CAQs For PEM Flashcards
Which of the following cost can be defined as the cost of next best alternative that is given up when consumers make a choice?
Opportunity Cost
“Economics is the Science which studies Human behaviour as a Relationship between ends & scarce means which have alternative uses”. Identify which of the following viewpoint is defined here, choose the correct option.
Scarcity Viewpoint
When the Producer earns maximum profit with optimal combination of factors which is represented by Isoquant and Iso cost, which type of the equilibrium is attained? Choose the correct answer
Producer’s Equilibrium
The total quantity that all the consumers of a Product are willing to purchase at a given price over a specific period. What is the total quantity demanded termed as?
Market Demand
Which of the following law states that as consumption increases, the utility that a consumer derives from additional units of a commodity diminishes constantly. Identify the law described here.
Law of Diminishing Marginal Utility
There are few instances / situations where the Law of Demand does not apply. These instances are known as Exceptions to Law of Demand. Which of the following is NOT an exception?
Fruits & Vegetables
“A table that shows the relationship between the price of a good and the quantity demanded is used in understanding the concept of Demand. Select the term used to describe this table from the following options.
Demand Schedule
The Scarcity of resources also leads to the problem of the Choice of Technique for production. An organization will have to decide on best combination of inputs to produce Goods & Services. Which of the following problems is described here? Choose the correct answer.
How to Produce
One of the classical perspective of Economics believes that Economics as a Subject is mainly concerned with the production & expansion of wealth. Identify which of the following viewpoint is described here, choose the correct option.
Wealth Viewpoint
Which of the following theories helps managers to determine the factors that affect the buying decisions of consumers & their needs & requirements alongwith helping the firms decide the Price & the Level of Production?
Demand theory
Change in total quantity produced by including one more worker. Which concept is explained by this statement?
Marginal product
A curve that shows efficient combinations of labor and capital that can produce a single or equal level of output or Quantity. Identify the curve described here.
Iso Quant
Which of the following concept shows the way in which a consumer’s purchase of any good changes as a result of change in his income?
Income Elasticity
Demand is the Quantity of a commodity which a consumer wants to buy at a given price. The demand is driven by 3 main components, which of the following option is NOT a component of Demand?
Supplier’s attitude
The Law of Supply states that Quantity supplied increases with the increase in the price of the commodity. What kind of relationship exists between Price & Quantity supplied?
Direct Relationship
When Demand of a product is associated with demand of another product, which type of demands is defined here?
Derived Demand
Which of the following cost is defined as- Cost or Expenditure which a firm incurs for producing or acquiring a good or service which are recorded in the books of accounts of a business unit. Identify the cost described here.
Actual Cost
The application of Economic Concepts & Theories in the Process of Business decision making is done by managers in taking logical decisions in an Organization. Which branch of Economics is defined here?
Managerial Economics
Which of the following functions defines relationship between Output & different levels & combination of Inputs?
Production Function
Which Branch of Economics studies the Economy as a whole, analyses the aggregates of Individuals, Businesses, Prices & Output? Select the correct answer.
Macro Economics
The root cause of all the Economic problems is the Scarcity of Resources, while the wants & needs are Unlimited; this creates central problems in a Economy, Which of the following is NOT a central problem created due to Scarcity?
Where to Produce
In the long‐run, all factors of production are variable. What is the other term used to describe the long run cost curve? Choose the correct answer.
Envelope Curve
What is the period in which a firm can change only few factors of production, and other factors are fixed is known as?
Short Run
What are those factors whose Quantity can be changed during a specific period of production known as?
Variable factors
Microeconomics deals with the behaviour of Individuals, Commodities & Prices at the micro level. Select which of the following is NOT a theory of Microeconomics?
National Income Theory
“The degree of responsiveness of quantity demanded towards changes in its determinants like Price, Income of Consumer & Price of related goods”, Which concept is defined here?
Demand Elasticity
“Which of the following law states that as the quantity of one factor is increased, keeping the other factors fixed, the marginal product of that factor will eventually declines?
“
The law of variable proportions
Which of the following concept refers to the cost advantages due to the larger size of production, in other words, as the volume of production increases, the overhead cost will come down?
Economies of Scale
The Quantity demanded for a particular commodity depends on various factors. Identify which of the following is NOT a factor that determines demand.
Income of the Supplier
Macroeconomics theory deals with the issues related to General Business environment in which an Organization operates. Which of the following is NOT an objective of Macroeconomics?
Individual’s employment
Which of these is not a quantitative instrument of Monetary Policy?
Moral Suasion
When CRR is increased, how does it affect the money supply?
It decreases money supply
Average cost or unit cost is equal to total cost divided by the number of units of a good produced. The average fixed cost at 5 units of output is Rs. 20. Average variable cost at 5 units of output is Rs. 40. What is the Average cost of producing 5 units?
Rs.60
Which of the following guidelines by the RBI does not hamper the profitability of commercial banks in India?
Bank rate
What does oligopoly market kinked demand curve explains?
Collusion among rival firm
The long-run supply curve of a perfectly competitive firm means which from the given options?
Is equal to that portion of the long-run marginal cost curve that is above the relevant short-run average total cost curve
When firms in the Oligopoly depend on each other for getting maximum benefit, which type of Oligopoly market will it constitute?
Syndicated oligopoly
Which of these cannot be termed as a socio-economic problem in India?
High population
The term “Capital” is used in many perspectives. In which perspective this term is used in economics?
Assets
When group of firms forms their own association for price and output in Oligopoly, what is this condition called as?
Cartel
What do we call the funds that the banks keep with RBI as a portion of their Net Demand and Time Liabilities?
Cash Reserve Ratio
When can the Collusion in an oligopoly market be made easier?
When number of firms are less
There are many models which describes the oligopoly market condition. Which of the following is NOT a model of classical Oligopoly?
Waltor’s Model
A cartel can also give each member exclusive right to operate in a particular geographic area. What do you call such cartel as?
Market-sharing cartel
When the dominant firm determines the price in oligopoly market, what do you call that firm as?
Price Leadership
If a firm sells its output on a market that is characterized by many sellers and buyers, a homogeneous product, unlimited long-run resource mobility, and perfect knowledge, which type of market competition will it create?
Perfect competition
What do we call the instruments of monetary policy which directly affect the quantity of money supply?
Quantitative instruments
Isoquants represent the combination of two factors of production giving same level of output. What is the shape of Isoquant curves?
Downward sloping
An underdeveloped economy has many characteristics. Which of the following is the most important characteristics of underdeveloped economy?
State of deprivation of large proportion of population
Which of the following could not be considered a major economic system?
Quality of life index
Which of the following explains the term Economic Growth?
Increase in real GDP
Which concept explains the degree of responsiveness of quantity demanded towards changes in its determinants like Price, Income & Price of related goods and many others?
Elasticity of Demand
Macroeconomics focuses on broader concepts unlike microeconomics. What are the parameters on which Macroeconomics is focused on?
Resource usage in the entire nation
When you study the production theory from long run perspective, what advantage it has over the short run theory which helps in making rational production decisions?
All factors of production can be varied
Managerial Economics can be defined in many ways. How can it be best defined from the given options?
A field that applies economic theory and the tools of decision science
When 5 units of a goods are sold, total revenue is Rs. 100. When 6 units are sold, marginal revenue is Rs. 8. At what price are 6 units sold ?
Rs. 18 per unit
The primary focus of microeconomics is the study of individuals and their behaviour. What are the two variables you associate this meaning with?
Individuals and their resource usage
Unemployment in India is very high, but which sector creates biggest employment opportunity in India?
Service sector
Marginal revenue is equal to price for which one of the following types of market structure?
perfect competition
Law of Supply states that Quantity supplied increases with the increase in the price of the commodity. What kind of relationship exists between Price & Quantity supplied?
Direct Relationship
What is the condition under perfectly competitive market that the firm makes a decision to shut down?
When the price is below the minimum of average variable cost
Benefits like improved organization, division of labour and specialization, better supervision and control, etc. enjoyed by a firm when it expands production. What benefit that a firm can have through this?
Economies of scale
Suppose the equilibrium price of good X is $10 and the equilibrium quantity is 60 units. If the price of good X is $4 which option from these would be relevant?
There will be an excess demand for good X.
Economics is considered as a Social Science. Identify the reason for the same?
It is primarily concerned with how scarce resources are used
Which of the following market types has the fewest number of firms?
Oligopoly
Economic development is different from Economic growth. How do you define economic development as?
Increase in economic growth plus human capital
When an increase in the general price level of goods and services is observed, what problem will it create in the economy?
Inflation
There are few conditions in which Law of Demand does not apply. Which of the following is NOT an exception to Law of demand?
Fruits & Vegetables
What do you call the Net Market Value of net output of final goods and services produced within an economy during a year after depreciation?
Net Domestic Product
Which sector has grown the most over forty years?
Tertiary
If the market demand curve for a commodity has a negative slope, which type of market structure will it form?
Market structure cannot be determined only from demand curve
Which of the following concept describes the change in quantity demanded as a result of change in consumer income?
Income Elasticity
The short-run supply curve of a perfectly competitive firm means which from the given options?
Is equal to that portion of the short-run marginal cost curve that is above the average variable cost curve
The cost of bank credit is determined on the basis of base rate and all bank loans are given at a rate equal to or higher than the base rate. Of the following, who determines this base rate?
It is determined by the bank concerned
A monopolistic competition is the perfect blend of two distinct market competitions. Identify the combination which creates monopolistic competition?
Perfect competition & Monopoly
