1 | P a g e Centre for Collaboration of Industry and Institutions (CCII) – www.cmju.in
Question Booklet Code: C Duration: 2 Hours
Course: Executive Master of Business Administration Year: First Year
Paper Code: 101101 Paper Name: Business Economics
ATTEMPT ALL THE BELOW MENTIONED QUESTIONS:
1. The resources in an economy:
a. Are always fixed
b. Can never decrease
c. Always increase over time
d. Are limited at any moment in time
2. Human wants are:
a. Always fixed
b. Limited
c. Unlimited
d. Likely to decrease over time
3. The sacrifice involved when you choose
a particular course of action is called the:
a. Alternative
b. Opportunity cost
c. Consumer cost
d. Producer cost
4. Which one of the following is not one of
the basic economic questions?
a. What to produce
b. Who to produce for
c. How to produce
d. How to minimize economic growth
5. The basic economic problems will not
be solved by:
a. Market forces
b. Government intervention
c. A mixture of government intervention and
the free market
d. The creation of unlimited resources
6. The free market involves:
a. The free provision of products
b. The subsidising of products by the
government
c. Market forces of supply and demand
d. All trade via barter
7. A mixed economy:
a. Allocates resources via supply but not
demand
b. Allocates resources via demand but not
supply
c. Allocates resources via supply and demand
d. Allocates resources via market forces and
government intervention
8. Which of the following is NOT likely to
be true in a command economy?
a. Businesses may pursue social objectives
b. The profits of a business belong to the
government
c. Resources are allocated by government
directives
d. Market forces determine what is produced
and who receives the products
9. The public sector includes:
a. Investors owning companies
b. Government ownership of assets
c. Market forces of supply and demand
d. Private enterprise
10. Which of the following is a normative
statement in economics?
a. More spending by the government reduces
poverty
b. Higher taxes lead to less desire to work
c. The UK economy is growing fast relative to
other European Union members
d. The government should concentrate on
reducing unemployment
11. Indicate below what is NOT a factor of
production.
a. Capital.
b. Land.
c. Labour.
d. A bank loan.
CMJ UNIVERSITY, SHILLONG
TERM END EXAMINATION - 2013
2 | P a g e Centre for Collaboration of Industry and Institutions (CCII) – www.cmju.in
12. Macroeconomics deals with:
a. economic aggregates.
b. the behaviour of firms.
c. the activities of individual units.
d. the behaviour of the electronics industry.
13. Microeconomics is not concerned with
the behaviour of:
a. industries.
b. firms.
c. consumers.
d. aggregate demand.
14. The study of inflation is part of :
a. microeconomics.
b. normative economics.
c. descriptive economics.
d. macroeconomics.
15. Aggregate supply is the total amount:
a. of products produced by a given industry.
b. of labour supplied by all households.
c. produced by the government.
d. of goods and services produced in an
economy.
16. The total demand for goods and
services in an economy is known as:
a. national demand.
b. gross national product.
c. aggregate demand.
d. economy-wide demand.
17. Inflation is:
a. a decrease in the overall level of economic
activity.
b. a decrease in the overall price level.
c. an increase in the overall price level.
d. an increase in the overall level of economic
activity.
18. A recession is:
a. a period of declining prices.
b. a period of declining unemployment.
c. a period of very rapidly declining prices.
d. a period during which aggregate output
declines.
19. Unemployment means that:
a. there are some people who will not work at
the going wage rate.
b. people are not willing to work at the going
wage rate.
c. at the going wage rate, there are people
who want to work but cannot find work.
d. there is excess demand in the labour
market.
20. If marginal benefit is greater than
marginal cost, a rational choice involves:
a. less of the activity.
b. more or less, depending on the benefits of
other activities.
c. no more of the activity.
d. more of the activity.
21. A student chooses to study because
the marginal benefit is greater than the
________ cost.
a. average
b. expected
c. total
d. marginal
22. The concept of opportunity cost:
a. is relevant only for a capitalist economy
like the United States.
b. suggests a major increase in public healthcare
spending means an expansion in other
areas will be harder to achieve.
c. suggests all our wants can be achieved.
d. would be irrelevant if we eliminated
poverty.
23. Opportunity cost is
a. that which we forgo, or give up, when we
make a choice or a decision.
b. a cost that cannot be avoided, regardless
of what is done in the future.
c. the cost incurred in the past before we
make a decision about what to do in the
future.
d. the additional benefit of buying an
additional unit of a product.
24. A graph showing all the combinations
of goods and services that can be
produced if all of society's resources are
used efficiently is a:
a. Lorenz curve.
b. capital consumption frontier.
c. production possibility curve.
d. circular-flow diagram.
25. Periods of less than full employment
correspond to:
a. points outside the production possibility
curve.
b. points inside the production possibility
curve.
c. points on the production possibility curve.
d. either points inside or outside the
production possibility curve.
3 | P a g e Centre for Collaboration of Industry and Institutions (CCII) – www.cmju.in
26. A production function measures the
relation between…
a. input prices and output prices.
b. input prices and the quantity of output.
c. the quantity of inputs and the quantity of
output.
d. the quantity of inputs and input prices.
27. A short-run production function
assumes that…
a. the usage of at least one input is fixed.
b. the level of output is fixed.
c. all inputs are fixed inputs.
d. both a and b
28. If average product is decreasing, then
marginal product…
a. must be greater than average product.
b. must be less than average product.
c. must be increasing.
d. cannot be decreasing.
29. Which of the following statements is
TRUE?
a. A firm plans in the short run and operates in
the long run.
b. In the long run a firm can change all but
one input.
c. In the long run all inputs are variable.
d. In the short run all inputs are fixed.
30. Suppose you operate a sandwich shop
and currently have two employees. If you
hire a third employee, your output of
sandwiches per day rises from 75 to 90. If
you hire a fourth employee, output rises
to 110 per day. A fifth and sixth employee
would cause output to rise to 120 and 125
per day, respectively. Choose the correct
statement:
a. Diminishing returns set have not yet set in
because output is still increases.
b. Diminishing returns set in with the hiring of
the fourth worker.
c. Diminishing returns set in with the hiring of
the fifth worker.
d. Diminishing returns set in with the hiring of
the sixth worker.
31. The marginal product of labor…
a. is less than the average product of labor
when the average product of labor is
decreasing.
b. measures how output changes as the wage
rate changes.
c. is negative when adding another unit of
labor decreases output.
d. both a and c
32. Diminishing marginal productivity…
a. occurs when the marginal product curve
begins to slope downward.
b. occurs eventually because each additional
unit of the variable input has, on average,
fewer units of the fixed input with which to
work.
c. occurs when adding one more unit of the
variable input reduces total product.
d. both a and b
33. Diminishing returns refers to the
decrease in…
a. long-run average cost that results from
increases in output.
b. average total cost that results from
decreases in input prices.
c. profit that results from increases in output.
d. marginal product that results from increases
in the variable input.
34. If a firm is producing a given level of
output in a technically-efficient manner,
then it must be the case that…
a. it is choosing the lowest-cost method of
producing that output.
b. this output level is the most that can be
produced with the given levels of inputs.
c. each input is producing its maximum
marginal product.
d. both a and b
35. If a firm is producing a given level of
output in an economically-efficient
manner, then it must be the case that…
a. it is choosing the lowest-cost method of
producing that output.
b. this output level is the most that can be
produced with the given level of inputs.
c. each input is producing its maximum
marginal product.
d. both a and b
36. A short-run cost function assumes
that…
a. the level of output is fixed.
b. all inputs are fixed.
c. at least one input is fixed.
d. both a and c
37. Average total cost…
a. Decreases as output increases.
b. Increases as output increases.
c. Increases if marginal cost is increasing.
d. Increases if marginal cost is greater than
average total cost
4 | P a g e Centre for Collaboration of Industry and Institutions (CCII) – www.cmju.in
38. Average fixed cost…
a. increases if marginal cost is increasing.
b. increases as output increases.
c. decreases as output increases.
d. increases if marginal cost is greater than
average fixed cost.
39. Marginal cost…
a. is less than average cost when average cost
is decreasing.
b. measures how total cost changes when one
more unit of output is produced.
c. measures how total cost changes when
input prices change.
d. both a and b
40. A business whether national or
international contains the following
activities or functions:
a. Operations, Human Resource Management,
Accounting, Marketing and Research and
Development.
b. Production, Human Resource Management,
Finance & Accounting, Marketing, and
Research and Development.
c. Production, Human Resources, Finance,
Sales and Marketing, Research and
Development.
d. Operations, Human Resources, Accounting
& Finance, Sales, Research and Development.
41. The 3 basic forms of businesses are:
a. Retail, Wholesale and Direct Sales.
b. Manufacturing, Service and Retailing.
c. Sole Trader, Shareholders and Cooperatives.
d. Sole Trader, Partnership and Limited
Company
42. Organisational structures can be
divided into the following three broad
categories
a. Large, medium, small.
b. Structures based on Functions, Divisions
and Matrix.
c. Strict hierarchy, Board Control, devolved
control.
d. Collective control, Co-operative
arrangements, shareholder control.
43. Empowerment is expected to increase
efficiency, what makes it effective:
a. True empowerment avoids the emergence
of anarchy.
b. The notion of shared direction - strategic
intent - ensures individual freedom and
concerted and coordinated effort.
c. Empowerment creates networking.
d. All the above.
44. The acronym SWOT is used to analyse
the company's
a. internal threats and opportunities as well as
strengths and weaknesses
b. internal strengths, opportunities and
external weaknesses and threats
c. external strengths and weaknesses plus the
internal opportunities and threats.
d. the internal strengths and weaknesses as
well as the external threats and opportunities.
45. The function of Operations within the
company is responsible for:
a. the Transformation process
b. making tangible products.
c. the Transfer Process.
d. transforming raw materials into tangible
goods.
46. An intangible product is produced by :
a. a manufacturing company.
b. R&D as a "ghost" proposal for a new
product.
c. a service company
d. either a manufacturing or service company.
47. The elements of management
accounting are:
a. Budgeting, cost accounting, investment
appraisal, cash flow management and
corporate strategy.
b. Budget control, cost control, investment
planning, cash flow control and corporate
management.
c. Costings, investment, cash flow and
payment of suppliers.
d. Debtor Control, costings, cash flow and
supplier payment.
48. Financial reporting is done by:
a. written and verbal reports to the Directors
and Senior Managers.
b. verbal presentations to Directors,
Shareholders, Tax office and Bankers.
c. by publication of both the Profit & Loss
Account and the Balance Sheet.
d. the Balance Sheet and Profit and Loss
Account are purely for internal distribution.
5 | P a g e Centre for Collaboration of Industry and Institutions (CCII) – www.cmju.in
49. Innovation is involved with more than
just new product development. These
include:
a. General improvements across the company
b. Process improvement, new methods of
administration and control, new approaches to
marketing and fresh approaches to distribution
and delivery of product or service.
c. New methods in operations coupled to
product development.
d. Purely innovation as related to the
marketing mix.
50. Governments can influence spending
by companies and individuals by:
a. Acts of parliament and public speeches
b. Creating a recession
c. Calling an election.
d. Altering public spending or taxation either
positively or negatively.
51. GNI and GNP stand for:
a. Gross national income and gross national
production
b. Gross national innovation and gross national
production
c. Gross national income and gross national
product.
d. Gross national innovation and gross national
product.
52. Monopolistic competition differs from
perfect competition primarily because:
a. in monopolistic competition, entry into the
industry is blocked.
b. in monopolistic competition, firms can
differentiate their products.
c. in monopolistic competition, there are
relatively few barriers to entry.
d. in perfect competition, firms can
differentiate their products.
53. In monopolistic competition, firms
achieve some degree of market power:
a. by producing differentiated products.
b. because of barriers to exit from the
industry.
c. by virtue of size alone.
d. because of barriers to entry into the
industry.
54. A monopolistically competitive firm
that is incurring a loss will produce as
long as the price that the firm charges is
sufficient to cover:
a. advertising costs.
b. variable costs.
c. fixed costs.
d. marginal costs.
55. A firm in a monopolistically
competitive industry:
a. sells a fixed amount of output regardless of
price.
b. can sell an infinite amount of output at the
market-determined price.
c. must lower price to sell more output.
d. must raise price to sell more output.
56. The long-run equilibrium outcomes in
monopolistic competition and perfect
competition are similar because in both
market structures:
a. firms realise all economies of scale.
b. firms will be producing at minimum
average cost.
c. firms will only earn a normal profit.
d. the efficient output level will be produced
in the long run.
57. Which of the following statements
best describes the outcome under
monopolistic competition?
a. It is not efficient because too little output is
produced and the output that is produced
is produced at a cost above minimum
average total cost.
b. It is not efficient because too little output is
produced, but is efficient in that the output
produced is produced at minimum average
total cost.
c. It is efficient because entry is free and
economic profits are eliminated in the long
run.
d. It is efficient because the right amount of
output is produced, but not efficient in that
the output produced is produced at a cost
above minimum average total cost.
58. A form of industry structure
characterised by a few firms, each large
enough to influence market price is:
a. monopoly.
b. oligopoly.
c. monopolistic competition.
d. perfect competition.
6 | P a g e Centre for Collaboration of Industry and Institutions (CCII) – www.cmju.in
59. Which of the following statements
best describes the outcome under
monopolistic competition?
a. In monopolistic competition, there are too
few firms and each firm produces a slightly
different product at a scale that is greater
than optimal.
b. In monopolistic competition, there are too
many firms and each firm produces a
slightly different product at the optimal
scale.
c. In monopolistic competition, there is the
correct number of firms and each firm
produces a slightly different product at an
optimal scale.
d. In monopolistic competition, there are too
many firms and each firm produces a
slightly different product at a scale that is
less than optimal.
60. An industry that has a relatively small
number of firms that dominate the market
is called:
a. a natural monopoly.
b. a merged industry.
c. a colluding industry.
d. a concentrated industry.
61. Assume that firms in an oligopoly are
currently colluding to set price and output
to maximise total industry profit. If the
oligopolists are forced to stop colluding,
the price charged by the oligopolists will
_______ and the total output produced
will _________.
a. decrease; increase
b. decrease; decrease
c. increase; increase
d. increase; decrease
62. A price- and quantity-fixing
agreement is known as:
a. price concentration.
b. collusion.
c. price leadership.
d. game theory.
63. A group of firms that gets together to
make price and output decisions is called:
a. an oligopoly.
b. a concentrated industry.
c. price leadership.
d. a cartel.
64. In which of the following
circumstances would a cartel be most
likely to work?
a. The coffee market, where the product is
standardised and there are a large number
of coffee growers.
b. The market for copper, where there are
very few producers and the product is
standardised.
c. The automobile industry, where there are
few producers but there is great product
differentiation.
d. The fast-food market, where there are a
large number of producers but the demand
for fast food is inelastic.
65. The least demanding targeting
strategy in international marketing is:
a. differentiated.
b. focused.
c. undifferentiated.
d. concentrated.
66. A marketing director for a car
manufacturer is given particular
responsibility for the Far East markets.
Which information will the marketing
director require as a priority in order to
analyse and screen these markets?
a. Price levels in each country.
b. The number of cars sold and income
distribution per country.
c. Competition levels in each country.
d. All of the above.
67. One of the following is not a variable
within demographic segmentation:
a. birth rates.
b. gender.
c. income.
d. consumer lifestyles.
68. SMEs' choice for international market
selection is often limited to:
a. immediate neighbours.
b. identical market segments.
c. economic criteria.
d. North America.
69. A marketing director for a condom
manufacturer is given particular
responsibility to market condoms
internationally. Which environmental
factors will likely have the greatest
impact on the marketing director's
decision?
a. Socio-cultural.
b. Competition.
c. Technological.
d. The condom supply chain.
7 | P a g e Centre for Collaboration of Industry and Institutions (CCII) – www.cmju.in
70. Which of the following are positive
reasons for internationalization?
a. Economies of scale.
b. Market diversification.
c. International competitiveness.
d. All of the above.
No comments:
Post a Comment