Download Calicut University Latest 2020 B.Com Managerial Economics Important Questions

UNIVERSITY OF CALICUT

SCHOOL OF DISTANCE EDUCATION

I Semester (2019 Admn.)

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Complementary Course for B.Com

MANAGERIAL ECONOMICS

QUESTION BANK & ANSWER KEY

1. Consumption of a free good will be carried to the point at which:
   1. The marginal utility derived from the good equals the marginal utility derived from the consumption of all other goods.
   2. The total utility derived from the good equals the total utility derived from the consumption of all other goods.

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   3. The total utility derived from the good is maximised.
   4. The marginal utility derived from the good begins to decline.
2. An indifference curve shows combinations of two goods that:
   1. a consumer could buy with their given income.
   2. could provide the consumer with similar levels of satisfaction.

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   3. would provide the consumer with the same level of satisfaction.
   4. could be available to the consumer in a given time period.
3. Which of the following statements is NOT TRUE of indifference curves?
   1. They could intersect
   2. They are convex to origin

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   3. They exhibit higher levels of utility
   4. as you move from the origin
4. A consumer with a given income will maximise their utility when:
   1. the marginal utility derived from each commodity is equal.
   2. the marginal utility derived from each product consumed is zero.

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   3. the total utility derived from each commodity consumed is equal.
   4. the marginal utilities derived from each commodity are proportional
5. The typical indifference curve
   1. Shows that as a consumer has more of a good he/she is less willing to exchange it for one unit of another good.
   2. Shows all combinations of goods that give a consumer in same level of utility

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   3. Shifts out if income increases
   4. Both B and C
6. The rate at which a consumer is able to substitute one good for another is determined by the
   1. Consumers income
   2. Indifference map

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   3. Ratio of the prices of the goods
   4. Marginal rate of substitution.
7. A utility function shows the relation between .....
   1. The amount of goods consumed and a consumer utility.
   2. Income and a consumer utility.

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   3. Prices and consumers utility.
   4. Maximum utility and the price and income facing a consumer.
8. Along an indifference curve
   1. The ratio of the marginal utilities is constant
   2. MRS is constant

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   3. The price ratio is constant
   4. Both B and C
   5. None of the above.
9. Indian economy is
   1. Socialistic

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   2. Mixed
   3. Gandhian
   4. Free economy
10. Which of the following is the measure to control inflation.
    1. Granting credit on liberal terms

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    2. Raising bank rate
    3. Demonetization
    4. None of these
11. Which of the following is a measure to reduce inequality of income
    1. Promotion of industries

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    2. Social securities
    3. Granting of credit to poor on concessional rate
    4. None of these
12. The most outstanding feature of capitalist economic system is
    1. Unemployment

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    2. Poverty
    3. Inequality of income
    4. Industrial backwardness
13. Employment of people who take jobs below their capacity is known as
    1. Underemployment

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    2. Disguised unemployment
    3. Cyclical unemployment
    4. None of these
14. Which of the following is a social consequences of unemployment in india
    1. Burden on the government

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    2. Loss of income and respect
    3. Wastages of resources
    4. None of these
15. Unemployment caused by a decline in demand for production in a particular industry is a.
    1. Seasonal unemployment

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    2. Frictional unemployment
    3. Structural unemployment
    4. None of these
16. Which of the following is not a development issue in india
    1. Unemployment

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    2. Population pressure
    3. Inflation
    4. Decreasing trend of foreign capital
17. Indian economy growth is primarily driven by
    1. Industry

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    2. Agriculture
    3. Service
    4. None of these
18. Law of equi-marginal utility is
    1. Cardinal utility theory

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    2. Ordinal utility theory
    3. None of these
19. Law of equi-marginal utility was suggested by
    1. Marshal
    2. Robins

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    3. HH Ghosen
    4. None of these
20. The concept of consumer surplus was developed by
    1. Marshal
    2. HH Ghosen

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    3. Bhentham
    4. None of these
21. Indifference curve analysis is a
    1. Cardinal utility approach
    2. Ordinal utility approach

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    3. None of these
22. Indifference curve analysis is based on the principles of
    1. Consumer surplus
    2. Diminishing marginal utility
    3. Diminishing marginal rate of substitution

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    4. None of these
23. Which of the following is correct.
    1. Indifference curve has a negative slope
    2. Indifference curve is a convex to the point of origin c.
    3. Two indifference curves may intersect each other.

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24. The author of the wealth of nation is
    1. Marshal
    2. Robins
    3. Adam smith
    4. None of these

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25. Macro economic theory is also known as
    1. Price theory
    2. Income theory
    3. Demand theory
    4. None of these

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26. The study of entire economic system is called
    1. Macro economics
    2. Micro economics
    3. Economics
    4. None of these

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27. The author of "the wealth of nations" is
    1. Marshal
    2. Ricardo
    3. Robins
    4. Adam smith

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28. The study of international trade and national income is part of
    1. Global economics
    2. Macro economics
    3. Positive economics
    4. Micro economics

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29. If the income elasticity of demand is that one, the good is a
    1. Necessity
    2. Luxury
    3. Substitute
    4. Complement

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30. The income elasticity of demand is negative for a
    1. Positive good
    2. Normal good
    3. Elastic good
    4. Inferior good

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31. If the price of DVRs fell and as a result the demand for VHS recorders fell we could conclude that VHS recorders DVRs are
    1. Normal goods
    2. Substitutes
    3. Elastic goods
    4. Unrelated

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32. What effect is working when the price of a good falls and consumers tend to buy it instead of other goods
    1. Income effect
    2. Substitution effect
    3. Price effect
    4. None of these

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33. The quantity demanded of a product increases when
    1. The consumers suddenly want more of the goods
    2. The consumers level of income falls
    3. The price of the product falls
    4. More buyers of the goods enter the market

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34. Two goods that are used jointly to provide satisfaction are called
    1. Inferior goods
    2. Normal goods
    3. Complementary goods
    4. Substitute goods

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35. Demand curve slopes downwards Because of
    1. The law of diminishing marginal utility
    2. The income effect
    3. Substitution effect
    4. All of the above

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36. If the income and substitution effect of a price increase works in the same direction the good whose price has changed is a
    1. Giffen goods
    2. Inferior goods
    3. Normal goods
    4. Superior

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37. A rise in the relative price of bus transport will lead to
    1. Fall in the demand for taxi service
    2. Fall in the demand for new cars
    3. Expansion of new bus routes available for customers

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38. Which of the following is not a survey method of demand forecasting
    1. Consumers interview method
    2. Expert opinion method
    3. Barometric method
    4. Collective opinion method

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39. Which of the following is not a method of demand forecasting
    1. Trend projection method
    2. Substitute approach
    3. Sales experience approach
    4. Evolutionary approach

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40. Which one is not a property of isoquant
    1. Downward sloping
    2. Convex
    3. Negative slope
    4. Positive slope

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41. In which production function, the degree of homogeneity is always one
    1. Cobb doubglas production fuction
    2. Homogeneous production function
    3. Linear homogeneous production function
    4. None of these

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42. Which of the following is a short run law
    1. Law of diminishing returns
    2. Law of constant returns to scale
    3. Law increasing returns to scale
    4. None of these

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43. Which of the following is not a variable input
    1. Raw material
    2. Power
    3. Equipment
    4. None of these

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44. Which cost is more useful for decision making
    1. Opportunity cost
    2. Sunk cost
    3. Historical cost
    4. None of these

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45. Which cost are recorded in books of accounts
    1. Opportunity cost
    2. Implicit cost
    3. Social cost
    4. Explicit cost

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46. Fixed cost per unit increases when
    1. Volume of production decreases
    2. Volume of production increases
    3. Variable cost per unit decreases
    4. None of these

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47. Variable cost per unit
    1. Remains fixed
    2. Varies with the volume of production
    3. Varies with sales
    4. None of these

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48. Firms in a oligopoly
    1. Are independent of each other's action
    2. Can each influence the market price
    3. Charge a price equal to marginal revenue
    4. All of these

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49. Duopoly is
    1. Another name for monopoly
    2. Special type of monopolistic competition
    3. Two firm oligopoly
    4. None of these

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50. Product differentiation is an important feature of
    1. Perfect competition
    2. Monopolistic competition
    3. Monopoly
    4. None of these

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51. Globalisation has created new opportunities of
    1. Establishing rules of domestic trade
    2. Restricting trade practices
    3. Liberalizing international trade
    4. None of these

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52. Removing barriers or restrictions set by the government is called
    1. Liberalization
    2. Investment
    3. Favourable trade
    4. Free trade

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53. WTO aims at
    1. Establishing rules for domestic trade
    2. Restricting trade practices
    3. Liberalizing international trade
    4. None of these

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54. What are "hawala transaction"
    1. Foreign trade in goods that are banned by the government.
    2. Transfer of money without actually moving it
    3. Illegal drug trade at the international level
    4. Conversion of black money into white money

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55. Which of the following is a measure to control inflation.
    1. Granting of credit on liberal terms
    2. Raising bank rate
    3. Demonetization
    4. None of these

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56. Which of the following is a measure to reduce inequality of income
    1. Promotion of industries
    2. Social securities
    3. Granting of credit to poor on concessional rates
    4. None of these

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57. The most outstanding feature of the capitalist economic system is
    1. Unemployment
    2. Poverty
    3. Inequality of income
    4. Industrial backwardness

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58. Employment of people who take jobs below their capacity is known as
    1. Underemployment
    2. Disguised unemployment
    3. Cyclical unemployment
    4. None of these

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59. Which of the following is a social consequence of unemployment in india
    1. Burden on the government
    2. Loss of income and respect
    3. Wastage of resources
    4. None of these

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60. The unemployment caused by a decline in demand for production in a particular industry is
    1. Seasonal unemployment
    2. Frictional unemployment
    3. Structural unemployment
    4. None of these

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61. Which of the following is not a development issue in india.
    1. Unemployment
    2. Population pressure
    3. Inflation
    4. Decreasing trend of foreign capital

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62. India's economy growth is primarily driven by
    1. Industry
    2. Agriculture
    3. Service
    4. None of these

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63. In which exchange rate system, exchange rate is fixed by the monetary authority
    1. Flexible exchange rate system
    2. Fixed exchange rate system
    3. Managed floating exchange rate system
    4. None of these

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64. Which of the following does not come under foreign direct investment
    1. Investment in GDR
    2. Wholly owned subsidiary
    3. Joint venture
    4. Acquisition

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65. Direct foreign investment is part of
    1. Current account
    2. Fixed account
    3. Long term account
    4. Financial account

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66. MNC
    1. Always produce primary goods
    2. Always produce manufactured goods
    3. Always produce service,
    4. May produce primary or manufactured goods

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67. One major initiative to attract foreign companies to invest in india is
    1. Raise the standard of education
    2. To promote unemployment in the public sector
    3. To build up special economic zones
    4. Both A & B

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68. The portfolio investment by foreign institutional investor is
    1. FDI
    2. FII
    3. BOP
    4. SDR

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69. Under the new trade policy, import licensing was abolished except in case of
    1. Textile industry
    2. Consumer goods industry
    3. IT industry
    4. Hazardous and environmentally sensitive industry

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70. Where do MNCs choose to set up production?
    1. Cheap goods,
    2. Cheap labour resources
    3. Economic sustainability
    4. None of these.

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71. Cargil foods, an MNC has bought over which indigenous Indian company?
    1. Amul
    2. Britannia
    3. Parakh foods
    4. Dabur

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72. For motors entered the Indian automobile business in collaboration with which Indian manufacturer?
    1. Mahindra and Mahindra
    2. Tata motors
    3. Maruthi Suzuki
    4. Hindustan Motors

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73. What is happening with the import of Chinese toys in india?
    1. Indian toys are selling more
    2. Indian consumers are buying less
    3. Indian consumers are getting more choice at cheaper rates
    4. Chinese consumers are falling short of choice

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74. Trade between countries
    1. Determines prices of products in different countries
    2. Decreases competition between countries
    3. Makes a country dependent on the other
    4. None of these

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75. Globalization by connecting countries leads to
    1. Lesser competition among producers
    2. Greater competition among producers
    3. No competition between producers
    4. None of these

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76. If tax is imposed on Chinese toys, what will happen?
    1. Chinese toy makers will benefit
    2. Indian toy makers will proposer
    3. Chinese toys will remain cheap,
    4. Indian consumers will buy more Chinese toys

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77. Which of the following is an example of a trade barrier?
    1. Foreign investment
    2. Delay or damage of goods
    3. Tax on imports
    4. None of these

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78. Which out of the following industries has a large number of well off buyers in urban areas?
    1. Footwear
    2. Automobile
    3. Jewellery
    4. Clothing and accessories

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Answer Key

Prepared by : Sri. Rajan.P

Assistant Professor on Contract,

School of Distance Education, University of Calicut.

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