Subject : MEFA

BRINDAVAN
INSTITUTE OF TECHNOLOGY & SCIENCE, (BITS KNL)
III B. Tech. II Sem. (R13)
Branch
V UNITS OBJECTIVE

: ME

1. Managerial Economics as a subject gained popularity first in______

(a) U.S.A (b) Germany (c) India (d) England

( A

2. Which subject studies the behavior of the firm in theory and practice
(a) Micro Economics
(b) Managerial Economics (c) Macro Economics (d) Welfare Economics

( B

3. Which areas covered by the subject Managerial Economics.

(a) Operational issues
(b) Environmental issues (c) Operational & Environmental issues (d) None

( C

4. Managerial Economics is close to_________Economics

(a) National (b) Business (c) Micro (d) Industrial

( C

( C

5. The theory of firm also called as_____________

(a) Welfare Economics
(b) Industrial Economics (c) Micro Economics
6. Who explained the Law of Demand?
(a) Joel Dean
(b) Cobb-Douglas

(d) None

(c) C.I.Savage & T.R.Small (d) Marshal

7. Geffen goods, Veblan goods and speculations are exceptions to___

(a) Law of Demand
(b) Production function (c ) Cost function

.
(d) Finance function

( A

8.When a small change in price leads great change in the quantity demand, We call it ________
(a) Inelastic Demand
(b) Negative Demand (c) Elastic Demand
(d) None

.( C

9.When a great change in price leads small change in the quantity demand,We call it ________
(a) Elastic Demand
(b) Positive Demand
(c) Inelastic Demand
(d) None

.( C

10. Coffee and Tea are the ________ goods.

(a) Relative
(b) Complementary

( C

(c) Substitute

(d) None

11. When a firm expands its Size of production by increasing all factors, It secures certain advantages,
known as
(a) Optimum Size
(b) Economies of Scale (c) Diseconomies of Scale (d) None

12. When producer secures maximum output with the least cost combination Of factors of production, it is known
as-------------------C
)
(a) Consumers Equilibrium (b) Price Equilibrium (c) Producers Equilibrium (d) Firms Equilibrium
13. The Law of Variable Proportions is also called as ____________.
(a) Law of fixed proportions (b) Law of returns to scale (c) Law of variable proportions (d) None

14. _________ Is a group of firms producing the same are slightly Different products for the same market or using same
raw material.
( A )
(a) Industry (b) Firm
(c) Plant
(d) Size
15. When proportionate increase in all inputs results in an equal Proportionate increase in output, then we
call____________.
(
(a) Increasing Returns to Scale (b) Decreasing Returns to Scale (c) Constant Returns to Scale (d) None
16. When different combinations of inputs yield the same level of output Known as ___________
(a) Different Quants (b) Output differentiation (c) Production differentiation (d) Isoquants
17. Conversion of inputs in to output is called as _________________.
(a) Sales
(b) Production (c) Income
(d) Expenditure

.( D
(

)
)

18. When Proportionate increase in all inputs results in more than equal Proportionate increase in output, then we call
_____________.
( C
(a) Decreasing Returns to Scale (b) Constant Returns to Scale (c) Increasing Returns to Scale (d) None

19.A curve showing equal amount of outlay with varying Proportions of Two inputs are called __________
_(
(a) Total Cost Curve
(b) Variable Cost Curve (c) Isocost Curve
(d) Marginal Cost Curve

20. . The cost of best alternative forgone is_______________

(a) Outlay cost
(b) Past cost (c) Future cost (d) Opportunity cost

D )

21. If we add up total fixed cost (TFC) and total variable cost (TVC), we get__
(a) Average cost
(b) Marginal cost (c) Total cost
(d) Future cost

( C

22. ________ costs are theoretical costs, which are not recognized by the Accounting system.
(a) Past (b) Explicit (c) Implicit (d) Historical

C )

23. _____cost is the additional cost to produce an additional unit of output.

(a) Marginal
(b) Sunk (c) Incremental
(d) Total

A )

24. _______ costs are the costs, which are varies with the level of output.
.
(a) Historical
(b) Past (c) Variable
(d) Fixed

D )

25. _________________ costs are those business costs, which do not Involve any cash payment.
(a) Past
(b) Historical
(c) Implicit
(d) Explicit

C )

26. The opposite of Past cost is ________________________.

(a) Historical
(b) Future cost (c) Fixed cost

B )

(d) Variable cost

27. _______ is a point of sales at which there is neither profit nor loss.
(a) Maximum sales
(b) Minimum sales (c) Break-Even sales

C )

28. What is the formula for Margin of Safety?

(
(a) Break Even sales Actual sales (b) Actual sales Minimum sales (c) Actual sales Break Even sales
(d) Maximum sales Actual sales

D )

29. What is the formula for Break-Even Point in Units?

(a) __Contribution_____
(b) __Variable cost____
Selling Price per unit
Contribution per unit
(c) _ _Fixed cost _____
(d) __Variable cost____
Contribution per unit
Selling Price per unit

C )

30. Contribution is the excess amount of Actual Sales over ______.

(a) Fixed cost
(b) Sales
(c) Variable cost

C )

31. Exchange value of a unit of good expressed in terms of money is called

(a) Expenditure (b) Capital (c) Price
(d) Cost

A )

32. The price of a product is determined by the ______of that product

(a) Place and time (b) Production and sales(c) Demand and supply (d) Cost and income

C )

(d) Average sales

(d) Total cost

33. The price at which demand and supply of a commodity equal is Known as
(a) High price
(b) Equilibrium price (c) Low price
(d) Marginal price

B )

34. A market where large number of buyers and sellers dealing in Homogeneous product with perfect knowledge is called
( C )
(a) Imperfect competition (b) Monopoly (c) Perfect competition
(d) Monopolistic competition
35. In which market, single market price prevails for the commodity
(a) Monopoly market
(b) Oligopoly market (c) Perfect competition market (d) Duopoly market

C )

36. If average Revenue is greater than the Average cost, monopolist Earns __ .
(a) Profit
(b) No loss No profit (c)Loss
(d) None

A )

37. The firm is said to be in equilibrium, when its Marginal Cost (MC) Equals to___ .
(a) Total cost
(b) Marginal Revenue
(c) Total revenue (d) Average Revenue

B )

38. ___________ is a position where the firm has no incentive either to expand or contrast its output.
(a) Maximum output
(b) Minimum output (c) Equilibrium
(d) None

C )

39. . Under which pricing method, price just equals the total cost
(a) Marginal cost pricing (b) Cost plus pricing (c) Full cost pricing(d) Going rate pricing

C )

40. ______ is a place in which goods and services are bought and sold.
(a) Factory
(b) Workshop (c) Market
(d) Warehouse

C )

41. In perfect competition market, seller is the _________.

(a) Price Maker (b) Price changer (c) Price Taker

C )

(d) Price Dictator

42. People may come and people may leave, but I go on forever is Applicable to ______ Business organization. ( A )
(a) Company
(b) Partnership (c) Sole proprietorship
(d) Joint Hindu Family
43. ______ is Supreme Authority for Company Organization.
(a) Directors
(b) Share holders (c) Debenture holders (d) Creditors

B )

44. One man one vote Principle is adopted in ______.

(a) Partnership firms
(b) Company (c) Co-operative enterprises

C )

45. The management of Joint Hindu Family business vests in the eldest member of the family, called _____.
(a) Director
(b) Grand father (c) Kartha
(d) Manager

C )

46. ____ is not required to private company to start its functions. _____.
(a) Certificate of incorporation (b) Registration (c) Certificate of commencement of business (d) None

C )

47. In public sector units ownership is in the hands of _____

(a) Private persons
(b) Public
(c) Government

C )

48. Company operates in more than one Country is called as _____.

.
(
(a) Private company
(b) Multinational company
(c) Government company (d) Indian company

B )

(d) Hindu family business

(d) None

49. Liability of Shareholder _______________.

(a) Un-limited
(b) Maximum (c) Limited to the share capital (d) None

.(

C )

50. If either state government of central government or both have got not less than 51% of share in the organization. Then
that is called____.
( C )
(a) Private organization
(b) Partnership organization (c) Government organization (d) Joint sector
organization
51) Which of the following shows the firms planned operations or resource allocation for a given period
in future
a) Operating budgets b) capital budgeting c) accounting rate of return d) internal rate of return
52) If the rate of return is more than the cost of capital, then the project is.
a) Accepted
b) rejected
c) denied
53) Cash inflows refer to
(a) Cash incomes
(b) future incomes

(c) past income

B )
( A )

d)postponed
( D

( C

(d) cash receipts

54) The diminution or reduction in the value of the asset due to wear and-tear is called
(a) Appreciation
(b) paid- up capital
(c) depreciation

(d) capital budgeting

55) Where there are two projects with different IRRs, the project with _______IRR is selected
(a) Lower
(b) Higher
(c) Zero
(d) Negative

B )

56) The ___ the IRR, the better is the profitability

(a) Lower
(b) Least

D )

D )

57) Select always projects with

(a) Lower NPV
(b) Negative NPV

(c) Bigger
(c) Zero NPV

(d) Higher
(d) Higher NPV

58) The financial statements comprise

(a) Trading Account, Balance Sheet
Loss Account ,Balance Sheet

( D )
b) Balance Sheet, Ledger (c) Journal ,Ledger (d) Trading account ,Profit &

59) Which of the following involves `for every debit, there is a corresponding credit .
(a) Single-entry
(b) Ledger entry
(c) Journal entry
(d) Double entry .
60) The expenses yet to be paid are called
(a) Accrued expenses
(b) Notional expense (c) Nominal expenses

( D

( A )
(d) Sub-standard expense

61) Which of the following is also called Return Inwards?

(a) Net purchases (b) Net sales (c) sales returns
(d) Purchases returns

( C )

62) On December 31, salary Rs 2000 was paid .this is

(a) an event (b) transaction (c) both event and transaction (d) neither event nor transaction

B )

63) When debt becomes bad, what is debited?

(a) Debtor account (b) creditor account (c) bad debts account (d) sales account

C )

64) Which would a business be most likely to use its solvency?

(a) Gross profit ratio (b) debtors collection period (c) current ratio (d) Debt-equity ratio

( D

65) A company`s returns on investment indicates its

(a) solvency
(b) stock turnover (c) profitability (d) debtor collection

( C

66) Higher asset turnover ratio explains

( B
(a) More profitability (b) better utilization of assets (c) higher sales turnover (d) large asset base

67) If average collection period is more .it means

(a) Better collection of receivables (b) poor collection of receivables
(c) Average collection of receivables (d) satisfactory collection of receivables

( B