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Unit 1 : Managerial Economics and Ethics - Managerial Economics - Managerial Economics Section 1 Online Exam Quiz

Important questions about Unit 1 : Managerial Economics and Ethics - Managerial Economics - Managerial Economics Section 1. Unit 1 : Managerial Economics and Ethics - Managerial Economics - Managerial Economics Section 1 MCQ questions with answers. Unit 1 : Managerial Economics and Ethics - Managerial Economics - Managerial Economics Section 1 exam questions and answers for students and interviews.

1. The Revealed Preference Theory is based on


A : Introspection

B : Utility and demand

C : The assumption of indifference

D : Observed consumer behavior

2. One would expect a firm to close down rather than continue producing in the short-period if


A : Variable costs were to fall below fixed costs

B : Total revenue were less than total variable cost

C : Total revenue were more than total variable cost

D : Variable costs were to rise above fixed costs

3. Marginal Utility (MU) curve is always


A : Parallel to X-axis

B : Falling

C : Rising

D : Parallel to Y-axis

4. The Law of Diminishing Returns depends on the assumption that


A : The land is the factor kept constant

B : The state of technical knowledge is unchanged

C : Total output is constant

D : Average output declines faster than the marginal output

5. MR n = TR n - TR n_1 is the algebraic expression of


A : Information is insufficient

B : Marginal Revenue, the change in total revenue when there is a change in quantity sold of the product.

C : The addition to TR earned by selling n units of product instead of (n-1) units

D : None of the above

46. Isoquant refers to


A : An equal quantity curve of a consumer

B : The production indifference curve

C : Another name of indifference curve

D : An equal-cost curve of a producer

47. Under the perfect competition, the transportation cost


A : Is considered to be negligible and thus, ignored

B : Is charged along with the price of the commodity

C : Is considered to be vital for the calculation of the total cost

D : Excluded from the prime cost

48. If a demand curve exhibits unit elasticity for all prices, the MR curve


A : Is identical with it

B : Lies below the demand curve

C : Is identical with the X-axis

D : Is identical with the Y-axis

49. Which is the best definition of the marginal firm?


A : The firm with the lowest costs

B : The firm with a large profit

C : The firm which makes an only normal profit

D : The firm which equates its marginal costs with marginal revenue.

50. The share of revenues paid to suppliers does not depend upon


A : relative productivity.

B : resource scarcity.

C : input market competition.

D : output market competition.

55. Given: The above curve is a:


A : Demand curve

B : Product curve

C : Price curve

D : Profit curve

56. In the following wing diagram of a competitive firm, T point includes


A : No profit

B : Abnormal profit

C : Normal profit

D : Heavy loss

58. Given: The given curve is a


A : Macro-Statics

B : Macro-Dynamics

C : Comparative Statics

D : Capital Budgeting

6. Any supply curve which is a straight line passing through the origin whatever its slopes will possess


A : An elasticity which is less than one

B : An elasticity which is greater than one

C : Unitary elasticity of supply

D : An elasticity which is greater than zero

7. A monopoly producer has


A : Control over production but not price

B : Control over production, price, and consumers

C : Control neither on production nor on price

D : Control overproduction as well as price

8. On an indifference map, higher indifference curves show


A : Levels of satisfaction among which the consumer is indifferent

B : The optimum level of satisfaction

C : The higher level of utility

D : The same lower level of satisfaction

9. Which of the following is the correct statement? (1) The slope of the Isoquants represents the MRTS (2) The MRTS of the inputs x and y = MP x /MP y (3) The elasticity of substitution between two inputs x and y is proportionate change in the ratio of two inputs divided by the proportionate change in the MRTS. (4) If the degree of homogeneity is greater than one, the production function is increasing returns to a fixed factor


A : 2, 3 and 4

B : 1, 3 and 4

C : 1, 2, 3

D : 1, 2 and 3

10. When the TR curve and TC curve are parallel and TR exceeds TC


A : Total profit is minimized

B : Normal profit is minimized

C : Total profit is maximized

D : Normal profit is maximized

11. In perfect competition, there is a process of


A : Restricted entry and exit of the firms

B : Free entry and free exit of the firms

C : Free entry but the restricted exit of the firms

D : Semi-free exit but absolute free entry

12. 'The increasing returns to scale occurs because larger scale provides greater specialization to various factors' according to


A : Paul Samuelson

B : Alfred Marshall

C : Chamberlain

D : Joan Robinson

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