TIME = 2HRS CA FOUND - ECO BCK MOCK 2 M.

M = 100

1. _____ is of the view that fluctuations in economic activities are because of fluctuations in aggregate effect
demand.
(a) Keyens (b) Schumpeter (c) Nicholas Kaldor (d) Joan Robinson

2. All of the following are the properties of isoquant except-

(a) An isoquant is downward sloping curve
(b) A higher isoquant represents a higher level of output
(c) Two isoquants can intersect each other
(d) Isoquants are convex to the origin

3. Which of the following statement is incorrect?

(a) Mobilisation of savings is done through network of banking and other financial institutions.
(b) Land lacks geographical mobility but has occupational mobility.
(c) Entrepreneur is also called the organizer, & the manager or the risk taker.
(d) Labour can be stored.

4. The demand function of a commodity ‘X’ is given by Q x = 20 – 3 Px. What would be he value of P x when the
corresponding value of Qx = 14.
(a) Rs. 5 (b) Rs. 4 (c) Rs. 3 (d) Rs. 2

5. Business Economics is generally in nature.

(a) normative (b) positive (c) neutral (d) descriptive

6. Delphi technique was developed by-

(a) Schumpeter (b) Nicholas Kaldor (c) Olaf Helmer (d) Hawtrey

7. When demand and supply increase equally, then –

(a) both equilibrium price and equilibrium quantity remain unchanged.
(b) both equilibrium price and equilibrium quantity increase
(c) equilibrium price remains unchanged but equilibrium quantity increases
(d) equilibrium price changes but equilibrium quantity remains unchanged.

8. At the quantity where MR equals MC, the AFC is Rs 7; AVC is Rs 23 and the price is Rs 30, hence, the firm
–
(a) should continue production in short run (b) should continue production in long run
(c) should shut down (d) none of these

9. Expansion phase all but one of the following characteristics.

(a) Increase in national output (b) Increase in consumer spending
(c) Excess production capacity of industries (d) Expansion of bank credit

10. According to kinked demand curve theory, the upper segment of the demand curve is –
(a) highly elastic (b) highly inelastic (c) unitary elastic (d) perfectly inelastic

11. In economics the term market refers to –

(i) a particular place
(ii) a commodity
(iii) buyers and sellers
(iv) bargaining for a price
(a) only I (b) only ii (c) ii & iii (d) ii, iii and iv

Use the following data to answer questions 12 and 13

12. The total product when 5 units of labour are employed is-
(a) 60 (b) 76 (c) 90 (d) 96

13. The average product of 3rd unit of labour is-

(a) 21 (b) 20 (c) 19 (d) 18

14. Consider the following figure-

(a) super normal profit (b) normal profit (c) loss (d) shut down point

15. During depression _____ industry suffer from excess production capacity.
(a) capital goods (b) consumer durable goods (c) non-durable goods(d) both ‘a’ and ‘b’

16. The term “Ceteris Paribus” in the Law of Demand means-

(a) All factors except one remain constant (b) All factors remain constant
(c) All factors are variable (d) None of the above

17. When the demand for a commodity does not change with the increase in its price from Rs. 2 to Rs. 5, then
elasticity of demand is
(a) E = ∞ (b) Ed = 0 (c) Ed < 1 (d) Ed > 1

18. Buyer’s surplus is highest in the case of _____

(a) Luxuries (b) Comforts (c) Necessaries (d) All the above
19. Following is the utility schedule of a person-

If the commodity is sold for Rs 4 and MU of one rupee is 5 utils, how many units will the consumer buy to
maximize satisfaction?
(a) 1 unit (b) 2 units (c) 3 units (d) 4 units

20. All but one are the assumptions of the law of variable proportions. Which one is not?
(a) There is only one factor which is variable (b) All units of variable factor are homogeneous
(c) State of technology remains constant (d) Applies in long run

21. The MRTSxy is constant if two factors are _____ of each other
(a) perfect substitutes (b) perfect complements (c) imperfect substitutes(d) imperfect complements

22. A firm uses two inputs, labour (L) and capital (K). The firm produces and sells a given output. You have the
following information PL = Rs 40; PK = Rs 100; MPL = 40; MPK = 40. What would you say about the firm?
(i) That the firm is operating efficiently
(ii) That, the firm is not operating efficiently

(a) Only I (b) Only ii (c) i and iii (d) ii and iv

23. Which of the following statement is incorrect?

(a) Business economics is a normative in nature
(b) Business economics is closely related with statistics
(c) Business economics only considers micro variables
(d) Business economics is also called Managerial economics

24. In case of Giffen’s Paradox, the slope of the demand curve is-
(a) parallel to X-axis (b) positive (c) negative (d) parallel to Y-axis

25. A consumer buy 80 units of a commodity at Rs 4 per unit. When the price FALLS, he buy 100 units. If E d =
-1, the new price will be-
(a) Rs 3.5 (b) Rs 3 (c) Rs 2.5 (d) Rs 2

26. Supply curve of labour is-

(a) upward sloping (b) horizontal (c) backward bending (d) vertical

27. Problems like difficulties in management, lack of supervision, higher input cost, etc. due to large scale
production leads to-
(a) economies of scale (b) real economies of scale
(c) diseconomies of scale (d) Both ‘b’ and ‘c’

28. Under perfect competition –

(a) MC = Price (b) MC > Price (c) MC < Price (d) none of these
29. If e >1 on average revenue curve –
(a) MR is positive and TR is rising (b) MR is negative and TR is falling
(c) MR is zero and TR is maximum (d) none of these

30. A bilateral monopoly is one which-

(a) there are two products with one producer (b) there are international monopoly agree-ments
(c) monopoly is shared between the people (d) a monopolist is facing a monopsonist

31. Cobb-Dauglas production function revealed that the increase in the manufacturing production was
contributed by labour and capital respectively by-
(a) 3/4 th and l/4 th (b) l/4 th and 3/4 th (c) 2/3 rd and l/3 rd (d) None of the above

32. The Law of Demand is a _______ statement.

(a) Positive (b) Normative (c) Descriptive (d) Both ‘a’ and ‘c’

33. ‘A government deficit will reduce unemployment and cause an increase in prices.’ This statement is—
(a) Positive (b) NormativE (c) Incomplete (d) None of these

34. A consumer spends Rs 40 on a good at a price of Rs 1 per unit and Rs 60 at a price of Rs 2 per unit. The
elasticity of demand is-
(a) 0.43 (b) 2.5 (c) .35 (d) 3.5

35. A consumer may not be in equilibrium at point C or D because _____

(a) MRS xy = Px / Py
(b) The whole income is not spent
(c) Point E gives higher level of Satisfaction with the same expenditure as on point C and D
(d) Of sufficiency of income

36. Raw material is an example of –

(a) Circulating Capital (b) Fixed Capital (c) Tangible Capital (d) Real Capital

37. The firm’s short run supply curve is its marginal cost curve above its average variable cost curve
is correct about –
(a) perfect competition (b) oligopoly (c) monopoly (d) duopoly

38. As the consumer’s income increases, the demand for necessaries of life will increase _______ to the
increase in income.
(a) Less than proportionate (b) More than proportionate (c) Proportionate (d) Nothing can be said
39. Given = Qx = 500 – 4 Px
Find elasticity demand when price = Rs 25
(a) .50 (b) .25 (c) 1 (d) .75

40. Reason for fall in both AP and MP curves is-

(a) under utilization of the fixed factor (b) over utilization of the fixed factor
(c) under utilization of the variable factor (d) full utilization of the variable factor

41. If we have constant returns to scale and we increase both labour and capital by 10% output will also
increase by-
(a) 20% (b) 30% (c) 10% (d) 5%

42. If a monopoly firm is charging price Rs 20 per unit and elasticity of demand is 5, then, MR will be –
(a) Rs 10 (b) Rs 12 (c) Rs 14 (d) Rs 16

43. Demand curve of a firm is indeterminate in case of –

(a) monopoly (b) oligopoly (c) duopoly (d) none of these

44. Involuntary unemployment is almost zero in the _____ phase of business cycle.
(a) Expansion (b) Contraction (c) Trough (d) Depression

45. There is end of pessimism and the beginning of optimism at ______

(a) expansion (b) peak (c) trough (d) depression

46.

In the figure above, If OP is price, then ACO represents-

(a) TC (b) TR (c) TR at OP price (d) TR at OY price

47. All but one are the factors which affect individual demand. Find the odd one out.
(a) Price of related good (b) Income of the consumer
(c) Tastes and preferences of consumer (d) Number of consumers in the market

48. The Law of Demand is explained by-

(a) Cardinal approach (b) Ordinal approach (c) Both ‘a’ and ‘b’ (d) Neither ‘a’ nor ‘b’

49. The total effect of price change of a good is-

(a) Substitution Effect + Income Effect (b) Substitution Effect + Price Effect
(c) Substitution Effect + Demonstration Effect (d) Demonstration Effect + Veblen Effect
50. Which of the following can be considered as labour in economics-
(a) Singing for pleasure (b) A teacher teaching his own child at home
(c) Looking after, a sick friend (d) A teacher teaching in school

51. According to _____ innovations introduced by an entrepreneur give rise to profits.

(a) Prof. F.H. Knight (b) Prof. Joseph A. Schumpeter
(c) Prof. Paul Samuelson (d) Dr. Alfred Marshall

52. Short run supply curve of a perfectly competitive firm is represented by –

(a) short run MC curve (b) short run AC curve
(c) the part of the MC curve that lies above AVC (d) none of these

53. Find the odd out –

(a) Monopoly may be the result of control over raw materials
(b) Monopoly may be the result of business combines
(c) Monopoly may be the result of patents, copyrights, etc.
(d) Monopoly may be the result of control over demand of commodity

54. Which of the following statements incorrect?

(a) Man cannot create matter.
(b) Production is an activity of making some-thing material only.
(c) Production can be defined as addition of utility.
(d) Production is any economic utility which is directed towards the satisfaction of the wants of the people

55. If a producer sells 4 units of a good at Rs 10 per unit and 5 units at Rs 8 per unit, marginal revenue would
be –
(a) 0 (b) 1 (c) 2 (d) 3

56. Which of the following statement is incorrect –

(a) Demand and supply determine price of a commodity

(b) At equilibrium price quantity demanded equals quantity supplied.

(c) Demand factor influences price more.
(d) Equilibrium price can change.

57. When the quantity of a commodity that an individual buyer demand falls in response to the growth of
purchases by other buyers, such an effect is called _______
(a) Bandwagon Effect (b) Snob Effect (c) Veblen Effect (d) None of the above

58. ____ is considered as a ‘naive’ approach to demand forecasting.

(a) Trend Projection Method (b) Expert Opinion Method
(c) Collective Opinion Method (d) Regression Analysis

59. If MR < 0, then the TR will be –

(a) rising (b) highest (c) falling (d) zero
60. A competitive firms MC curve and AVC curve are given to, show which region of the curves show the firm’s
supply curve in the short run.

(a) region HE (b) region EG (c) region EF (d) region IE

61. Find out the incorrect statement:

(a) Economic activities are income generating activities

(b) Economic activities are productive activities

(c) Consumption is not an economic activity

(d) Non-banking financial companies’ operations are economic activities

62. Code of Conduct is an aspect of which form of occupation?

(a) Employment (b) Entrepreneurship (c) Business (d) Profession

63. Hunger to win customers for life” is the mission of -

(a) Bajaj Auto Limited (b) Bharti Airtel Limited (c) Bharat Petroleum Corporation Limited

(d) Flipkart

64. 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

65. RBI’s role does not include-

(a) Friend, Philosopher and Guide to Government

(b) Maintain financial books of accounts of the Government

(c) Regulate inflation

(d) Guide all commercial banks

66.’ Limit order’ is

(a) An order to buy or sell a share at a higher price (b) An order to buy or sell a share at a lower price

(c) An order to buy or sell a share at a specified price (d) An order to buy or sell a share at prevailing price
67. Kumar & Sons has business presence in India, Bangladesh, Nepal and Bhutan. It can be termed as?

(a) Binational (b) Multinational (c) Local (d) Domestic

68. Environmental analysis helps in except-

(a) Anticipate opportunities and to take optimum responses

(b) Turning threats to firm’s advantages

(c) Providing input for strategic decision making

(d) Avoiding competition

69. Identify the Swiss transnational food and drink company?

(a) Larsen & Toubro (b) Walmart (c) Nestle (d) Unilever

70. Land reforms made by “ Akbar the Great” were introduced under the leadership of -

(a) Birbal (b) Todarmal (c) Hizabal (d) Jaidev

71. 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

72. The idea of being concerned with People, Profits and Planet is a concept under?

(a) PESTLE (b) SWOT (c) Sustainable Development (d) Triple Bottom Line

73. Maximum number of members in a Private limited company are:

(a) 50 (b) 200 (c) 20 (d) 500

74. Physical resources and technological capabilities are one of the components of_

(a) Macro enlightenment (b) Micro environment (c) Internal environment (d) External environment

75. ‘Aequa Panna’ is a water brand product of

(a) Cipla (b) Nestle (c) ITC (d) Walmart

76. The formation of National Skills Development Corporation (NSDC) is an example of

(a) Regulatory policies (b) Restrictive policies

(c) Facilitative policies (d) Protective policies

77. 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

78. The simultaneous purchase and sale of two identical commodities or instruments are called as

(a) Amortize (b) Annuity (c) Arbitrage (d) Asset

79. 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

80. 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

81. Satya Nadella is the CEO of-

(a) Amazon (b) Microsoft (c) Apple (d) Wipro

82. 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

83. 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

84. Which of the following is correct?

(a) The bid is higher than the offer (b) The bid is equal to the offer

(c) The offer is higher than the bid (d) Both offer and bid are unrelated

85. 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

86. The following factors are an outcome of environmental scanning except the

(a) Strategic thinking (b) Expectations (c) Trends (d) Issues

87. ‘Wills Lifestyle’ is a brand owned by?

(a) Tata Sons (b) ITC Ltd. (c) Amazon (d) Flipkart

88. Tariff Advisory Committee is a part of?

(a) RBI (b) IRDAI (c) SEBI (d) CCI

89. 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

90. Highest Price the buyer is willing to pay is called?

(a) Bid (b) Ask (c) Badla (d) Beta

91. Tribal communities of Africa bringing their hunt and getting pulses in return can be called as what?

(a) Non-Economic Activity (b) Sustainable Practice of Trade

(c) Social Entrepreneurship (d) Economic Activity

92. 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

93. 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

94. Goods and Service Tax (GST), is a form of?

(a) International Trade Policy (b) Inclusive Policy (c) Policy Reform (d) Public Welfare Scheme

95. The competition commission of India was established on-

(a) 14th August, 2003 (b) 14th September, 2003 (c) 14th October, 2003 (d) 14th November, 2003

96. A strategy which involves setting low prices in order to discourage or deter potential new entrants to the

suppliers’ market is termed as

(a) Price sensitivity (b) Price skimming (c) Pre-emptive pricing (d) Penetrative pricing

97. Which of the following is a hybrid form of business organization?

(a) HUF (b) Partnership (c) Limited Liability Partnership (LLP) (d) Public company

98. Promotion of women in tech by the state government is a type of which policy?

(a) Protective (b) Regulatory (c) Restrictive (d) Facilitating

99. Which of the following is not a form of privatization?

(a) Delegation (b) Divestment (c) Departmentalization (d) Disinvestment

100. Charging high prices initially to build a brand conscious customer base is called?

(a) Price Sensitivity (b) Price Skimming (c) Price Discrimination (d) Price Margin Analysis