited?
(a) Kanti Bijlee Utpadan Nigam Ltd (b) Bharatiya Rail Bijlee Company Limited
(c) Patratu Vidyut Utpadan Nigam Limited (d) Powerlink Transmission Limited
MTP-Oct’21

41. Which of the following is founded by two Danish Engineers taking refuge in India?
(a) Cipla Ltd (b) L&T Ltd
(c) Flipkart (d) NTPC Ltd
(c) Nestle (d) HP
43. Indane LPG is the product of which corporation in India?
(a) IOCL (b) NTPC
(c) ONGC (d) PGCIL
44. Who is the present CEO and MD of Larsen & Toubro Ltd.?
(a) Keshab Pandey (b) K R Krishanmurthy
(c) S N Subrahmanyan (d) None of these
45. Which limited company has businesses in Hotels, FMCG and Information Technology?
(a) Wipro Ltd. (b) HUL Ltd.
(c) Infosys Ltd. (d) ITC Ltd.

46. Who is the present chairman of Wipro Limited?
(a) Azim Premji (b) Rishad Premji
(c) Thierry Delaporte (d) (a) and (b)
ANSWER KEYS
1 (a) 2 (a) 3 (b) 4 (a)

5 (a) 6 (c) 7 (a) 8 (a)
9 (a) 10 (c) 11 (d) 12 (c)
13 (b) 14 (c) 15 (b) 16 (d)
17 (a) 18 (b) 19 (b) 20 (a)
21 (b) 22 (a) 23 (c) 24 (a)
25 (b) 26 (d) 27 (a) 28 (b)
29 (a) 30 (c) 31 (b) 32 (c)
33 (a) 34 (b) 35 (a) 36 (c)
37 (c) 38 (b) 39 (d) 40 (a)
41 (b) 42 (a) 43 (a) 44 (c)
45 (d) 46 (b)

NOTES

Chapter-4
Government Policies for Business Growth
[MTP-May ’20]
1. In which of the following sector(s), FDI is prohibited at both routes?
(a) Nidhi Company (b) Media (c) Real Estate (d) Shell Company
2. Selling a portion of ownership in a public enterprise to private parties is called as which of the following?
(a) Delegation (b) Divestment (c) Displacement (d) Disinvestment
3. FIPB stands for:
(a) Foreign Institutional Promotion Board
(b) Foreign Institutional Preparatory Board
(c) Foreign Investment Priority Board
(d) Foreign Investment Promotion Board
4. Simplification of trade restrictions related to import is an example of:
(a) Globalization (b) Privatization (c) Disinvestment (d) Aggregation
[MTP-March ’19]
5. Identify the one which may be considered as a public policy:
(a) A decision by a central government to purchase a fleet of cars.
(b) An old building to be demolished by a municipal corporation.
(c) All citizens are to be provided with biometric Aadhar card.
(d) Government passes a special resolution to change the name of a park. [MTP-April ’21]
6. Mark incorrect as Globalization refers to:
(a) Encouraging regional economic cooperation.
(b) Integrating the world into one economic global village.
(c) It pares the way for higher factor mobility.
(d) Drawing countries out of their insulation. [MTP-April ’19]
7. Identify the sector where, FDI is NOT permitted:
(a) Automobile (b) Infrastructure (c) Textile (d) Atomic energy
[MTP-April ’19]
8. In case of Maruti –Suzuki, the Union Government surrendered partial ownership and sold the majority
stake to Suzuki of Japan in course of time. T his is a case of:
(a) Partial Disinv estment (b) Displacement
(c) Delegation (d) Divestment

9. Mark the Incorrect statement:
(a) FDI is made with an intention of exercising control over an enterprise .
(b) FDI is called Portfolio Investment.
(c ) FDI is a long run Investment.
(d) FDI helps in upgradation of technology.
[MTP-April ’21]
10. Policy Context has a core motive behind it, which is?
(a) Economic Welfare (b) GDP Growth
(c) Holistic Development (d) Social Welfare
11. Policy Formulation process is?
(a) Uni-Directional (b) Bi-Directional (c) Multi-Directional
(d) Single Point of Contact Oriented
12. Privatization may not be of conceptualized in form of:
(a) Divestment (b) Disinvestment (c) Dedication (d) Displacement
13. Economic Reforms introduced in India in 1992 are called LPG that refers to
(a) Liquidation of loss making units
(b) Popularise Public private partnership
(c) Good governance
14. Government decides to spend 400 crores in the next 5 years for the benefit of women entrepreneurs in
India. This is an example of?
(a) Fiscal Policy (b) Monetary Policy
(c) FDI Policy (d) Industrial Policy
15. Which of the following statements about RBI is incorrect?
(a) It deals largely with Governments, Central and State Banks.
(b) Its role is to ensure monetary stability, including stability of domestic price levels.
(c) One of its missions is to protect the interest of policyholders.
(d) The RBI is the sole authority for the issue of currency in India.
[MTP-March ’21]
16. Indigo, Spice Jet and Vistara, operating in Indian aviation, are a result of?
(a) Privatisation (b) Liberalisation
(c) Globalisation (d) Foriegn Direct Investment
17. Foreign Exchange Management Act (FEMA), would fall under which of the following type of Public
Policy?
(a) Restrictive (b) Regulatory
(c) Facilitating (d) Advisory
18. Foreign brands were welcomed in India and were also allowed to use their foreign brand name. Which
of the following does use of foreign brand name relate to?
(a) Globalisation (b) Privatisation
(c) Liberalisation (d) Autonomy of Economy
172 Chapter 4 : Government Policies for Business Growth

19. Goods and Service Tax (GST), is a form of?
(a) International Trade Policy (b) Inclusive Policy
(c) Policy Reform (d) Public Welfare Scheme
MTP-March’22
20. For a business, Inflation as an indicator of policy shall be most detrimental if?
(a) It is Extremely Low (b) It is Extremely high
(c) It is Moderate (d) It is Rising
(a) Divestment (b) Disinvestment
(c) Dedication (d) Displacement
22. `Foreign brands were welcomed in India and were also allowed to use their foreign brand name. Which
of the following does use of foreign brand name relate to?
(a) Globalisation (b) Privatisation
(c) Liberalisation (d) Autonomy of Economy
24. Specified areas where government supports business to enhance development and increase
employment are called?
(a) SEZ - Specified Economic Zone (b) DTA - Domestic Tariff Area
(c) SEZ - Special Economic Zone (d) FTWZ - Free Trade and Warehousing Zone
25. Goods and Service Tax (GST), is a form of?
(a) International Trade Policy (b) Inclusive Policy
(c) Policy Reform (d) Public Welfare Scheme
MTP-Nov’21
26. Where is the India’s only port-led multi-product SEZ?

(a) Kochi (b) Mumbai
(c) Surat (d) Mundra
27. Which of the following is one of the most significant macro policy indicators that impact business?
(a) Trade policy (b) International trade
(c) Tax rates (d) Rural policy
28. Atmanirbhar Bharat is a competition for Global companies in India, this defines which characteristic of
the business environment?
(a) Far-reaching impact (b) Complex
(c) Multi-faceted (d) Dynamic
29. FDI is prohibited in which of the following sectors?
(a) Retail (b) E-Commerce
(c) Education (d) Chit Fund

30. Prohibition of crackers in Delhi by the state government is a type of?
(a) Protective (b) Regulatory
(c) Restrictive (d) Facilitating
31. Which of the following is an example of facilitating policy?
(a) Companies act 2013 (b) Income tax policy
(c) Monetary policy (d) Micro-small-medium enterprises
32. Type of privatization, where Government keeps hold of responsibility and private enterprise handles
fully or partly the delivery of product and services though contract franchise, grant, etc., is known as:
(a) Investment (b) Disinvestment
(c) Displacement (d) Delegation
33. Singapore government gave the business option to either take cheap loans or to take subsidies on
exporting. What kind of public policy is this?
(a) Protective (b) Facilitating
(c) Regulatory (d) Restrictive
34. Which of the following is not a source of infusion of foreign funds in India?
(a) Listing of a company in NSE through IPO (b) Non-Resident Indians
(c) Foreign Institutional Investors (d) Overseas Citizens of India
MTP-Oct’21
36. Policy Formulation process is?
(a) Uni-Directional (b) Bi-Directional
(c) Multi-Directional (d) Single Point of Contact Oriented
(a) Divestment (b) Disinvestment
(c) Dedication (d) Displacement
38. Simplification of trade restrictions related to import is an example of:
(a) Globalization (b) Privatization
(c) Disinvestment (d) Aggregation
39. Economic Reforms introduced in India in 1992 are called LPG that refers to
(a) Liquidation of loss-making units (b) Popularise Public private partnership
(c) Good governance (d) None of the above
40. Identify the one which may be considered as a public policy:
(a) A decision by a central government to purchase a fleet of cars.
(b) An old building to be demolished by a municipal corporation.
(c) All citizens are to be provided with biometric Aadhar card.
(d) Government passes a special resolution to change the name of a park.

41. Government decides to spend 400 crores in the next 5 years for the benefit of women entrepreneurs in
India. This is an example of?
(a) Fiscal Policy (b) Monetary Policy
(c) FDI Policy (d) Industrial Policy
ANSWER KEYS
1. (a) 2. (d) 3. (d) 4. (a)

5. (c) 6. (a) 7. (d) 8. (d)
9. (b) 10. (c) 11. (b) 12. (c)
13. (d) 14. (a) 15. (c) 16. (a)
17. (b) 18. (c) 19. (c) 20. (a)
21. (c) 22. (c) 23. (c) 24. (c)
25. (c) 26. (d) 27. (c) 28. (c)
29. (d) 30. (c) 31. (d) 32. (d)
33. (b) 34. (a) 35. (c) 36. (b)
37. (c) 38. (a) 39. (d)
40. (c) 41. (a)

NOTES

Chapter-5
Organizations Facilitating Business
[MTP-May ’20]
1. Which one of the following is not the role of the Competition Commission of India?
(a) To promote practices having adverse effect on competition.
(b) To promote and sustain competition in markets.
(c) To protect the interests of consumers and,
(d) To ensure freedom of trade carried on by other participants in markets in India.
2. A reduction of 35 basis point will be equal to how much of the following?
(a) 3.50% (b) 0.35% (c) 35% (d) 0.035%
3. Which of the following acts as an indicator of bank’s liquidity and solvency position?
(a) SLR (b) CRR (c) Repo rate (d) Reserve Repo rate
4. The RBI has been vested with extensive power to control and supervise commercial banking system
under the-
(a) Reserve Bank of India Act, 1934 (b) The Banking Regulation Act, 1949
(c) Both (a) and (b) (d) The Companies Act, 2013
5. SEBI, RBI & IRDA are: [MTP-Oct ’19]
(a) Regulatory Bodies (b) Cluster Bodies (c) Goal Sector bodies (d) None
[MTP-Oct ’19]
6. Which of the following is not a function of RBI? [MTP-April ’19, May ‘20]
(a) Monetary Policy (b) Fiscal Policy
(c) Custodian of Foreign Exchange Reserves (d) Controller of Credit
7. Which one of the following is not the role of the Competition Commission of India?
(a) To promote practices having adverse effect on competition.
(b) To promote and sustain competition in markets.
(c) To protect the interests of consumers and,
(d) To ensure freedom of trade carried on by other participants in markets in India.
8. Who is the custodian of the nation’s foreign exchange reserves?
(a) Central Government of India (b) President of India
(c) Reserve Bank of India (d) State Bank of India
9. Where is the head office of NABARD? [MTP-April ’19]
(a) Mumbai (b) Delhi (c) Gurugram (d) Benlgaluru
10. Which one of the following is an Indian Regulatory Body that facilitates business organizations?
(a) EXIM Bank (b) NABARD (c) IRDA (d) IFCI
[MTP-April ’19, March ‘21, May ‘20]

under the- [MTP-March ’19, April ‘21]
[MTP-March ’19]
12. Who was the regulatory body for controlling financial affairs in India before SEBI?
(a) Controller of Capital Issues (b) Reserve Bank of India
(c) Insurance Regulatory and Development Authority of India
(d) Government of India [MTP-April ’19, May ‘20, April ‘21]
13. How many members of SEBI should be from RBI?
(a) 4 (b) 3 (c) 1 (d) 2
14. Economic Reforms introduced in India in 1992 are called LPG, that refers to
(a) Liquidation of loss making units (b) Popularise Public private partnership
(c) Good governance (d) None of the above
15. Which of the following is NOTa function of RBI?
(a) Monopoly of Note issue (b) Banker to the Government
(c) Advancing loan to large business houses
(d) Controller of Credit [MTP-April ’19]
16. Where can the first appeal against SEBI be made?
(a) High Court (b) Supreme Court
(c) Securities Appellate Tribunal (d) RBI
[MTP-April ’19]
17. When was IRDAI constituted?
(a) 1997 (b) 1998 (c) 1999 (d) 2000
[MTP-April ’21]
18. Which of the following is not a function of RBI?
(a) Promotion of Banking (b) Collection of Foreign Institutional Data
(c) Banker to Government (d) Funding NABARD
19. Free and fair competition ensures all, except?
(a) Punishing the laggards (b) Boosts fixed choice preferences of customers
(c) Increases Efficiency (d) Encourages Innovation
20. Which one of the following is not a SEBI function as one body?
(a) Quasi-legislative (b) Quasi-judicial
(c) Quasi-fiscal (d) Quasi-executive
21. Self Help Groups are catered specifically by?
(a) All development banks (b) SIDBI (c) RBI
(d) NABARD
[MTP-March ’21]
22. Which of the following is Government’s initiative for furthering and facilitating businesses in India?
(a) Good and Service Tax (b) Make in India
(c) Skill India (d) Beti Bachao Beti Padhao
178 Chapter 5 : Organizations Facilitating Business

23. Which of the following is not a Funding Institution?
(a) World Bank (b) NABARD
(c) Reserve Bank of India (d) International Monetary Fund
24. All scheduled banks are required to maintain a certain minimum cash reserve ratio with the RBI. This
provision enables RBI to ensure what?
(a) Forex Rate Fluctuation (b) Credit Position of the Country
(c) Savings of People (d) Collect Public Data of Money held by People
25. Under which section of IRDAI Act can IRDAI function and impart its duties?
(a) Section 11 of IRDAI Act, 1999 (b) Section 21 of IRDAI Act, 1999
(c) Section 19 of IRDAI Act, 1999 (d) Section 14 of IRDAI Act, 1999
26. Which of the following does SEBI not cater to?
(a) Government Organizations (b) Investors
(c) Intermediaries (d) Security Issuing Companies
27. Current Reverse Repo Rate is 2.5%. The difference between repo and reverse repo shall be 250 basis
points. RBI increases reverse repo by 150 basis points. What is the new Repo Rat?
(a) 6% (b) 6.5% (c) 7% (d) 7.5%
MTP-March’22
28. MRTP Act,1969 was replaced by?

(a) Companies Act, 2013 (b) SEBI Act, 1992
(c) Competition Act, 2002 (d) IRDA Act, 1999
29. RBI, SEBI, IRDAI are part of which type of government policy?
(a) Restrictive Policy (b) Regulatory Policy
(c) Protective Policy (d) Facilitative Policy
30. NABARD ’s refinancing is available to all the below except which of the following?
(a) State cooperative banks (b) Regional rural banks
(c) Commercial banks (d) Private sector banks
32. Under which section of IRDAI Act can IRDAI function and impart its duties?
(a) Section 11 of IRDAI Act, 1999 (b) Section 21 of IRDAI Act, 1999
(c) Section 19 of IRDAI Act, 1999 (d) Section 14 of IRDAI Act, 1999
34. Which of the following does SEBI not cater to?
(a) Government Organizations (b) Investors
(c) Intermediaries (d) Security Issuing Companies

35. In the first four decades post independence, for fuelling of Industrial development, special purpose
financial institutions were created. These institutions were called
(a) Commercial Banks (b) Development Banks
(c) Regional Rural Banks (d) Small Finance Banks
MTP-Nov’21
36. RBI’s role does not include-

(a) Friend, Philosopher and Guide to Government
(b) Maintain legal stability
(c) Regulate inflation
(d) Guide all commercial banks
37. Who from the following helps a budding business to quickly launch a product and put it in the first lane
of commercial success?
(a) Business incubator (b) Freight forward
(c) Business accelerator (d) Merchandiser
38. Financial analysts are also called among which of the following?
(a) Management consultants (b) Mutual fund analysts
(c) Financial guru (d) Security analysts
39. MRTP Act, 1969 stands repealed with the repealed with the enforcement of the following Act:
(a) Foreign Exchange Regulation Act, 1973 (b) Foreign Exchange Management Act, 1999
(c) Competition Act, 2002 (d) IRDAI Act, 1999
40. Monetary policy of the government is affected with support from?
(a) RBI (b) IRDAI
(c) SEBI (d) NABARD
41. Tariff Advisory Committee is a part of?
(a) RBI (b) IRDAI
(c) SEBI (d) CCI
42. Which authority regulates and develops the Indian capital market and protects the interest of investors
in the capital market?
(a) National stock exchange (NSE) (b) SEBI
(c) RBI (d) Bombay stock exchange
MTP-Oct’21

44. Free and fair competition ensures all, except?
(a) Punishing the laggards
(b) Boosts fixed choice preferences of customers
(c) Increases Efficiency (d) Encourages Innovation

under the-
47. Which of the following statements about RBI is incorrect?
(a) It deals largely with Governments, Central and State Banks.
(b) Its role is to ensure monetary stability, including stability of domestic price levels.
(c) One of its missions is to protect the interest of policyholders.
(d) The RBI is the sole authority for the issue of currency in India.
48. Who was the regulatory body for controlling financial affairs in India before SEBI?
(a) Controller of Capital Issues (b) Reserve Bank of India
(c) Insurance Regulatory and Development Authority of India
(d) Government of India
49. Self Help Groups are catered specifically by?
(a) All development banks (b) SIDBI
(c) RBI (d) NABARD
ANSWER KEYS
1. (a) 2. (b) 3. (a) 4. (c)
5. (a) 6. (b) 7. (a) 8. (c)
9. (a) 10. (c) 11. (c) 12. (a)
13. (c) 14. (b) 15. (c) 16. (c)
17. (c) 18. (b) 19. (b) 20. (c)
21. (d) 22. (b) 23. (c) 24. (b)
25. (d) 26. (a) 27. (b) 28 (c)
29 (b) 30 (d) 31 (c) 32 (d)
33 (b) 34 (a) 35 (b) 36 (b)
37 (c) 38 (d) 39 (c) 40 (a)
41 (b) 42 (b) 43 (b) 44 (b)
45 (c) 46 (c) 47 (c) 48 (a)
49 (d)
NOTES

Chapter-6
Common Business Terminologies
[MTP-May ’20]
1. A very large loan extended by a group of small banks to a single corporate borrower is called as which
of the following?
(a) Time Deposit (b) Long term loan (c) Annuities (d) Syndicated loan
2. The lowest price at which an owner is willing to sell his securities is called as which of the following?
(a) Book Value (b) Ask (c) Annuity (d) Bond
3. A series of payments of an equal amount at fixed intervals for a specified number of periods is called
as which of the following?
(a) Amortize (b) Annuity due (c) Annuity (d) Arbitrage
4. A combination of several companies working together for a particular purpose is called as which of the
following?
(a) Competitive advantage (b) Cross-selling
(c) Consortium (d) Conglomerate Diversification
5. A stock that provides constant dividends and stable earnings even in the period of economic slowdown
is called as which of the following?
(a) Debtors (b) Defensive stock (c) Bonus (d) Debentures
6. An amount of revenue from sale which exactly equals the amount of expense is called as which of the
following?
(a) Book value (b) Basket trading (c) Break-even point (d) Budget
7. A Bull market is:
(a) Stock price are decreasing consistently (b) Stock price are increasing consistently
(c) Stock price are stable consistently (d) Stock price are wildly fluctuating
[MTP-Oct ’19]
8. ____________ is a technology where the banking organizations resort to the use of electronics, computers
and other networks to execute transactions and transfer funds.
(a) E-cash (b) Digi-cash (c) Hedge (d) Cap
9. The number of units of given currency that can be purchased for one unit of another currency is called
_______.
(a) Current ratio (b) Exchange rate (c) Equity (d) Dividend
10. Carry forward of a transaction from one settlement period to other is
(a) Badla (b) Repo (c) Open Interest (d) None
11. The opposite of bid is________
(a) Ask/Offer (b) Call (c) Purchase (d) None

12. Which of the following is Return on investment?
(a) Dividend (b) Interest (c) Yield (d) None
13. What is price sensitivity?
(a) the effect a change in price will have on customers.
(b) charging a relatively high price for a short time where a new, innovative, or much-improved
product is launched onto a market.
(c) a strategy involves setting low prices in order to discourage or deter potential new entrants to the
suppliers market.
(d) It measures the responsiveness of a change in demand for a product following a change in its own
price.
[MTP-March ’19]
14. What is consolidation?
(a) It is an expense that is supposed to reflect the loss in value of a fixed asset.
(b) combination of two or more entities that occurs when the entities transfer all their net assets to
a new entity created for that purpose.
(c) Potential liability arising from a past transaction or a subsequent event.
(d) Costs that can be attributed clearly to the activity you are considering.
15. A portion of the after-tax profits paid out to the owners of a business as a return on their investment is:
(a) Dividend (b) Expense (c) Expenditure (d) Deferred income
16. Setting low prices in order to discourage or deter potential new entrants to the suppliers market:
(a) Pre-Emptive Pricing (b) Price Sensitivity (c) Price Discrimination (d) Price Elasticity
(a) Arbitrage is simultaneous purchase and sale of a commodity.
(b) Current assets are those which can be turned into cash within a year.
(c) Intangible assets are those which do not have physical form. They are in the form of rights.
(d) Break-even point is also called an optimum point of a firm.
18. Which one is not correct about Bank rate?
(a) It is a quantitative measure. (b) It differs from repo rate.
(c) It is also known as discount rate.
(d) It influences credit availability to particular sector.
19. ______ is a strategy that is used to minimize the risk of a particular investment and maximize the
returns of an investment.
(a) Cap (b) Encryption (c) Hedge (d) Term insurance
[MTP-April ’19]
20. ‘Personal selling’ is done through:
(a) Written communication (b) Oral communication
(c) TV and media (d) Sign language
184 Chapter 6 : Common Business Terminologies

21. Marketing mix includes 4 Ps and 4Cs. Match the following and prepare the proper combinations:
4 P’s 4 C’s
Product Convenience
Price Communication
Promotion Cost
Place Customers’ satisfaction
(a) Product-Communication, Price-Cost, Promotion- Customers’ satisfaction, Place-Convenience
(b) Product-Customer’s satisfaction, Price-Cost, Promotion- Convenience, Place- Communication
(c) Product- Convenience, Price-Cost, Promotion-Communication, Place- Customer’s satisfaction
(d) Product-Customer’s satisfaction, Price-Cost, Promotion-Communication, Place-Convenience
(a) Arbitrage is simultaneous purchase and sale of a commodity.
(b) Current assets are those which can be turned into cash within a year.
(c ) Intangible assets are those which do not have physical form. T hey are in the form of rights.
(d) Break-even point is also called an optimum point of a firm.
23. When two or more companies come together to expand their business operations in a newly created
entity.
(a) Joint venture (b) Acquisition (c) Partnership (d) Merger
[MTP-April ’21]
24. Highest Price the buyer is willing to pay is called?
(a) Bid (b) Ask (c) Badla (d) Beta
25. Security whose price is derived from another underlying asset is called?
(a) Derivative (b) Options (c) Forwards (d) Futures
26. ADR stands for:
(a) American Deficit Record (b) American Depository Receipt
(c) Asset Depreciation Record (d) Asset Depository Receipt
[MTP-March ’21]
27. People occupy different job positions and deliver their respective responsibilities to meet the
organization’s administrative role. Which facet of business is concerned with above statement?
(a) Administrative Facet (b) HR Facet
(c) Technical Facet (d) Financial Facet
28. A stock market where number of transactions are very low and thus, the volatility in the market is
huge, is called?
(a) Thin Market (b) Slow Market (c) Lazy Market (d) Weak Market
29. ‘Personal selling’ is done through:
(a) Written communication (b) Oral communication
(c) TV and media (d) Sign language
30. A company is said to undergo ______ when its assets are sold off piecemeal rather than one single
operating entity?
(a) Acquisition (b) Merger (c) Liquidation (d) Sale off

31. ___________ is the measure of return on investments in terms of percentage.
(a) Yield (b) Index (c) Equity (d) Bonus
32. Token money paid in the early stages of Negotiation is called?
(a) Early Money Deposit (b) Earning Money Deposit
(c) Token E-Cash (d) Earnest Money Deposit
33. People in the stock market who anticipate lower returns are called?
(a) Sharks (b) Bears (c) Bulls (d) Elephants
34. A position when a person’s assets are not enough to pay off the liabilities due, is called?
(a) Poverty (b) Risk Adjustment (c) Payoff (d) Insolvency
MTP-March’22
35. Responsiveness in demand with changes its price is called?

(a) Price Skimming (b) Price Sensitivity
(c) Price Elasticity of Demand (d) Price Discrimination
36. The Profit and Loss account of Ganpati Agarbattis showed that the revenue was exactly equal to the
expenditures during the year. This position is termed as?
(a) Equilibrium (b) Breakeven Point
(c) Double Entry Accounting Balance (d) Elastic Losses
(c) Nestle (d) HP
38. ADR stands for:
39. A company is said to undergo ______ when its assets are sold off piecemeal rather than one single
operating entity?
(a) Acquisition (b) Merger
(c) Liquidation (d) Sale off
(a) Bid (b) Ask
(c) Badla (d) Beta
41. Stakeholders includes all of the below except which?
(a) Policy makers (b) Investors
(c) Competitors (d) Promoters
42. Token money paid in the early stages of Negotiation is called?
(a) Early Money Deposit (b) Earning Money Deposit
(c) Token E-Cash (d) Earnest Money Deposit

43. Bears are the stock market players that have ———————expectations.
(a) Realistic (b) Positive
(c) Optimistic (d) Pessimistic
44. Which of the following is not a form of privatization?
(a) Delegation (b) Divestment
(c) Departmentalization (d) Disinvestment
MTP-Nov’21
45. Dividing consumer into groups based on different consumer characteristics, to deliver specially designed
advertisements that meet these characteristics as closely as possible, is known as-
(a) Mass marketing (b) Market targeting
(c) Market segmentation (d) Marketing plan
46. Which of the following is not a stakeholder for a business?
(a) Customer (b) Promoter
(c) Competitor (d) Government
47. Rates of interest that can be changed contractually by the lender are called-
(a) Spot rates (b) Administered rates
(c) Swap rates (d) Repo rates
48. Process of evaluating each market segment and selective the most attractive one to enter into is
called?
(a) Marketing (b) Marketing mix
(c) Mass marketing (d) Market targeting
49. The price of security at the beginning of the trading days is called-
(a) Basket trading (b) Base price
(c) Bid (d) Book value
50. What is Hedge?
(a) It is a statistical measurement of change in the economy.
(b) It is strategy that is used to minimize the risk of a particular investment and maximize the returns
of an investment.
(c) It is trading platform.
(d) It is a security which has a solid record of dividend payments.
51. A token money given to establish an acceptance of buying especially in real estate deals is called-
(a) E-Cash (b) Earnest money deposit
(c) Fixed deposit (d) Concurrent depository receipt
52. Amount which are owned to a company that need not to be paid back is called-
(a) Assets (b) Bad debts
(c) Bears (d) Current assets

MTP-Oct’21

(a) Bid (b) Ask
(c) Badla (d) Beta
54. Security whose price is derived from another underlying asset is called?
(a) Derivative (b) Options
(c) Forwards (d) Futures
55. ADR stands for:
56. ______ is a strategy that is used to minimize the risk of a particular investment and maximize the
returns of an investment.
(a) Cap (b) Encryption
(c) Hedge (d) Term insurance
57. Setting low prices in order to discourage or deter potential new entrants to the suppliers market:
(a) Pre-Emptive Pricing (b) Price Sensitivity
(c) Price Discrimination (d) Price Elasticity
58. What is consolidation?
(a) It is an expense that is supposed to reflect the loss in value of a fixed asset.
(b) Combination of two or more entities that occurs when the entities transfer all their net assets to
a new entity created for that purpose.
(c) Potential liability arising from a past transaction or a subsequent event.
(d) Costs that can be attributed clearly to the activity you are considering.

ANSWER KEYS
1 (d) 2 (b) 3 (c) 4 (c)
5 (b) 6 (c) 7 (b) 8 (a)
9 (b) 10 (a) 11 (a) 12 (c)
13 (a) 14 (b) 15 (a) 16 (a)
17 (d) 18 (d) 19 (--) 20 (b)
21 (d) 22 (d) 23 (d) 24 (a)
25 (a) 26 (b) 27 (b) 28 (a)
29 (b) 30 (c) 31 (a) 32 (d)
33 (b) 34 (d) 35 (c) 36 (b)
37 (a) 38 (c) 39 (c) 40 (a)
41 (c) 42 (d) 43 (d) 44 (c)
45 (c) 46 (c) 47 (b) 48 (d)
49 (b) 50 (b) 51 (b) 52 (b)
53 (a) 54 (a) 55 (b) 56 (c)
57 (a) 58 (b)
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CA FOUNDATION

1. Ratio and Proportion, Indices, Logarithms ................................................... 1-6

2. Equations ..................................................................................................... 7-10

3. Linear Inequalities ...................................................................................... 11-12

4. Time Value of Money (MATHS OF FINANCE) ................................................ 13-22

5. Basic Concepts of Permutations and Combinations .................................... 23-26

6. Sequence and Series (AIRithmetic and Geometric Progressions) ............... 27-30

7. Sets, Functions and Relations ..................................................................... 31-34

-8. Basic Concepts of Differential and Integral Calculus ................................. 35-40

10. Direction Tests ............................................................................................ 45-48

11. Seating Arrangments ................................................................................... 49-54

12. Blood Realation ............................................................................................ 55-58

13. Statistical Description of Data ..................................................................... 59-64

14. Measures of Central Tendency and Dispersion ............................................ 65-72

15. Probability ................................................................................................... 73-78

16. Probability Distribution ................................................................................ 79-84

17. Correlation and Regression ......................................................................... 85-88

18. Index Number .............................................................................................. 89-94

PAPER-4: PART-I: BUSINESS ECONOMICS

1. Nature & Scope of Business Economics ............................................................... 95-102

2. Theory of Demand and Supply .............................................................................. 103-116

3. Theory of Production and Cost.............................................................................. 117-130

4. Meaning and Types of Markets ............................................................................ 131-140

5. Business Cycle ..................................................................................................... 141-152

PAPER-4 PART-II: BUSINESS AND COMMERCIAL KNOWLEDGE

1. Business and Commercial Knowledge-An Introduction...................................... 153-158

2. Business Environment......................................................................................... 159-164

3. Business Organizations....................................................................................... 165-170

4. Government Policies for Business Growth.......................................................... 171-176

5. Organizations Facilitating Business................................................................... 177-182

6. Common Business Terminologies....................................................................... 183-189

Ratio and Proportion

17. If A: B = 2:5, then (10A + 3B): (5A + 2B) is equal to

2 Chapter 1 : Ratio and Proportion, Indices, Logarithms

(a2  abb2 ) (b2 bc c2 ) ( c2 ca a2 )

30. If x = 51/3 + 5- 1/3 , 5x3 -15x is given by

37. If a = log24 12 , b = log36 24 , b = log48 36 then prove that 1 + abc =

4 Chapter 1 : Ratio and Proportion, Indices, Logarithms

39. The value of (log b

(a) x (b) 10 (c) 1 (d) None

1 (a) 2 (d) 3 (b) 4 (a)

5 (b) 6 (a) 7 (c) 8 (a)

9 (a) 10 (c) 11 (c) 12 (b)

13 (a) 14 (c) 15 (c) 16 (a)

17 (a) 18 (c) 19 (a) 20 (c)

21 (b) 22 (b) 23 (b) 24 (a)

25 (d) 26 (b) 27 (b) 28 (a)

29 (a) 30 (b) 31 (d) 32 (b)

33 (d) 34 (b) 35 (c) 36 (d)

37 (a) 38 (d) 39 (a) 40 (d)

41 (b) 42 (c) 43 (b)

6 Chapter 1 : Ratio and Proportion, Indices, Logarithms

17. If one root of a equation is 2 + 5 , then the quadratic equation is _____

19. The value of 6  6  6  ....... is

1 (a) 2 (a) 3 (a) 4 (b)

5 (d) 6 (a) 7 (a) 8 (a)

9 (a) 10 (a) 11 (c) 12 (b)

13 (a) 14 (a) 15 (b) 16 (c)

17 (b) 18 (b) 19 (c) 20 (c)

21 (b) 22 (d) 23 (a) 24 (a)

25 (a) 26 (a) 27 (d) 28 (c)

29 (b) 30 (b) 31 (a) 32 (c)

1 (a) 2 (c) 3 (b) 4 (a)