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IYC/FYBCOM/SEM 1/BUSINESS ECONOMICS, QUESTION BANK (for practice and reference), , 1. When the price of a commodity changes, it results in a change in the consumer’s real, income or purchasing power. Identify which effect?, a., b., c., d., , Price Effect, Substitution Effect, Income Effect, Demand Function, , 2. _______ price is that price of a commodity at which the demand for the commodity is, equal to its supply., a., b., c., d., , Disequilibrium, Equilibrium, Microeconomics, Other, , 3. _______ cost would be the next best alternative that you have sacrificed., , a., b., c., d., , Marginal Cost, Incremental Cost, Opportunity Cost, Business Economics, , 4. Which study studies the functioning of an economy as a whole?, , a., b., c., d., , Microeconomics, Macroeconomics, Economic policies, Other, , 5. ______ refers to the various quantities of commodity which a producer will offer for, sale at a particular time at various corresponding prices.

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a., b., c., d., , Demand, Supply, Law of Demand, Marginal Cost, , 6. Microeconomics deals with the analysis of national income. Identify the given, statement is correct or incorrect?, a. Incorrect, b. Correct, c. Partially In-correct, d. Other, , 7., a., b., c., d., , Income elasticity of demand for normal goods is to be ______, Positive, Negative, Zero, Other, , 8. As the price of a commodity falls, it becomes relatively cheaper than other, alternatives. This effect is known as______, , a., b., c., d., , Income Effect, Price Effect, Snob Effect, Substitution Effect, , 9. A normal good can be defined as one which consumers purchase more of as______., , a. Prices Fall, b. Incomes, c. Prices Rises, d. Incomes Fall, 10. Average revenue is equal to the _______ per unit of output.

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a., b., c., d., , Marginal Revenue, Cost, Price, Incremental Income, , 11. Cross elasticity of demand for complementary good is ______., , a., b., c., d., , Negative, Positive, Zero, One, , 12. The ______ method uses time Series data., , a., b., c., d., , Trend, End-use, Sample Survey, Delphi, , 13. _______ forecasts try to predict the future situation with the existing actions or, policies of the firms., , a., b., c., d., , Active, Passive, Sales, Other, , 14. _______ revenue is total sale of certain amount of commodity at a given time., , a., b., c., d., , Average, Total, Marginal, Income., , 15. Supply & Price are ________ related.

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a., b., c., d., , Inversely, Directly, Zero, Other., , 16. Price expectation is an exception to the law of demand:, Identify the statement is correct or Incorrect?, , a., b., c., d., , Incorrect, Correct, Partially correct/ incorrect, Other., , 17. Business forecasts are extremely important aspect of business economics. Identify the, given statement is correct or incorrect?, , a., b., c., d., , Incorrect, Correct, Partially incorrect, Other, , 18. What is income denoted as?, , a., b., c., d., , P, Y, I, C, , 19. Demand for a commodity is only the desire for the commodity. Identify the given, statement is correct or incorrect?

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a., b., c., d., , Correct, Incorrect, Partially Incorrect, Other, , 20. Which of the following is not a feature of the sample survey method?, , a., b., c., d., , Errors may occur in large size samples., All potential consumers are included in the survey, Possibility of consumer bias, Useful to detect changes in consumers tastes and preferences, , 21. A change in the price of commodity, with no change in other determinants, results, in________., , a., b., c., d., , Change in quantity demanded, A shift in the demand curve, An increase or decrease in demand, All of the above, , 22. If TR increases due to fall in the price of the product, then __________, , a., b., c., d., , Price elasticity is equal to one, Price elasticity is less than one, Price elasticity is zero, Price elasticity is greater than one, , 23. The most important determinant of price elasticity is:, , a., b., c., d., , The slope of the demand curve, The availability of substitutes, The price of other goods, The income of the consumer

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24. An inferior goods :-, , a., b., c., d., , Can be a giffen good, but a giffen good is not always inferior, Must be a giffen good, Can be a giffen good but a giffen good must always be an inferior good., Has a positively sloped demand curve, , 25. Price elasticity of demand is defined as :-, , a. The change in quantity demanded resulting from one percentage change in price, b. The percentage change in price resulting from one unit change in quantity demanded, c. The change in the price of the good divided by the resulting change in its quantity, demanded, d. The percentage change in quantity demanded resulting from one percentage, change in the price, 26. Which of the following is not an assumption of the law of demand?, , a., b., c., d., , Consumer’s income does not change, No change in consumer’s taste & preferences, No change of the price of inputs, No future uncertainty., , 27. In the market demand curve under perfect competition is _________ sloping., a., b., c., d., , Upwards, Downward, Price, Other, , 28. In the stages of law, In phase 3 the marginal product becomes _____________., , a. Zero

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b. Negative, c. Decrease, d. Increase, , 29. Choose which statement does not include assumptions of law of demand:, , a., b., c., d., , No change in consumer income., No change in taste & preferences., No change in size of population, Giffen goods., , 30. In the perfect competition, the seller is the price ______., , a., b., c., d., , Taker, Maker, Homogeneous, Other, , 31. The ISO quant curves are......., a. convex, b. concave, c. vertical, d. horizontal, , 32. Every curve in the diagram of ISO quant curve indicates......... level of production., a. same, b. different, c. average, d. infinite, , 33. Give the full form of MRTP in English., a. Marginal Rate of Technical Substitution

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b. Maximum Rate of Technical Substitution, c. Minimum Rate of Technical Substitution, d. Micro Rate of Technical Substitution, , 34. When MP is maximum, which of the following is true?, a. AP = MP, b. AP is declining, c. AP is maximum, d. AP is rising, , 35. Two ISO Quant curves...... to each other., a. Can intersect, b. Cannot intersect, c. Parallel, d. Vertical, 36. ______ is known as no profit no loss point, a. point of origin, b. Marginal point, c. Break-even point, d. none of the above, , 37.Profit= Price - ________, a. total cost, b. fixed cost, c. variable cost, d. marginal cost, , 38. A profit maximizing firm need to monitor its ________ and revenue., a. cost

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b. profit, c. fixed cost, d. variable cost, , 39. Marginal cost is also referred as ______., a. Supplementary, b. Fixed cost, c. All of the above, d. Incremental cost, , 40. Marginal cost refers to the change in total cost for a _________ unit change in output., a. one, b. two, c. three, d. four, , 41. The average variable cost will generally _____ as the output rises from zero to the normal, capacity level of output., a. fall, b. increase, c. equal, d. marginal, , 42. When the Marginal Cost is equal to Average Total Cost, the average Total cost is ____., a. minimum, b. equal, c. increases, d. changes

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43. Factors of production is known as ________, a. demand, b. supply, c. input, d. output, , 44. Economies and diseconomies of large scale play a significant role in determining the, shape of the ______., a. K. J. Arrow, b. LAC curve, c. None of these, d. Both of the above, , 45. In the short run phenomenon as the proportion of one factor is increased this analysis is, exhibits the ________, a. Law of variable proportion, b. Law of Returns to Scale, c. Law of Demand, d. Law of Supply, , 46. __________ means the amount of a product that would be offered for sale at all possible, prices during a given period of time., a. demand, b. supply, c. utility, d. production, , 47. ______ refers to want satisfying power of a commodity, a. utility, b. demand

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c. supply, d. input, , 48. The main objective of firm is to earn _________, a. loss, b. profit, c. utility, d. prestige, , 49. Price is treated as _________ variable., a. complimentary, b. independent, c. dependent, d. internal, , 50. Prof. Hicks, analysed the indifference curve in his _________ book., a. wealth of nations, b. business economics, c. value and capital, d. drama, , 51. Other things remaining the same, the quantity of _______ decreasing then increasing in, quantity demanded., a. price, b. utility, c. export, d. import, , 52. _______ deals with the various aspects of supply of a commodity

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a. production analysis, b. supply analysis, c. demand analysis, d. none of the above, , 53. _______ is the per unit value, a. average, b. functional relation, c. equations, d. none of the above, , 54. If there is zero substitutability between capital and labour the isoquant is__________., a. a straight line, b. L shaped, c. concave to the origin, d. None of these, , 55._______ explains the dependence of one variable on the other variable, a. functional relations, b. equations, c. both a and b, d. none of the above, , 56. The ratio of change in total revenue to a unit change in output sold is _______, a. marginal revenue, b. marginal cost, c. average revenue

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d. average cost, , 57. Good sold in perfect competition are _______, a. homogeneous, b. heterogeneous, c. duplicate, d. original, , 58.. Total amount of money received through sales composes __________, a. total revenue, b. marginal revenue, c. total cost, d. marginal cost, , 59. Under perfect competition there are _______ number of buyers, a. small, b. large, c. equal, d. none of the above, 60. Labour economy is caused by ______., a. Better organisation, b. Time management, c. Specialisation/division of labour, d. Managerial Efficiency