Managerial Economics

31

Match the following.

List-I (Types of Market)	List-II (Nature of Industries)
a. Perfect Competition	1. Financial markets
b. Monopolistic Competition	2. FMCG market
c. Oligopoly	3. Cars
d. Monopoly	4. Transport

A) a-1, b-2, c-3, d-4 B) a-4, b-3, c-2, d-1 C) a-1, b-2, c-4, d-3 D) a-1, b-3, c-2, d-4

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Answer & Solution

Answer: Option A

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32

In case the demand elasticity under imperfect competition is unity, the marginal revenue will be

A) more than utility, but less than infinity B) equal to unity C) less than unity, but more than zero D) equal to zero

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Answer & Solution

Answer: Option D

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33

A movement along a demand curve indicates that a different quantity is being demanded. This movement is due to

A) change in income B) change in taste C) change in price D) change in price of substitute

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Answer & Solution

Answer: Option C

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34

The concept of MU for explaining diamond-water paradox is

A) absolutely correct B) absolutely wrong C) partially correct D) can't be explained

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Answer & Solution

Answer: Option A

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35

A firm under perfect competition faces for its product

A) A horizontal demand curve B) A vertical demand curve C) An upward rising demand curve D) A downward sloping demand curve

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Answer & Solution

Answer: Option A

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36

The optimum output is the one which is produced

A) At the maximum average cost B) By the optimum firm C) At the minimum average cost D) At zero marginal cost

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Answer & Solution

Answer: Option C

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37

Which of the following market situations explains marginal cost equal to price for attaining equilibrium?

A) Perfect competition B) Oligopoly C) Monopoly and imperfect competition D) Monopoly only

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Answer & Solution

Answer: Option A

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38

The law of equi-marginal utility states

A) $$\frac{{{\text{M}}{{\text{U}}_{\text{x}}}}}{{{{\text{P}}_{\text{x}}}}} > \frac{{{\text{M}}{{\text{U}}_{\text{y}}}}}{{{{\text{P}}_{\text{y}}}}} > \frac{{{\text{M}}{{\text{U}}_{\text{z}}}}}{{{{\text{P}}_{\text{z}}}}} > {\text{M}}{{\text{U}}_{\text{m}}}$$ B) $$\frac{{{\text{M}}{{\text{U}}_{\text{x}}}}}{{{{\text{P}}_{\text{x}}}}} = \frac{{{\text{M}}{{\text{U}}_{\text{y}}}}}{{{{\text{P}}_{\text{y}}}}} = \frac{{{\text{M}}{{\text{U}}_{\text{z}}}}}{{{{\text{P}}_{\text{z}}}}} = {\text{M}}{{\text{U}}_{\text{m}}}$$ C) $${\text{M}}{{\text{U}}_{\text{x}}}.{{\text{P}}_{\text{x}}} = {\text{M}}{{\text{U}}_{\text{y}}}.{{\text{P}}_{\text{y}}} = {\text{M}}{{\text{U}}_{\text{z}}}.{{\text{P}}_{\text{z}}}$$ D) $$\frac{{{\text{M}}{{\text{U}}_{\text{x}}}}}{{{{\text{P}}_{\text{x}}}}} < \frac{{{\text{M}}{{\text{U}}_{\text{y}}}}}{{{{\text{P}}_{\text{y}}}}} < \frac{{{\text{M}}{{\text{U}}_{\text{z}}}}}{{{{\text{P}}_{\text{z}}}}} < {\text{M}}{{\text{U}}_{\text{m}}}$$

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Answer & Solution

Answer: Option B

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39

Gross national savings measure the

A) amount of GNP not consumed B) excess of income over consumption plus the net taxes C) sum of retained earnings and depreciation amounts D) excess of disposable income over consumption

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Answer & Solution

Answer: Option B

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40

Transfer payments by the government are not included in the net domestic product because

A) these are gifts from the government to the recipients B) their opportunity cost is zero C) such payments may not ultimately reach the recipients D) no corresponding production of goods and services has taken place to match the paymerit of such funds

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Answer & Solution

Answer: Option D

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