Managerial Economics - Practice Test

[#201] Ordinal approach is based on

(A) Utility could not be measured in ordinal numbers

(B) Utility could not be measured in cardinal numbers

(C) Law of maximum satisfaction

(D) Utility can be measured

Correct Answer

(B) Utility could not be measured in cardinal numbers

[#202] If the individual firm's demand curve is coincident with the market demand curve then

(A) Marginal revenue is equal to average revenue

(B) The firm is a monopolist

(C) The firm can set any price it wants without limitation

(D) The firm is price-taker

Correct Answer

(B) The firm is a monopolist

[#203] Match the following: List-I (Items) List-II (Applications) a. Profit 1. Sales - (VC + FC) b. Margin of safety 2. $$frac{{{ ext{FC}} + { ext{Profit}}}}{{{ ext{Sales}} - { ext{VC}}}}$$ c. Sales in Rs. 3. $$frac{{{ ext{FC}} + { ext{Profit}}}}{{1 - frac{{{ ext{VC}}}}{{{ ext{Sales}}}}}}$$ d. Contribution margin per unit 4. $$frac{{{ ext{Fixed Cost}}}}{{{ ext{BEP in units}}}}$$ 5. Profit + TFC

(A) a-1, b-2, c-3, d-4

(B) a-1, b-5, c-2, d-4

(C) a-3, b-1, c-2, d-4

(D) a-3, b-4, c-2, d-1

Correct Answer

(B) a-1, b-5, c-2, d-4

[#204] Constrained optimization techniques are not designed to deal with the problem of

(A) limited availability of essential inputs

(B) self-serving management

(C) contractual requirements

(D) scarce investment funds

Correct Answer

(B) self-serving management

[#205] Which statement is/are true?

(A) If demand is elastic, a price increase will lower total revenue, and a decrease in price will raise total revenue

(B) If demand is elastic, the relative change in quantity is larger than that of price, so a given percentage increase in price causes quantity to decrease by a larger percentage, decreasing total revenue

(C) If demand is inelastic, a price increase will produce a less than proportionate decline in the quantity demanded

(D) All of the above

Correct Answer

(D) All of the above

Managerial Economics - Study Mode

[#201] Ordinal approach is based on

Correct Answer

[#202] If the individual firm's demand curve is coincident with the market demand curve then

Correct Answer

Correct Answer

[#204] Constrained optimization techniques are not designed to deal with the problem of

Correct Answer

[#205] Which statement is/are true?

Correct Answer