"Managerial Economics: Bridging Economic Theory with Business Decision-Making"
                     EDUCATION LUCK                          MAN. ECONOMICS                              09802343890
 
Question:- Government can increase the domestic supply of food grain by way of larger
Answer:- Imports
Question:- An individual's demand for a commodity is generally determined by factors such 
as
Answer:- Price of the product, Income, Tastes and Habits
Question:- Macro economics aggregates are:
Answer:- National income, total investment. Employment
Question:- Gross profit is used for payment of:
Answer:- Remuneration to factors of production, depreciation, maintenance charges
Question:- Aggregate supply function is positively sloped curve that becomes perfectly 
inelastic subsequently
Answer:- FALSE
Question:- Price elasticity of demand is measured by using which of the following formula?
Answer:- % change in quantity demanded / % change in price
Question:- General forecasts
Answer:- Total Picture of the demand
Question:- Specific Forecasts
Answer:- Forecasts of each of the product
Question:- Capital Goods
Answer:- Derived Demand
Question:- Durable Goods
Answer:- Demand can be postponed
Question:- With improvement in technology, with the given inputs, the level of output:
Answer:- remains constant
Question:- Opportunity cost is the:
Answer:- Implicit cost
Question:- The traditional concept of equilibrium of a firm is:
Answer:- Break-even point
Question:- The term "elasticity of demand", when used without qualifications is commonly 
referred to as price elasticity of demand:
Answer:- TRUE
Question:- types of Income Elasticity of Demand
Answer:- Negative Income Elasticity, Zero Income Elasticity, Unit Income Elasticity, Low 
Income Elasticity of demand. High Income Elasticity
Question:- Disinvestment
Answer:- Sale of government shareholding
EDUCATION LUCK                          MAN. ECONOMICS                              09802343890
Question:- Dual Pricing
Answer:- Charging two different prices from rich and poor
Question:- Deficit Financing
Answer:- Increase supply of money
Question:- Fiscal deficit
Answer:- Gap between public expenditure and public revenue
Question:- With improvement in technology, with the given inputs, the level of output :
Answer:- Remains unchanged
Question:- Cost plus pricing method assumes that cost can be allocated to:
Answer:- Individual Products
Question:- Managerial economics                            
Answer:- Helps in demand forecasting 
Question:- It is assumed that units of variable factor are divisible into ____________ units
Answer:- Homogeneous 
Question:- The other approaches to pricing are:
Answer:- Intuitive Pricing, Experimental Pricing, Imitative Pricing
Question:- PDS helps to hold the prices 
Answer:- Down
Question:- Demand for a commodity depends on one factor
Answer:- FALSE
Question:- Fiscal Policy involves variations in :
Answer:- Public Expenditure, Taxation
Question:- Expected costs are based on the ___________ of production and prices
Answer:- Forecasts
Question:- Substantial reduction in the cost of production of a firm because of the use of 
improved and up-to -date machinery is an example of economy known as
Answer:- Technical
Question:- Cash Reserve Ratio is a tool of monetary control:
Answer:- TRUE
Question:- One of the monetary measures
Answer:- Variations in CRR
Question:- Equilibrium is the stage of
Answer:- maximum satisfaction , balance , stationary
EDUCATION LUCK                          MAN. ECONOMICS                              09802343890
Question:- AFC is the per unit fixed cost of production which is calculated
Answer:- AFC = TFC / Units of output 
Question:- Total cost of production is:
Answer:- Total fixed cost, Total Variable cost
Question:- Advertising forms an interval part of decision making and                             :
Answer:- Forward planning 
Question:- What fails to provide full employment?
Answer:- Market mechanism
Question:- Managerial economics is the hybrid of management and economics
Answer:- TRUE
Question:- Managerial economics is the hybrid of management and economics
Answer:- TRUE
Question:- Labors unions negotiate with the government regarding:
Answer:- Increase in wage rate, Increase in remuneration, o Increase in the retirement age
Question:- Exception of the law of diminishing returns is
Answer:- New methods of cultivation
Question:- Demand forecasts for a period of more _____________ years are based on Time-
series Analysis
Answer:- 2 to 3
Question:- Economists usually consider three important kinds of elasticity of demand:
Answer:- TRUE
Question:- Right to information is one of the rights of consumer under the consumer 
protection act 1986
Answer:- TRUE
Question:- National income is studied as a part of macro economics:
Answer:- TRUE
Question:- The supply is always referred to in relation to:
Answer:- Price and time
Question:- Prof. J M Keynes wrote a book on
Answer:- employment, Interest, money
Question:- Investment for production depends on:
Answer:- Factor prices
Question:- Elasticity of demand has huge practical significance
Answer:- In formulation of price policy, in tax fixation, and in studding growth trend
Question:- An economic problem is such that it is faced by a simple hetman as well as a 
movie star:    Answer:- FALSE
EDUCATION LUCK                          MAN. ECONOMICS                              09802343890
Question:- Under Perfect competition each seller makes _________ profit in the long run
Answer:- Normal
Question:- Over years it has been observed that the relation between plan and non plan 
expenditure is that:
Answer:- Both are equal
Question:- Public goods carry features such as principle of:
Answer:- Non exclusion, indivisible
Question:- Keynes established a ___________ relationship between income and 
consumption
Answer:- Direct
Question:- Market period
Answer:- Perishable goods
Question:- Long run
Answer:- Non perishable goods
Question:- Perfect competition
Answer:- Automatic price mechanism
Question:- Equilibrium price
Answer:- Demand and supply
Question:- Marginal efficiency of capital is estimated taking into account:
Answer:- Prospective yield from a particular asset, o Supply price of that asset
Question:- Features of short-run period are
Answer:- Supply of goods can be adjusted to the demand to some extent, Supply and 
demand determine the price, Some factors can be changed
Question:- When Supply increases, demand remaining the same, the equilibrium price           
:
Answer:- Falls 
Question:- Principle of _________ is associated with Private goods:
Answer:- Exclusion
Question:- Changes in demand curve occurs:
Answer:- due to festival, on account of growth of population, on account of some other factor
Question:- Characins different prices to different customer for the same product is called        
Answer:- Price discrimination
Question:- IN the long run under perfect competitive market earns
Answer:- Normal profits
Question:- A monopolist is a price taker
Answer:- TRUE
EDUCATION LUCK                          MAN. ECONOMICS                              09802343890
Question:- It is necessary to collect the information regarding the expected expenditure of the
consumers in order to
Answer:- Anticipate expected sales
Question:- While deciding price, cost plus pricing method considers fixed and variable cost 
and a certain percentage of profit:
Answer:- TRUE
Question:- ___________  production function assumes constant returns to scale:
Answer:- Linear homogeneous
Question:- Features of monopoly are:
Answer:- Single producer, o Barriers to entry, o No close substitute to the product
Question:- Area specific demand forecasts give the forecasts:
Answer:- each of the markets for the firm's product
Question:- Product-specific demand forecasts give the forecasts for
Answer:- each of the products produced by the firm
Question:- All the buyers and sellers operating under perfect competition have perfect 
knowledge of
Answer:- Market conditions 
Question:- Which one of the following is an essential condition for monopoly to exist:
Answer:- Barriers to entry of firms
Question:- The real cost of production is called as
Answer:- Opportunity Cost
Question:- The concept of effective demand is
Answer:- Aggregate expenditure in the economy
Question:- In perfect competition firm gets super normal profit when:
Answer:- AR > AC (AR greater than AC)
Question:- The total output of all commodities in a country over a specific period, usually 
taken in a year, is called Net National Product
Answer:- False
Question:- Private goods are indivisible
Answer:- FALSE
Question:- Cost Plus pricing
Answer:- Objective approach to pricing
Question:- Going Rate Pricing
Answer:- Emphasizes market conditions
Question:- Marginal Cost Pricing
Answer:- Different from incremental cost pricing
Question:- Intuitive Pricing
Answer:- Psychological and subjective approach to pricing
EDUCATION LUCK                          MAN. ECONOMICS                              09802343890
Question:- The period of great depression was between 1914 and 1918
Answer:- FALSE
Question:- Labor unions negotiate with the government regarding:
Answer:- increase in the wage-rate, increasing remuneration, increasing, the retirement age
Question:- Law of variable proportion and laws of returns to scale are covered under the 
linear homogeneous production function:
Answer:- TRUE
Question:- The degree of elasticity determines the shape and slope of the
Answer:- Demand curve
Question:- The theory of production function can also explain the possibility of :
Answer:- Disguised unemployment
Question:- One of the monetary measures
Answer:- Variations in CRR
Question:- Micro economics studies the:
Answer:- Elasticity of demand, Marginal Revenue, Marginal cost
Question:- Under perfect competition there are large number of buyers and few sellers.
Answer:- False
Question:- One of the important determinants of supply:
Answer:- Willingness of seller
Question:- Maximum quantity of output that can be produced from any chosen quantities of 
various :
Answer:- Inputs
Question:- Aggregate Supply function represents
Answer:- Cost of production, supply price, cost of labor
Question:- VAT
Answer:- Value Added Tax
Question:- State Trading corporation
Answer:- Responsibility of importing and distributing edible oil
Question:- Administered prices
Answer:- Cost plus a stipulated margin of profit
Question:- New Industrial Policy
Answer:- 1991
Question:- Elasticity of demand of salt can be represented
Answer:- e=0
Question:- Perfectly competitive market has:
Answer:- Large number of buyers and sellers, Free entry & exit
EDUCATION LUCK                          MAN. ECONOMICS                              09802343890
Question:- Under the decreasing returns to scale, the marginal output curve slopes
Answer:- downward
Question:- Yamaha produces two wheelers such as:
Answer:- RX 100,  RX 135
Question:- The law of constant returns to scale is depicted by the marginal output curve 
which is
Answer:- Horizontal 
Question:- Joint demand includes
Answer:- Complementary goods, o Two or more goods consumed together, o Change in 
price of one good affects demand for the other good
Question:- If all factors are doubled, and output increases by more than double, then the 
returns to scale are
Answer:- Increasing
Question:- Origin of macro could be attributed to the writings of
Answer:- J M Keynes, depression of 1930
Question:- Individual demand schedule
Answer:- Is in tabular format, Shows the prices of goods, Shows the quantities of a 
commodity purchased
Question:- Individual demand schedule
Answer:- FALSE
Question:- Cable network provided by local cable operators is a private good
Answer:- TRUE
Question:- MP is less then AP, when AP is
Answer:- decreasing
Question:- The supply curve of labor is always:
Answer:- Backward Bending
Question:- The intersection of market demand and supply curve determines
Answer:- Market Price
Question:- Marginal Product is less than average product, then AP is
Answer:- Decreasing
Question:- Good example of monophony market could be:
Answer:- Purchase of Shaktiman trucks by the Indian Military
Question:- Price discrimination is possible when there are
Answer:- Legal sanctions
Question:- ___________ involves transformation of inputs into output:
Answer:- Art of production
EDUCATION LUCK                          MAN. ECONOMICS                              09802343890
Question:- Non price competition is possible if imitative pricing is followed
Answer:- TRUE
Question:- Percentage method
Answer:- Percentage change in quantity demanded / percentage change in price
Question:- Point elasticity method
Answer:- ?Q/?PXP/Q
Question:- Total outlay method
Answer:- Total Revenue = price per unit X quantity demanded
Question:- Point geometric method
Answer:- L/U
Question:- When we excessively employ only one factor in the production of a certain 
commodity, we reach a stage when the marginal product of that factor
Answer:- Zero
Question:- If the increase in all factors leads to a less than proportionate increase in output, 
then the return to scale are:
Answer:- Decreasing
Question:- The products sold by different sellers under pure competition are
Answer:- homogeneous
Question:- Sample of test markets is selected under experimental pricing
Answer:- TRUE
Question:- The stage of negative returns comes in when:
Answer:- TP decreases, MP negative, AP decreases
Question:- Profit means different things to different people.
Answer:- TRUE
Question:- Non price competition could involve:
Answer:- Giving gift articles
Question:- Assumption of free entry and exit is essential for a competitive market firm to be a 
price taker
Answer:- TRUE
Question:- Keynes in 1936 wrote " the general theory of output and income
Answer:- FALSE
Question:- Managerial economics deals with
Answer:- price system, resource allocation, capital budgeting
Question:- Effective demand is a point where aggregate demand is equal to aggregate 
supply:
Answer:- TRUE
EDUCATION LUCK                          MAN. ECONOMICS                              09802343890
Question:- Externalities could be:           Answer:- External, foreign, alien
Question:- Keynes prescribed macro economics as a policy oriented science dealing with 
unemployment and inflation:
Answer:- TRUE
Question:- If supply reduced
Answer:- demand being constant, price would rise
Question:- Perfectly elastic demand, is when e=8
Answer:- TRUE
Question:- inflation effects production through
Answer:- Investment, Switch over of Business, Poor Quality Output
Question:- Cable network provided by local cable operators is a private goods
Answer:- TRUE
Question:- market demand schedule is
Answer:- Aggregate of individual demand, demand at given period of time in a market, 
demand at different price in market
Question:- Perfectly elastic demand is denoted by _________________
Answer:- e=8
Question:- change in demand curve occurs
Answer:- On account of growth in population, due to change in supply
Question:- Other relevant measures used by Government of India to control Inflation include
Answer:- OGL (Open General License) import policy for importing certain goods, Excise cuts,
Adjustments in trade and tariff plan
Question:- Explicit costs, implicit costs and normal profits together from ________ of a firm
Answer:- Economic cost
Question:- distinction is made between invention and innovation by
Answer:- Joseph Schumpeter
Question:- Cross elasticity refers to the responsiveness of demand for a commodity to a 
given change in the price of a related commodity substitute or complementary
Answer:- TRUE
Question:- opportunity cost is _________________
Answer:- income foregone
Question:- According to Keynes economy always attains full employment
Answer:- FALSE
Question:- For financing economic development of India. One of the measures resorted to is
Answer:- Deficit Financing
Question:- Business cycles have following phases
Answer:- Expansion , Peak , Recession
EDUCATION LUCK                          MAN. ECONOMICS                              09802343890
Question:- Basic objectives of administered prices are
Answer:- To fix and maintain the prices of essential raw materials to avoid escalation, To 
ensure economic prices to uneconomic units so that the latter too can earn profits.
Question:- When cost of production is deducted from the total sales proceeds, the residual 
portion is called
Answer:- Gross Profit
Question:- Given the price, if the cost of production of a commodity decreases because of 
the use of improved technique of production, there will be increase in supply.
Answer:- TRUE
Question:- Demand for a commodity depends on the relative price of its
Answer:- substitute goods
Question:- Macro-level forecasts are used in
Answer:- in national economic planning
Question:- Expansion of demand
Answer:- movement on same demand curve
Question:- increase in demand
Answer:- Relationship between price and demand
Question:- D=f(P)
Answer:- Law of demand
Question:- Market demand curve
Answer:- Summation of individual demand curve
Question:- Income elasticity of demand is negative in case of _______________
Answer:- Geffen goods
Question:- As a firm expands beyond a certain limit, it becomes unmanageable and unwieldy
Answer:- TRUE
Question:- As a firm expands beyond a certain limit, it becomes __________ and unwieldy
Answer:- unmanageable
Question:- PUBLIC GOOD COULD BE
Answer:- Roads, Bridges, Public park
Question:- Costs may be classified as
Answer:- Production costs, Selling costs, other costs
Question:- The equilibrium price refers to the price at which demand and supply are
Answer:- Equal
Question:- one of the concepts of micro economics is
Answer:- Elasticity of demand
EDUCATION LUCK                          MAN. ECONOMICS                              09802343890
Question:- one of the concepts of micro economics is     Answer:- Elasticity of demand
Question:- Surplus of revenue over and above all paid out cost is
Answer:- Accounting Profit
Question:- The demand curve
Answer:- has a negative slope
Question:- Private goods carry feature such as
Answer:- Principle of exclusion, principle of divisibility
Question:- the total cost is summation of total fixed and total variable costs
Answer:- TRUE
Question:- A forecast is a guess or anticipation or a prediction about any event which is likely
to happen in the future.
Answer:- TRUE
Question:- A forecast is a guess or anticipation or a prediction about any event which is likely
to
Answer:- happen in the future
Question:- Black money can also be called
Answer:- An accounted money
Question:- LINEAR HOMOGENEOUS PRODUCTION FUNCTION assumes
Answer:- constant returns to scale
Question:- The forecasts based on Collective Opinion method are more accurate bacause
Answer:- The forecasts are based on information which is certain
Question:- Pure profit is considered to be a
Answer:- Short term phenomenon
Question:- Demand forecasting means Assessing the current demand and future demand
Answer:- TRUE
Question:- The Classical economists analysis of market is based on assumption of
Answer:- Perfect competition
Question:- Pricing is actually guided by the considerations of _______________
Answer:- Cost
Question:- The buyers and sellers may be away from each other and yet they may constitute 
a market over the telephone or ________________.
Answer:- internet
Question:- The buyers and sellers may be away from each other and yet they may constitute 
a market over the telephone or through the internet
Answer:- TRUE
Question:- Among various institutions associated with supplies to PDS are
Answer:- FCI, STC, IOC
EDUCATION LUCK                          MAN. ECONOMICS                              09802343890
Question:- Defect of market mechanism are
Answer:- Inequalities of income and wealth , Emergence of monopolies
Question:- Depreciation is the loss in value caused by the continuous use of
Answer:- an asset
Question:- It advisable to
Answer:- Keep profit rates low, Create an image, Act fair dealing
Question:- The price policy of public enterprises should enable it to operate at
Answer:- Least cost, maximum efficiency
Question:- Quantity purchased will depend upon
Answer:- Price
Question:- Disinvestment is linked with
Answer:- Denationalization, Privatization 
Question:- one of the fiscal measures includes keeping the revenue _______ Under check
Answer:- Deficit
Question:- FCI and other institutions have been set up to
Answer:- Buy agricultural products, Buy product at prices acceptable to farmers, Help 
stabilize agricultural process
Question:- A.P. = T.P./ variable factor units
Answer:- TRUE
Question:- Various methods of appraising investments include
Answer:- Pay Back period, Internal Rate of Return, Net Present Value
Question:- Increasing Returns explains
Answer:- Total product increases at an increasing rate , Marginal product increasing and it is 
maximum , Average product is increasing but it is below MP
Question:- Explicit costs
Answer:- labor cost
Question:- Implicit cost
Answer:- Opportunity cost
Question:- Nominal cost
Answer:- money cost
Question:- Accounting costs
Answer:- costs of production
Question:- Substantial reduction in the cost of production of a firm because of the use of 
improved and up-to-date machinery is an example of economy known as
Answer:- Technical
EDUCATION LUCK                          MAN. ECONOMICS                              09802343890
Question:- Plough Back Standard is socially less acceptable because
Answer:- Relies mainly on its own resources for its growth, Believes in having the necessary 
cash-on-hand at all times
Question:- Example of negative externality could be
Answer:- Smoke released in air causing air pollution, noise pollution. Water pollution
Question:- OGL stands for open General _______________
Answer:- License
Question:- consumer is wrongly biased against the
Answer:- Quality of a commodity
Question:- In short run at least one of the firms' input cannot be varied
Answer:- TRUE
Question:- Supply of kerosene to the PDS is handled by
Answer:- IOC, Hindustan petroleum, Bharat Petroleum
Question:- The production function does not explain the degree of substitution
Answer:- FALSE
Question:- Economic problems recognize boundaries of caste, creed, co lour, religion, 
culture, etc.
Answer:- FALSE
Question:- Government intervention, according to Keynes, is essential to ensure
Answer:- Full employment
Question:- Three motives identified by Keynes behind people holding cash for liquidity 
preference are
Answer:- the transactions motive , the precautionary motive , the speculative motive
Question:- Q = f ( N, L, K, T ) , this algebraic expression is used for
Answer:- Production Function
Question:- The algebraically representation of production is, Q = f (N, L, K, T)
Answer:- TRUE
Question:- Corporative management in India suffer on account of
Answer:- lack of professionalism, absence of marketing
Question:- Firm under perfect competition should cover at least average variable cost to 
continue its business in the market
Answer:- TRUE
Question:- The law of diminishing returns to scale examines the production function with 
_______Factor/s fixed
Answer:-  
Question:- and keeping other factors variables
Answer:- One
EDUCATION LUCK                          MAN. ECONOMICS                              09802343890
Question:- Study of prices of various inputs which make up the cost is
Answer:- cost-input relationship
Question:- Marginal cost is defined as an addition to cost caused an account of production of
an unit of a commodity
Answer:- TRUE
Question:- Features of Pure Competition are
Answer:- Large number of buyers and sellers , Homogeneous products , Free entry and free 
exit of firms
Question:- Dalai Street in Bombay is known as
Answer:- Bombay Stock Exchange
Question:- __________ Is a good example of monopoly in India
Answer:- Railways
Question:- A price that fluctuates as per the changes in market demand is
Answer:- Cyclical
Question:- imitative pricing involves following the pricing policy of other rival or competitive 
firm
Answer:- FALSE
Question:- Externalities
Answer:- Also termed as spill over effects
Question:- Principle of execution
Answer:- Indivisible goods
Question:- Pure public good
Answer:- those who pay the product get
Question:- Pure private good
Answer:- Principle of exclusion applies
Question:- A forecast at the level of _______ are prepared by the trade association
Answer:- An Industry
Question:- Monopoly emerging out of steady and consumption habits is called
Answer:- Competitive
Question:- Production function gives us an idea of the _______ of the output and the 
optimum employment of
Answer:-  
Question:- the variable inputs
Answer:- optimum level
Question:- Production function gives us an idea of the optimum level of the output and the 
optimum employment of the variable inputs
Answer:- TRUE
EDUCATION LUCK                          MAN. ECONOMICS                              09802343890
Question:- Production function gives us an idea of the
Answer:- optimum level of output
Question:- Features of the firm are
Answer:- It is a business unit organized under one ownership , It is a sole proprietorship , It is
a partnership or joint stock company
Question:- National income accounting helps one understand and evaluate
Answer:- growth performance of an economy overtime
Question:- Demand is determined by
Answer:- Price of the product , Relative prices of other goods , Tastes and habits
Question:- Chance profit rises in case of __________________.
Answer:- More demand
Question:- objectives of new Economic Policy are
Answer:- To increase the efficiency and international competitiveness of industrial 
production, To utilize foreign investment and technology to a much greater degree than in the
past, To improve the performance and rationalize the scope of the public sector
Question:- cost plus price includes
Answer:- TVC
Question:- Producer makes sure that the price of product, must cover
Answer:- Explicit costs
Question:- Formula of cost-input relationship is Q=A. L .a .k 1-1
Answer:- FALSE
Question:- One of the cost push factors causing factors causing price rise in india is 
Fluctuation in output and supply
Answer:- TRUE
Question:- Deficit financing leads to ___________ In money supply
Answer:- An increase
Question:- When a factor is employed, but is not contributing to its fullest available capacity
Answer:- Disguised unemployment
Question:- Possibility of and factor to replace another , to achieve the same level of output
Answer:- Degree of substitution
Question:- Advantages that accrue to a firm because of superior techniques and 
management
Answer:- Internal economies
Question:- Advantages which accrue to a firm because of factors that are external to the firm
Answer:- External economies
EDUCATION LUCK                          MAN. ECONOMICS                              09802343890
Question:- Reasons for change in Demand Increase or Decrease in Demand are
Answer:- Change income of consumer , Change in population , Change in fashion and 
customs
Question:- Monopolistic competition is wasteful as
Answer:- It involves selling cost, Non utilization of full capacity. Lack of specialization
Question:- Demand forecasts may be based on
Answer:- judgment of the experienced staff , scientific analysis ( statistics).
Question:- For calculating net profit, it is necessary to deduct
Answer:- All costs
Question:- The important policy questions of profit are:
Answer:- What are the criteria for determining the profit standard?, How should 'reasonable 
profits' be determined?
Question:- the cost function may be written as __________________
Answer:- = f(I,0,P,T)
Question:- question : = f(I,O,P,t) is
Answer:- Cost function
Question:- Predictions of future demand for a firm's product or products are called demand 
forecasts
Answer:- TRUE
Question:- An increase in the scale
Answer:- Means that all input, Or factors are increased, In the same proportion
Question:- The improvement in the technique of production leads to increased productivity 
and results in an increase in the supply of
Answer:- manufactured goods
Question:- Normal profits are also treated as costs, which is a pre-requisite for a firm to
Answer:- remain in business
Question:- in Economics, 'demand' means specific quantity of a
Answer:- Purchased
Question:- The relation between variable input and output
Answer:- Is direct
Question:- The profit standards may be determined in terms of
Answer:- aggregate money terms, percentage of sales, percentage return on investment
Question:- One of the factors of production is
Answer:- Raw materials
Question:- Demand is not a ______________
Answer:- desire
EDUCATION LUCK                          MAN. ECONOMICS                              09802343890
Question:- Explicit costs, implicit cost and normal profits together form the full costs of a firm
Answer:- TRUE
Question:- All firm reaches maximum output when         Answer:- M.P. is Zero
Question:- The cost mentioned in the accounts book of the firm are referred as
Answer:- Accounting cost
Question:- Going rate pricing methods emphasizes________________ condition
Answer:- market
Question:- Economics is a science which studies
Answer:- human behaviors, wants and ends, alternative uses of limited means
Question:- The pout-of-pocket costs are
Answer:- Explicit costs
Question:- Time-period does not affect demand forecasting
Answer:- FALSE
Question:- Management and supervision becomes difficult and waste of time and material 
results
Answer:- internal diseconomies
Question:- On account of new machines, a firm is able to effect a substantial reduction in the 
cost of production
Answer:- Technical economies
Question:- On account of new machines, a firm is able to effect a substantial reduction in the
Answer:- cost of production
Question:- A firm producing on a large scale can afford to hire the services of expects in 
various fields
Answer:- Managerial economics
Question:- The law of diminishing returns applies to
Answer:- agriculture
Question:- The central functions of an enterprise are not only production but also
Answer:- pricing
Question:- economic profit makes provision for
Answer:- insurable risks
Question:- Pure profit makes provision for
Answer:- insurable risks, depreciation, necessary payments to shareholders
Question:- Marginal cost is ____________________
Answer:- final cost
Question:- Participation in market economy is guided by motive of
Answer:- Maximum private profit
EDUCATION LUCK                          MAN. ECONOMICS                              09802343890
Question:- Economic profit is also called as just profit
Answer:- FALSE
Question:- The success of pricing policy can be judged by whether the price that the firm 
needs and buyers want is the same
Answer:- TRUE
Question:- The salary of the proprietor or rent on own land are the
Answer:- Implicit cost
Question:- Costs to be included in the price are actual and ................ Costs.
Answer:- expected
Question:- Aggregate of average fixed cost and average variable costs
Answer:- Average Cost
Question:- Patent and copyrights are a major source of
Answer:- Monopoly
Question:- Approaches to Pioneering Price are
Answer:- Skimming Price, Penetration Price
Question:- Price elasticity Degree of responsiveness of demand for a commodity to a given 
change in consumer's income
Answer:- FALSE
Question:- Cost function denotes
Answer:- The prices of such inputs as labour and material , The rate of output , The size
Question:- The OTHER APPROACHES to pricing are
Answer:- Intuitive Pricing, Experimental Pricing, ] Pricing
Question:- Keynes feels that to attain full employment in the economy _____________ 
Intervention is a must
Answer:- Government
Question:- Example of seasonal demand for a product could be
Answer:- Demand for sweater
Question:- Total fixed cost divided by total unit of output
Answer:- Average Fixed Cost
Question:- The market price is determined by the interaction of the market demand curve and
____________
Answer:- Supply Curve
Question:- disinvestment is linked with
Answer:- Denationalization, privatization
Question:- A firm can stabilize its output where marginal cost is equal to _____________
Answer:- MR
EDUCATION LUCK                          MAN. ECONOMICS                              09802343890
Question:- Law of Variable Proportion explained in how many stages?
Answer:- Three stages
Question:- The relationship between price and supply is
Answer:- Direct
Question:- Defects of Market mechanism are
Answer:- Inequalities of Income and Wealth, Elf Monopolies
Question:- Private goods are indivisible
Answer:- FALSE
Question:- in the case indivisible goods decisions can not be taken through
Answer:- Market mechanism
Question:- For consumption of private goods its purchase by paying the right price is 
essential
Answer:- TRUE
Question:- Income elasticity refers to the degree of responsiveness of demand for a 
commodity to a given change in the consumer's
Answer:- Income
Question:- In economics, supply is considered to be a
Answer:- relative term
Question:- Administrated prices are set on the basis of cost plus basis
Answer:- TRUE
Question:- Conditions of Price Discrimination are
Answer:- Market should be segmented, Market should be imperfect, Elasticities in different 
market would be different
Question:- Production Function denotes relationship between
Answer:- Input & output
Question:- MR
Answer:- Marginal Revenue
Question:- Profit maximization
Answer:- Firm's aim
Question:- Super normal Profit
Answer:- Short run
Question:- If AR < AFC
Answer:- stop production
Question:- Where there exists a close substitute in the relevant price range, its demand will 
tend to be inelastic
Answer:- FALSE
EDUCATION LUCK                          MAN. ECONOMICS                              09802343890
Question:- Where there exists a close substitute in the relevant price range, its demand will 
tend to be
Answer:- elastic
Question:- Monopoly profit is profit earned as a result of business skills.
Answer:- FALSE
Question:- Government can increase the domestic supply of food grain by way of larger 
____________.
Answer:- Imports
Question:- Private goods could be
Answer:- Heavy motor vehicles, Refrigerators, air coolers
Question:- The total number of firms under pure competition always remains
Answer:- very large
Question:- A poor man's desire to purchase a car is demand
Answer:- FALSE
Question:- By ____________ We mean no government intervention
Answer:- Laissez far ire
Question:- In _______ Method the opinion of the experienced persons with the firm are 
collected and a
Answer:-  
Question:- committee or the general manager of the firm analysis this information and 
forecasts the demand for the firm's product
Answer:- panel of experts
Question:- to the economist 'profits' means total revenue minus
Answer:- All costs
Question:- Total fixed cost of a firm includes
Answer:- Depreciation
Question:- two most important and widely accepted economic policies are
Answer:- Fiscal, Monetary
Question:- Macro Economics
Answer:- In general and as a whole
Question:- Production on a small scale is, found to be
Answer:- Disadvantageous
Question:- Under perfect competition price is equal to
Answer:- AR, MR, MC
Question:- Accounting costs are called as
Answer:- Explicit costs
EDUCATION LUCK                          MAN. ECONOMICS                              09802343890
Question:- The demand for capital goods is
Answer:- depends on the incomes of the consumers
Question:- Perfectly elastic demand curve is       Answer:- horizontal
Question:- Law of variable proportion occupies an important place in  theory
Answer:- economic
Question:- When a firm is ________ in size it may not need or afford an organized 
forecasting system
Answer:- Small
Question:- Deficit financing leads to _________ In money supply
Answer:- decrease
Question:- J.M. Keynes wrote a book in 1936 named
Answer:- A General Theory of Employment, Interest and Money
Question:- Aggregate supply function is the schedule showing a relationship between 
maximum expected sales proceed and different levels of output and employment
Answer:- FALSE
Question:- when a firm's average revenue (A.R.) is less than its average cost, it earns only 
abnormal profit
Answer:- TRUE
Question:- A ______ Forecast gives a total picture of the demand for all the products of a 
firm's product
Answer:- General
Question:- In economics ' citrus paribus ' means
Answer:- other things being equal
Question:- The important feature of perfect competition is _________
Answer:- Automatic Price Mechanism
Question:- Right to information is one of the right of consumer under the consumer protection
act, 1986.
Answer:- TRUE
Question:- The Basic Assumption of Keynesian theory
Answer:- short-run equilibrium analysis, capitalist economy, The technology and stock of 
capital
Question:- Aggregate demand function is a positively sloped curve
Answer:- TRUE
Question:- The number of sellers operating under perfect competition as compared to 
oligopoly is
Answer:- Larger
EDUCATION LUCK                          MAN. ECONOMICS                              09802343890
Question:- Consumer Protection Act, 1986 enunciates consumer interest as
Answer:- Protection from Hazardous Commodities, Right to Information, Right to a 
Competitive Price
Question:- The consumer protection act was introduced in
Answer:- 1986
Question:- Duopoly involves
Answer:- Two firms, interdependent on each other regarding prices and output, two buyers
Question:- saving is a private virtue but a public vice1 explain
Answer:- Paradox of income
Question:- Large number of buyers and sellers is one of the feature of
Answer:- Pure competition
Question:- The same economic problem- unlimited wants and relatively limited resources- 
arises at all levels of human organization.
Answer:- TRUE
Question:- Price elasticity refers to the degree of responsiveness of demand for a commodity
to a given change in its
Answer:- Price
Question:- The elasticity of supply deals with
Answer:- The Original Quantity Supplied, Net change in Quantity Supplied, The original Price
and Net change in Price
Question:- In production function T - denotes the state of technology
Answer:- TRUE
Question:- Monopoly is an example of imperfect market
Answer:- TRUE