41
When the decrease in the price of one good causes the demand for another good to decrease, the goods are
A)
complements
B)
normal
C)
inferior
D)
substitutes
Answer & Solution
Answer: Option
D
42
What is the theory that opening a country to world markets given an opportunity to utilize unemployed and underemployed resources known as
A)
Ricardian theory
B)
Heckscher-ohlin theory
C)
Vent-for-surplus theory
D)
Strategic trade theory
Answer & Solution
Answer: Option
C
43
The consumer is said to be in equilibrium when he plans his expenditure on x, y and z commodities in such a way that he ultimately attains
A)
$$M{U_X} = M{U_y} = {M_Z}$$
B)
$$\frac{{M{U_X}}}{{{P_X}}} = \frac{{M{U_Y}}}{{{P_Y}}} = \frac{{{M_Z}}}{{{P_Z}}}$$
C)
$$\frac{{M{U_X}}}{{{P_X}}} = \frac{{M{U_Y}}}{{{P_Y}}} = \frac{{M{U_Z}}}{{{P_Z}}} = M{U_M}$$
D)
$$\frac{{M{U_X}}}{{{P_X}}} < \frac{{M{U_Y}}}{{{P_Y}}} < \frac{{M{U_Z}}}{{{P_Z}}} < M{U_M}$$
Answer & Solution
Answer: Option
C
44
Oligopolistic firms making their price-output decisions keeping in view the current and possible future decisions of their rival firms, is an example of
A)
strategic interaction
B)
prisoner's dilemma
C)
price leadership
D)
None of these
Answer & Solution
Answer: Option
A
45
A hypothesis is tested by
A)
the realism of its assumption(s)
B)
the lack of realism of its assumption(s)
C)
its ability to predict accurately
D)
none of the above
Answer & Solution
Answer: Option
C
46
Under which of the following situations, economies of scale exists to the potential and persists?
A)
When firm is too small and too specialized
B)
When firm's decision to hire inputs do not result in an increase in the input costs
C)
When firm is too large and overdiversified
D)
When long-run cost of producing a unit falls as the output increases
Answer & Solution
Answer: Option
D
47
Elasticity of demand is equal to unity while marginal revenue is
A)
positive
B)
zero
C)
negative
D)
indeterminate
Answer & Solution
Answer: Option
B
48
Which one of the following does not explain the basic nature of business economics?
A)
Behaviour of firms in theory and practice
B)
Distribution theories like rent, wages and interest along with the theory of profit
C)
Use of the tools of economic analysis in clarifying problems in organising and evaluating information and in comparing alternative courses of action
D)
Integration of economic theory with business practices for the purpose of facilitating decision-making
Answer & Solution
Answer: Option
B
49
Match the following.
List-I List-II
a. Excess of profit total revenue over total explicit cost
1. Normal Profit
b. Total profit revenue equals total economic cost
2. Economic Profit
c. Excess of total revenue over total of explicit and implicit costs and a normal rate of return
3. Accounting Profit
A)
a-3, b-1, c-2
B)
a-2, b-1, c-3
C)
a-1, b-2, c-3
D)
a-1, b-3, c-2
Answer & Solution
Answer: Option
A
50
A firm in perfect competition will have long run equilibrium when
A)
AR > AC
B)
MR = MC = AR = AC
C)
MR = MC but AC < AR
D)
AC = AR
Answer & Solution
Answer: Option
B
