1
Ordinal approach is based on
A)
Utility could not be measured in ordinal numbers
B)
Utility could not be measured in cardinal numbers
C)
Law of maximum satisfaction
D)
Utility can be measured
Answer & Solution
Answer: Option
B
2
If the individual firm's demand curve is coincident with the market demand curve then
A)
Marginal revenue is equal to average revenue
B)
The firm is a monopolist
C)
The firm can set any price it wants without limitation
D)
The firm is price-taker
Answer & Solution
Answer: Option
B
3
Match the following:
List-I (Items) List-II (Applications)
a. Profit
1. Sales - (VC + FC)
b. Margin of safety
2. $$\frac{{{\text{FC}} + {\text{Profit}}}}{{{\text{Sales}} - {\text{VC}}}}$$
c. Sales in Rs.
3. $$\frac{{{\text{FC}} + {\text{Profit}}}}{{1 - \frac{{{\text{VC}}}}{{{\text{Sales}}}}}}$$
d. Contribution margin per unit
4. $$\frac{{{\text{Fixed Cost}}}}{{{\text{BEP in units}}}}$$
5. Profit + TFC
A)
a-1, b-2, c-3, d-4
B)
a-1, b-5, c-2, d-4
C)
a-3, b-1, c-2, d-4
D)
a-3, b-4, c-2, d-1
Answer & Solution
Answer: Option
B
4
Constrained optimization techniques are not designed to deal with the problem of
A)
limited availability of essential inputs
B)
self-serving management
C)
contractual requirements
D)
scarce investment funds
Answer & Solution
Answer: Option
B
5
Which statement is/are true?
A)
If demand is elastic, a price increase will lower total revenue, and a decrease in price will raise total revenue
B)
If demand is elastic, the relative change in quantity is larger than that of price, so a given percentage increase in price causes quantity to decrease by a larger percentage, decreasing total revenue
C)
If demand is inelastic, a price increase will produce a less than proportionate decline in the quantity demanded
D)
All of the above
Answer & Solution
Answer: Option
D
6
From the following determinants of the price elasticity of demand, indicate the correct option for the determinants having a positive relationship with the degree of the price elasticity of demand.
A)
Both 1 and 2
B)
Both 3 and 4
C)
1, 2 and 3
D)
2, 3 and 4
Answer & Solution
Answer: Option
C
7
The degree of price elasticity of demand used for goods is influenced by whether
A)
1, 3 and 4 only
B)
2 and 3 only
C)
1 and 2 only
D)
2, 3 and 4 only
Answer & Solution
Answer: Option
A
8
On an indifference map, if the income consumption curve slopes downwards to the right it shows that
A)
Both X and Y are superior goods
B)
Y is an inferior good
C)
X is an inferior good
D)
Both X and Y are inferior goods
Answer & Solution
Answer: Option
B
9
A consumer will be maximising his utility if he allocated his money income so that
A)
Elasticity of demand is the same for all purchased products
B)
The marginal utility from the last rupee spent on each purchased product is the same
C)
The marginal utility of the last unit of each product consumed is equal
D)
Total utility gained from each product consumed is the same
Answer & Solution
Answer: Option
B
10
The substitution effect works to encourage a consumer to purchase more of a product when the price of that goods is falling because
A)
Other products are now less expensive than before
B)
The consumer's real income has de creased
C)
The product is now relatively less expensive than before
D)
The consumer's real income has increased
Answer & Solution
Answer: Option
C
