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1 JNTU ONLINE EXAMINATIONS [Mid 1 - MEFA] Dpwnloaded From 1. Which of the following subjects does not fall under the category of Microeconomics a. Gross Domestic Product (GDP) b. Demand Theory c. Cost Theory d. Supply Theory 2. Which of the following is taken care by Managerial Economics? a. Population b. Balance of Payments c. Cost Theory d. National Income 3. The statement 'Government of India should open up economy' is a a. Descriptive Statement b. Prescriptive Statement c. Objective Statement d. Normative Statement 4. Maruthi car manufacturer, buys tyres in the open market instead of manufacturing the same within the factory. This decision area is falls under the following category: a. Investment Decision b. Inventory Decision c. Make or Buy Decision d. Production Decision 5. Nature of Managerial Economics is a. Normative b. Descriptive c. Subjective d. Objective 6. Determination of Price in different markets such as Perfect Market and Imperfect Markets is known as a. Input-output Decisions b. Demand Decisions c. Price Decisions d. Market Decisions 7. Giffen goods are also called a. Standard goods b. Superior goods c. Normal goods d. Inferior goods 8. Who defined Managerial Economics as seeking to understand and to analyze the problems of business decision making? a. Spencer and Si egelman b. Brigham and Pappas c. Hague d. Salvatore 9. Managerial Economics takes the help of following Discipline? a. Zoology b. Operations Research c. Biotechnology d. History 10. Managerial Economist solves the problems of resource allocation through a. Operations Research b. Accountancy c. Economics d. Mathematics. 11. A car-manufacturing unit is analyzing whether to produce tyres within the factory or purchase from the supplier. This decision is known as Page 1

2 a. Production Decision. b. Supply Decision. c. Make or buy Decision. d. Investment Decision. 12. Optimisation techniques are studied in Managerial Economics with the help of following subject: a. Economics b. Operations Research c. Mathematics d. Statistics. 13. Managerial Economics takes the help of following discipline? a. Physics b. Statistics c. Biotechnology d. Botany 14. An industrialist wishes to take a share in profits of a software company with Rs.1,00,000/-. This decision is known as a. Accounting Decision b. Demand Decision c. Investment Decision d. Expenditure Decision 15. Break-even analysis is a tool used in which of the following decisions: a. Input-output Decision b. Demand Decision c. Investment Decision d. Profit related Decision 16. Which of the following is covered by the scope of Managerial Economics? a. Savings Decisions b. Investment Decisions c. Welfare Decisions d. Political Decisions 17. An Industrialist is trying to divide the total investment of Rs.10,00,000/- into Fixed Capital and Working Capital. This decision is known as a. Investment Decision. b. Working Capital Decision. c. Capital Management Decision. d. Fixed Capital Decision. 18. Demand Curve a. Horizontal Straight Line to X- Axis b. Horizontal Straight Line to Y- Axis c. Slopes Downwards from Left to Right d. Sloped Upwards from Left to Right 19. The demand for Bajaj Scooters is known as a. Derived Demand b. Firm Demand c. Industry Demand d. Total Market Demand 20. Price is a a. Continuous Variable b. Discrete Variable c. Dependent Variable d. Independent Variable 21. Tomato is categorized as a. Durable Goods b. Perishable Goods c. Perennial Goods Page 2

3 d. Temporary Goods 22. You buy a Tape Recorder. The purchase is known as a. Autonomous Demand b. Derived Demand c. Market Demand d. New Demand 23. Demand is a a. Continuous Variable b. Discrete Variable c. Dependent Variable d. Independent Variable 24. Demand is defined as a. Desire backed by Purchasing Power b. Desire backed by the Inability to Pay c. Desire backed by the Unwillingness to Pay d. Willingness to Pay for a commodity without desire 25. Steel is categorized as a. Durable Goods b. Perishable Goods c. Perennial Goods d. Temporary Goods 26. You buy a litre of Milk. You also buy a packet of coffee. The purchase of coffee is known as a. Autonomous Demand b. Derived Demand c. Market Demand d. New Demand 27. Coffee, Milk and Sugar are known as a. Producer Goods b. Perishable Goods c. Substitutes d. Complementaries 28. A rise in excise duty on car will result in a. Extension of Demand b. Contraction of Demand c. Incrase of Demand d. Decrease of Demand 29. Which of the following statements describes the exceptions to Law of Demand? a. When the Price of a commodity increases the Demand for the commodity increases. b. When the Demand for the commodity increases the Price for the commodity decreases c. When the Demand for the commodity decreases the Price for the commodity increases d. When the Price of the commodity decreases the Demand for the commodity increases. 30. When the Consumer buys less of same goods when the price of the commodity increases the demand is known as a. Extension of Demand b. Contraction of Demand c. Increase of Demand d. Decrease of Demand 31. People whose incomes are low purchase more of inferior commodity when its prices rise. Such goods are known as a. Veblen Goods b. Giffen Goods c. Producer Goods d. Temporary Goods 32. People with high incomes purchase luxurious goods even though the price of goods Page 3

4 increases. Such goods are known as a. Veblen Goods b. Giffen Goods c. Producer Goods d. Temporary Goods 33. Law of Demand states a. When the Price of a commodity decreases the Demand for the commodity increases b. When the Demand for the commodity increases the Price for the commodity decreases c. When the Demand for the commodity decreases the Price for the commodity increases d. When the Price of the commodity increases the Demand for the commodity increases. 34. Price is _ proportional to the Quantity Demanded a. Directly b. Inversely c. Equally d. Unequally 35. When the Consumer buys more of same goods at the same price the demand is known as a. Extension of Demand b. Contraction of Demand c. Increase of Demand d. Decrease of Demand 36. When the Consumer buys less of same goods at the same price the demand is known as a. Extension of Demand b. Contraction of Demand c. Increase of Demand d. Decrease of Demand 37. When the Consumer buys more of same goods when the price of the commodity decreases the demand is known as a. Extension of Demand b. Contraction of Demand c. Increase of Demand d. Decrease of Demand 38. When the Price of Commodity X goes up, what will be the effect on the quantity of the substitute Commodity Y. a. The quantity demanded of Commodity Y goes up. b. The quantity demanded of Commodity Y goes down. c. The quantity demanded of Commodity Y remains unchanged. d. There won't be any relationship between Commodity X and Y. 39. When the Price of Commodity X goes down, what will be the effect on the quantity of the complementary Commodity Y. a. The quantity demanded of Commodity Y goes up. b. The quantity demanded of Commodity Y goes down. c. The quantity demanded of Commodity Y remains unchanged. d. There won't be any relationship between Commodity X and Y. 40. When the percentage change in the quantity demanded is equal to the percentage change in the price, the elasticity is known as a. Infinite Elasticity b. Relatively Elastic c. Unit Elasticity d. Relatively Inelastic 41. When the percentage change in the quantity demanded is greater than the percentage change in income, the Income Elasticity of Demand is known as a. Relatively Inelastic b. Unit Elasticity Page 4

5 c. Relatively Elastic d. Highly Elastic 42. When the percentage change in the quantity demanded is zero when compared to the change in price, the price Elasticity of Demand is known as a. Highly Inelastic b. Relatively Inelastic c. Unit Elasticity d. Relatively Elastic 43. Elasticity of Demand is Defined as a. Proportionate change in Demand in relation to change in any other parameter. b. Proportionate change in Price in relation to change in any other parameter. c. Proportionate change in Income in relation to change in any other parameter. d. Proportionate change in Price of substitute to change in any other parameter. 44. Least squares method is a. Trend projection Method b. Barometric technique c. Simultaneous equations method d. Correlational Method 45. Price Elasticity of Demand is a. Percentage change in price to the percentage change in income b. Percentage change in income to the percentage change in price c. Percentage change in the quantity demanded to the percentage change in price d. Percentage change in the Advertisement expenditure to the percentage change in price. 46. The Income Elasticity of Demand is a. Percentage change in quantity demanded to the percentage change in income b. Percentage change in income to the percentage change in price c. Percentage change in the quantity demanded to the percentage change in price d. Percentage change in the Advesrtisement expenditure to the percentage change in price. 47. Cross Elasticity of Demand is a. Percentage change in price to the percentage change in income b. Percentage change in income to the percentage change in price c. Percentage change in the quantity demanded of Commodity X to the percentage change in price of Commodity Y d. Percentage change in the Advertisement expenditure to the percentage change in price. 48. Advertisement Elasticity of Demand is a. Percentage change in price to the percentage change in income b. Percentage change in income to the percentage change in price c. Percentage change in the quantity demanded of Commodity X to the percentage change in price of Commodity Y d. Percentage change in the Quantity Demanded to Percentage change in Advertisement expenditure. 49. Where the Income Elasticity of Demand for a Commodity X is less than one, the commodity is known as a. Normal Goods b. Inferior Goods c. Superior Goods d. Temporary Goods. 50. Where the Cross Elasticity of Demand for a Commodity X is less than one, the commodity is known as a. Substitutes b. Complements c. Superior Goods d. Temporary Goods. 51. Where the Income Elasticity of Demand for a Commodity X is greater than one, the commodity is known as a. Normal Goods Page 5

6 b. Inferior Goods c. Superior Goods d. Temporary Goods. 52. The quantity demanded of a commodity is 10,000 when the price of the commodity is Rs.1,000/-. But when the price of the commodity falls to Rs.800/- the quantity demanded rises to 16000/- units. What is the Price Elasticity of Demand. a. 3 b. 6 c. -3 d The quantity demanded of a commodity is 10,000 when the income of the consumer is Rs.1,000/-. But when the income of the falls to Rs.800/- the quantity demanded falls to 8000 units. What is the Income Elasticity of Demand. a. 1 b. D:\mefa\mef a\ M03BX1.gif c. D:\mefa\mef a\ M03C X1.g i f d The quantity demanded changes from 100 Kgs to 150 Kgs when the Price Changes from Rs.10 to Rs.8. The Elasticity of Demand is a. 2 b. 2.5 c. d If the Elasticity of Demand is more than 1 and less than infinity it is known as a. Highly Elastic b. Highly Inelastic c. Relatively Elastic d. Relatively Inelastic 56. The quantity demanded changes from 100 Kgs to 150 Kgs when the Price Changes from Rs.10 to Rs.5. The Elasticity of Demand is a. -1 b. 2.5 c. 1 d Relatively Elastic is represented as a. D:\mefa\mef a\ S04AX1.gif b. D:\mefa\mef a\ S04BX1.gif c. =1 d The elasticity between two separate points of demand curve is called as a. Infinite Elasticity b. Unit Elasticity c. Arc Elasticity Page 6

7 d. Zero Elasticity 59. You are manufacturing a Product that is a close substitute for a branded product in the market. If your product sales has to increase what should be the kind of Elasticity of Demand? a. Price Elasticity of Demand b. Income Elasticity of Demand c. Cross Elasticity of Demand d. Advertisement Elasticity of Demand 60. You are manufacturing a Luxury Good like Jewellery. What Elasticity of Demand you will concentrate on? a. Price Elasticity of Demand b. Income Elasticity of Demand c. Cross Elasticity of Demand d. Advertisement Elasticity of Demand 61. Where the product has more number of substitutes, the demand is said to be a. Inelastic b. Elastic c. Unit d. Infinite 62. Where the product is complementary, the demand is said to be a. Relatively Inelastic b. Elastic c. Unit d. Infinite 63. What will be the impact on Demand for Commodity like SALT for the Price changes? a. Inelastic b. Elastic c. Unit d. Infinite 64. For rice, where it is a necessiy, the demand is said to be a. Inelastic b. Elastic c. Unit elastic d. Infinitely elastic 65. For gold,where it is a Luxury, the demand is said to be a. Highly Elastic b. Highly Inelastic c. Relatively Inelastic d. Relatively Elastic 66. If the price of Electricity, where the number of alternative uses are more, rises, the demand is said to be a. Highly Elastic b. Highly Inelastic c. Relatively Inelastic d. Relatively Elastic 67. Where the consumption of a product can be postponed, the demand is said to be a. Inelastic b. Elastic c. Unit d. Infinite 68. In the case of TV sets, the what will be Demand, if the price of TVs decline? a. Inelastic b. Elastic c. Unit d. Infinite 69. The Product range of Amul includes Ice creams, cheese, butter, packed milk, Page 7

8 chocolates, gulab jamun etc., If we try to find the demand for all the products it is known as a. Short-term Demand b. Long-term Demand c. Firm Demand d. General Demand 70. The Product range of Amul includes Ice creams, cheese, butter, packed milk, chocolates, gulab jamun etc., If we try to find the demand for one of the products it is known as a. Short-term Demand b. Long-term Demand c. Firm Demand d. Specific Demand 71. Finding the Demand for particular brand Cars of Maruti in the entire country is a. Short-term Demand b. Long-term Demand c. Firm Demand d. General Demand 72. Finding the Demand for Cars of newly established Car factory is a. Short-term Demand b. Long-term Demand c. Firm Demand d. New Demand 73. Finding the Demand for particular brand Cars which are already being sold in the country is a. Short-term Demand b. Long-term Demand c. Established Demand d. General Demand 74. Demand forecast for the total sales of the company is a. Short-term Demand b. Long-term Demand c. Firm Demand d. General Forecast 75. Demand Forecast for a period of 20 years is a. Long-term Demand b. Firm Demand c. Industry Demand d. Specific Demand 76. Demand forecast for a particular product of the company is a. Firm Demand b. Industry Demand c. Specific Demand d. General Demand 77. Finding the Demand for Cars in the entire country is a. Short-term Demand b. Long-term Demand c. Industry Demand d. General Demand 78. Finding the Demand for raincoats for the rainy season in the entire country is a. Short-term Demand b. Long-term Demand c. Industry Demand d. General Demand 79. Where the Demand Forecasting is done by manipulating the major determinants of the demand to suit the tastes and preferences, such forecasting is known as a. Trend Line Method Page 8

9 b. Short-term Method c. Controlled Experiment Method d. Judgemental Method 80. Census Method is also known as a. Total Enumeration Method b. Judgemental Method c. Short-term Method d. Industry Demand 81. The daily sales for the first five days of January is 40, 44, 48, 45, 55 (in thousands). What is the first value of three day moving average? a. 44 b. 45 c d When the Demand Forecasting is done for only Scooters manufactured by Bajaj Scooters, the Demand Forecasting is known as a. Industry Demand b. Firm Demand c. Test Marketing d. Expert Opinion 83. Where the Demand Forecasting is done based on the past data by extrapolating the same, the Demand Forecasting is known as a. Trend Line Method b. Least Square Method c. Firm Demand d. Expert Method 84. If a survey is being conducted in a particular City for the entire population, the Forecasting Method is known a. Census Method b. Sample Method c. Sales Force Method d. Expert Opinion Method 85. If a survey is being conducted for a small group in the entire population, the Forecasting is known as a. Census Method b. Sales Force Method c. Expert Opinion Method d. Sample Method 86. When the Demand Forecasting is done with the help of Experts in Selling the product, the Forecasting is known as a. Sales Force Method b. Expert Opinion Method c. Test Marketing d. Sample Method 87. When the Demand Forecasting is done by Selling the product manufactured to a small group of customers, this method of Forecasting is known as a. Sales Force Method b. Test Marketing c. Least Square Method d. Expert Opinion Method 88. When the Demand Forecasting is done by the management on its own experience, the Method of Demand Forecasting is known as a. Judgemental Approach b. Controlled Experiments c. Sales Force Method d. Expert Opinion Method Page 9

10 89. In the first stage of Production Function with One Variable Input, a. Average Production is greater than Total Production b. Average Production is greater than Marginal Production. c. Average Production is Less than Marginal Production d. Marginal Production is greater than Total Production. 90. Marginal Production is a. Additional Production obtained by the addition of Two Units. b. Additional Production obtained by the addition of one Unit. c. Additional Production obtained by the reduction of One Unit. d. Additional Production obtained by the reduction of Two Units 91. Production Function with one Variable Input, how many factors of production are varied. a. One b. Two c. Three d. Four 92. In the first stage of Production Function with One Variable Input, Total Production a. Increases b. Decreases c. Constant d. Negative 93. In the first stage of Production Function with One Variable Input, a. Marginal Production is greater than Total Production b. Marginal Production is greater than Average Production. c. Marginal Production is Less than Average Production d. Average Production is greater than Total Production. 94. is a factor of Production a. Gold b. Machinery c. Land d. Building 95. is a factor of Production a. Capital b. Plant c. Car d. Building 96. Wages is a return for a. Land b. Labour c. Capital d. Enterprise 97. Interest is a return on a. Land b. Labour c. Capital d. Enterprise 98. Rent is a return on a. Land b. Labour c. Capital d. Enterprise 99. One combination of factor X and factor Y is 1 and 22 and another combination of factor X and Y is 2 and 12. What is the MRTS? a. 1:10 b. 1:32 c. 2:32 Page 10

11 d. 1: If the price of Factor X is 5 and the price of Factor Y is Rs.8 and the budget is Rs.400 then which of the following combination of factors is taken to draw the isocost line. a. X = 100 Y = 100 Units. b. X = 80 Y = 50 Units c. X = 100 Y = 80 Units d. X = 40 Y = 50 Units 101. Isoquant refers to the curve in which the a. production is same for different combinations of two factors b. production is not same for different combinations of two factors. c. production is same for different combinations of one factor d. production is same for different combinations of one factor 102. One combination of factor X and factor Y is 1 and 30 and another combination of factor X and Y is 2 and 22. What is the MRTS? a. 1:30 b. 1:22 c. 2:30 d. 1: If the price of Factor X is 4 and the price of Factor Y is Rs.5 and the budget is Rs.400 then which of the following combination of factors is taken to draw the isocost line. a. X = 100 Y = 100 Units. b. X = 80 Y = 100 Units c. X = 100 Y = 80 Units d. X = 40 Y = 50 Units 104. The Isocost line is a. Horizontal Straight Line to X-Axis b. Parallel Straight Line to Y-axis. c. Downward Sloping Curve. d. Upward Sloping Curve 105. Least cost combination of two factors of production is a. Where the Isocost line is tangent to Isoquant. b. Where the Isocost line intersects Isoquant c. Where two Isocost lines overlap each other d. Where two Isoquant lines overlap each other Isoquant means a. Equal quantity b. Downward sloping c. Do not interest d. Convex to origin 107. Acronym for MRTS is a. Marginal Rate of Technical Substance. b. Marginal Right of Technical Substance. c. Marginal Rate of Technical Substitution d. Mechanical Rate of Technical Substitution 108. Isoquant curve a. They intersect with each other b. They are concave to the origin c. They do not intersect axis d. They are upward sloping curves Isocost is a curve a. Where different costs are plotted for one factor combination. b. Where same costs are plotted for for one factor combination c. Where different costs are plotted for two factor combination. d. Where same costs are plotted for for two factor combination Page 11

12 110. A company is located in a remote place and in around, it has no other company for a distance of 20 Kms. What economy will the company lose? a. Managerial Economies b. Commercial Economies c. Economies of Concentration d. Marketing Economies 111. A company is located in a remote place and in around, it has no canteen or medical facilities. The company is forced to provide housing, canteen, medical facilities on its own. What economy will the company lose? a. Economies of Concentration b. Economies of Welfare c. Marketing Economies d. Technical Economies 112. Companies which do the same kind of business and situated at one particular place will have the facility of setting up Research and Development Facilities. This Economy of operation is known as a. Economies of Concentration b. Economies of Welfare c. Financial Economies d. Economies of Research and Development 113. Companies which are situated in one place, will have the economies on account of facilities like canteen, Buses, Medical Facilities etc., This economy of operation is known as a. Economies of Concentration b. Economies of Welfare c. Financial Economies d. Economies of Research and Development 114. A company like BHEL does business in crores of rupees. The purchases of this company likewise runs into crores of rupees and it has the advantage of bargaining and getting quantity discounts on all its purchases. This economy is known as a. Managerial Economies b. Commercial Economies c. Financial Economies d. Marketing Economies 115. Functional specialization ensures minimum wastage and lowers the cost of production in the long-run. Such Economies are known as a. Managerial Economies b. Commercial Economics c. Economies of Concentration d. Marketing Economies 116. Where the volume of purchases increase, it results in quantity discounts. Such Economies are known as a. Managerial Economies b. Commercial Economies c. Financial Economies d. Marketing Economies 117. Where the large amounts are borrowed from the Financial Institutions, the Banks consider giving reduced interest rates. Such Economies are known as a. Managerial Economies b. Commercial Economies c. Financial Economies d. Marketing Economies 118. Where the increased production levels are a result of the sophistication in machinery and the personnel who are hired to handle such machinery, such economies of scale are known as a. Managerial Economies Page 12

13 b. Financial Economies c. Technical Economies d. Risk-bearing Economies 119. When the Industries of the same type are situated in a particular place, such situation results in Economies known as a. Economies of Concentration b. Technical Economies c. Financial Economies d. Commercial Economies 120. The production is increased from 1000 units to 1500 units. The excess costs incurred for 500 units is known as a. Replacement Cost b. Opportunity Cost c. Incremental Cost d. Out-of-pocket Costs 121. You go to a Electronic Shop and buy a TV. The shopkeeper delivers the same to your residence. The costs incurred by the shop keeper are known as a. Explicit Costs b. Implicit Costs c. Historical Costs d. Uncontrollable Costs 122. Opportunity cost is a. Sunk cost b. Explicit cost c. The cost where the ''Cost of the next best alternative is foregone'' d. Replacement cost 123. As the output increases the Average Fixed Cost a. Increases. b. Decreases. c. At first decreases and then increases. d. At first increases and then decreases What is Replacement Cost? a. The Cost that is not recorded in the Books of Accounts. b. Cost of foregone opportunity. c. Cost of Replacing an Existing Asset d. Cost which is incurred but not recorded in the Books The costs which have already been incurred and cannot be controlled are called as a. Historical Costs b. Uncontrolled Costs c. New Costs d. Replacement Costs 126. In cost-output relationship in the short run, as the output increases the fixed cost a. Increases with production b. Remains same with production. c. At first decreases and then increases. d. At first increases and then decreases In cost-output relationship in the short run, as the output increases the Average Variable Cost a. Increases with production b. Remains same with production. c. At first decreases and then increases. d. At first increases and then decreases What is the Opportunity Cost? a. The Cost is recorded in the Books of Accounts. Page 13

14 b. Cost of best alternative foregone. c. Opportunity Cost increases with production. d. Opportunity Cost decreases with production What is Average Total Cost? a. Total Fixed Cost/Quantity. b. Total Variable Cost/Output c. Marginal Cost/Output d. Total Cost/Output 130. What is Average Fixed Cost? a. Total Fixed Cost/Quantity. b. Total Variable Cost/Output c. Marginal Cost/Output d. Total Cost/Output 131. The Selling Price is Rs.10/-, the Variable Cost is Rs.8/- and the Fixed Cost is Rs.50,000/-. The Actual Sales is Rs.4,00,000/-. What is the Margin of Safety? a. Rs.1,50,000/- b. Rs.2,00,000/- c. Rs.2,50,000/- d. Rs.3,50,000/ When you plot Fixed Cost on the Charts how will it look like? a. Parallel Line to X-axis b. Parallel Line to Y-axis c. Downward Sloping Curve d. Upward Sloping Curve 133. The Selling Price is Rs.10/-, the Variable Cost is Rs.8/- and the Fixed Cost is Rs.50,000/-. What is the Break-even Point in value? a. Rs.5,00,000/- b. Rs.2,50,000/- c. Rs.25,000 /- d. Rs.12,500/ The Selling Price is Rs.10/-, the Variable Cost is Rs.8/-. Fixed Cost is Rs.50,000/-, What is the Contribution? a. Rs.5,000/- b. Rs.1,250/- c. Rs.2/- d. Rs.5/ What is the formula for calculating P/V Ratio a. Selling Price/Contribution b. Contribution/Selling Price c. Variable Cost/Selling Price d. Fixed Cost/Selling Price 136. Break-even Point is a. Fixed Cost/Variable Cost b. Variable Cost/Contribution c. Fixed Cost/Contribution d. Selling Price/Contribution 137. Margin of Safety is a. Actual Sales - Breakeven Sales b. Breakeven Sales - Actual Sales c. Breakeven Sales - Fixed Cost d. Fixed Cost - Breakeven Sales 138. What is Contribution a. Total Fixed Cost + Variable Cost. b. Selling Price-Variable Cost. c. Variable Cost-Selling Price. d. Total Fixed Cost - Variable Cost Page 14

15 139. The Selling Price is Rs.10/-, the Variable Cost is Rs.8/- and the Fixed Cost is Rs.50,000/-. What is the Break-even Point in units? a units b units c units d units 140. The Selling Price is Rs.10/-, the Variable Cost is Rs.8/-. What is the P/V Ratio? a. 1/5 b. 4/5 c. 5/4 d The markets in which only bulk quantities are bought and sold, it is known as a. Retail Market b. Wholesale Market c. Geographic Market d. Competitive Market 142. What is the type of market, the Rythu Bazar is known as a. Retail Market b. Wholesale Market c. Geographic Market d. Competitive Market 143. Railways in a good example of which type of Competition? a. Monopoly b. Monopolistic Competition c. Oligopoly d. Duopoly 144. When the market is divided into North, South, East and West, the division is known as a. Retail Market b. Wholesale Market c. Geographic Market d. Competitive Market 145. Where the goods and services are sold through the Internet, the Market is known as a. Wholesale Market b. Virtual Market c. Geographic Market d. Physical Market 146. Market is a place a. Where only buyers exist. b. Where only sellers exist c. Where both buyers and sellers exist. d. Where neither the buyer nor the seller exist Market is a place a. Where only buyers exist. b. Where only sellers exist c. Where there is a commodity d. Where neither the buyer nor the seller exist Market is a place a. Where only buyers exist. b. Where only sellers exist c. Where there is competition d. Where neither the buyer nor the seller exist Which of the following is a Perfect Competition a. Monopoly b. Monopolistic Competition c. Oligopoly Page 15

16 d. Pure Competition Which of the following is a feature of Monopolistic Competition? a. Homogenous Product b. Only one seller. c. No Barriers to free entry. d. No close substitutes 151. A market where there are many firms and each one produces such goods and services that are close substitutes to each other, is known as a. Monopoly b. Duopoly c. Monopolistic Competition. d. Oligopoly 152. The Total Revenue is a. Total Revenue / Revenue b. Price per Unit X quantity c. Total Revenue / Quantity d. ITotal Revenue/IQuantity 153. The Marginal Revenue is a. Total Revenue / Revenue b. Price per Unit X quantity c. Total Revenue / Quantity d. JTotal Revenue/JQuantity 154. Which of the following Organizations falls under the category of Monopoly? a. Oil Industry b. Sugar Industry c. Railways d. Petrol Industry 155. Which of the following is a feature of Perfect Competition? a. There is only one seller. b. Large number of buyers and sellers c. There are two sellers. d. No close substitutes 156. Which of the following is a feature of Perfect Competition? a. There are no close substitutes b. There is only one seller c. Absence of Transportation Charges d. Seller can determine his own price Market where there is a single buyer is known as a. Monopsony b. Monopoly c. Duopoly d. Oligopoly 158. Which of the following is a feature of Monopoly? a. Homogenous Product b. Large number of buyers and sellers c. No Transport charges d. No close substitutes 159. The Average Revenue is a. Total Revenue / Revenue b. Price per Unit X quantity c. Total Revenue / Quantity d. I Total Revenue/IQuantity 160. When there are Super Normal Profits in a Perfect Competition, what will be the consequences that will follow a. The number of the firms in the industry will remain constant. b. More number of firms enter the market Page 16

17 c. More number of firms leave the market d. Less number of firms will leave the market When there are Super Normal Losses in the Perfect Competition, what consequences will follow: a. The number of firms in the industry will remain constant. b. More number of firms will leave the market. c. More number of firms will enter the market. d. Less number of firms will enter the market In a Perfect Competition when the Marginal Revenue curve is tangent to the Marginal Cost curve, which of the following statements will be true? a. There are abnormal profits for the firm. b. There are normal profits for the firm. c. There are no profits and no losses for the firm. d. There are losses for the firm In a Perfect Competition when the Marginal Revenue curve is lying below the Marginal Cost curve, which of the following statements will be true? a. There are abnormal profits for the firm. b. There are normal profits for the firm. c. There are no profits and no losses for the firm. d. There are losses for the firm The price-output relationship in the long run in a Perfect Competition which of the following statements will be true? a. Short-run Marginal Cost Curve Cuts the Long run Marginal Revenue Curve from below. b. Long run Marginal Revenue Curve is tangent to Long run Marginal Cost Curve. c. Long run Marginal Revenue Curve is tangent to Long run Average Cost Curve. d. Short-run Average Cost Curve cuts the Long run Marginal Revenue Curve from below In a Perfect Competition a. TR=AR b. AR=MR=Price c. Total Revenue = Marginal Revenue d. I Total Revenue = I Quantity 166. In a Perfect Competition a. The buyer is the Price Maker b. The seller is the Price Maker c. The seller is the Price Taker d. The buyer is the Price Taker The Principle of Equilibrium Point is a. Marginal Cost must cut Marginal Revenue from above. b. Marginal Cost must cut Marginal Revenue from below. c. Marginal Revenue must cut Marginal Cost from above. d. Marginal Revenue must cut Marginal Cost from below 168. The Principle of Equilibrium Point is a. MC=MR b. MC<MR c. MC>MR d. TR=MR 169. In a Perfect Competition the Marginal Revenue Line is a. Downward Sloping Curve b. Upward Sloping Curve c. Parallel to X-axis d. Parallel to Y-axis 170. In a Monopoly, the profits will be maximized at the following point. a. Where the Average Cost Curve Intersects Marginal Revenue Curve b. Where the Average Cost Curve Intersects Average Revenue Curve. c. Where the Marginal Cost Curve Intersects Marginal Revenue Curve. d. Where the Marginal Cost Curve Intersects Average Revenue Curve. Page 17

18 171. Monopoly is Socially undesirable because a. Of Efficient Allocation of resource b. Of Exploitation of Customers. c. Gap between the rich and poor is reduced. d. Unlimited Output is generated The Price Discrimination can be followed when a. The purchasing power of the customer is high. b. The purchasing power of the customer is low. c. There is no purchasing power of the customer. d. The customer can exercise choice 173. The Price Discrimination is advantageous because a. The challenges of the competitors can be met. b. The challenges of the competitors cannot be met. c. The surplus production cannot be disposed off. d. It cannot lead to increased demand In Monopoly, the demand curve can be represented by a. Marginal Revenue Curve b. Average Revenue Curve. c. Marginal Cost Curve d. Average Cost Curve In a Monopoly, what are the characteristics of Marginal Revenue Curve a. Marginal Revenue Curve slopes upwards b. Marginal Revenue is a Horizontal Straight Line. c. Marginal Revenue Curve lies below Average Revenue Curve. d. Marginal Revenue Curve lies above Average Revenue Curve 176. In a Monopoly, what are the characteristics of Average Revenue Curve a. Marginal Revenue Curve and Average Revenue Curve slopes upwards b. Marginal Revenue and Average Revenue Curves are a Horizontal Straight Line. c. Average Revenue Curve lies above Marginal Revenue Curve. d. Marginal Revenue Curve lies above Average Revenue Curve 177. In a Monopoly, the Average Revenue Curve a. Slopes upward from left to right. b. Slopes downwards from left to right. c. Parallel to X-axis. d. Parallel to Y-axis In a Monopoly, the Marginal Cost Curve a. Intersects the Marginal Revenue Curve from above. b. Intersects the Average Cost Curve first and then intersects Marginal Revenue Curve later. c. Does not intersect Marginal Revenue Curve. d. Intersects the Marginal Revenue Curve from below When a firm sells its products to its customers of different profile at different prices with no corresponding change in cost, it is said a. Income Discrimination. b. Price Discrimination. c. Cost Discrimination. d. Profit Discrimination The pricing strategy where a firm charges a fixed fee for the right to purchase its goods, plus a per unit charge for each unit purchased. a. Market skimming b. Market penetration c. Two part pricing d. Block Pricing The method of quoting selling price by finding the average cost at normal output and adding the normal profit to it is known as a. Cost Plus Pricing. b. Sealed Bid Pricing. Page 18

19 c. Marginal Cost Pricing. d. Going Rate Pricing The Pricing done with an intention to increase the volume and the margin of profit is known as a. Market skimming b. Market penetration c. Two part pricing d. Block Pricing The objective of Pricing is a. To Maximize Profits. b. To reduce the Sales c. To reduce the Market Share. d. To create more competitors Selling price is fixed in such a way that it always covers fully the variable cost. This method of pricing is known as a. Cost plus pricing. b. Marginal Cost Pricing. c. Sealed Bid Pricing. d. Going Rate Pricing The method of quoting the price through a Tender is known as a. Cost Plus Pricing. b. Sealed Bid Pricing. c. Marginal Cost Pricing. d. Going Rate Pricing During seasonal period when demand is likely to be higher, a firm may enhance profits by pricing a product high during this period. This method of Pricing is known as a. Commodity Bundling b. Peak Load Pricing c. Cross Subsidization d. Block Pricing 187. Pricing a product for selling certain number of units of a product as one package is known as a. Market skimming b. Market penetration c. Two part pricing d. Block Pricing The method of quoting the price through the prevailing market price is known as a. Cost Plus Pricing. b. Sealed Bid Pricing. c. Marginal Cost Pricing d. Going Rate Pricing 189. The price is fixed on the basis of the perception of the buyer of the value of the product is known as a. Price Discrimination b. Demand Pricing c. Perceived Value Pricing. d. Going Rate Pricing. Page 19