Managerial Economics Set 5
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This set of Managerial Economics Multiple Choice Questions & Answers (MCQs) focuses on Managerial Economics Set 5
Q1 | An exceptional demand curve is one that slopes
- Upward to the left
- Downward to the right
- Horizontally
- Upward to the right
Q2 | Which one is not an exception to the Law of Demand?
- Normal good
- Articles of Distinction
- Ignorance
- Inferior good
Q3 | Demand for a commodity is elastic when it has:
- Only one use
- Uses which can not be postponed
- Many uses
- Uses very essential for the consumer
Q4 | When the demand curve is a rectangular hyperbola, it represents:
- Perfectly elastic demand
- Unitary elastic demand
- Perfectly inelastic demand
- Relatively elastic demand
Q5 | The horizontal demand curve for a commodity shows that its demand is:
- Perfectly elastic
- Highly elastic
- Perfectly inelastic
- Moderately elastic
Q6 | When an individual’s income falls(while everything else remains the same), his demandfor an inferior good:
- Increases
- Decrease
- Remains unchanged
- We cannot say without additional information
Q7 | A fall in the price of a commodity whose demand curve is a rectangular hyperbola causes total expenditure on the commodity to:
- Increases
- Decrease
- Remains unchanged
- Any of the above
Q8 | The utility may be defined as:
- The desire for a commodity
- The usefulness of a commodity
- The necessity of a commodity
- The power of a commodity to satisfy wants
Q9 | The utility of a commodity is:
- Its expected social value
- The extent of its practical use
- Its relative scarcity
- The degree of its fashion
Q10 | Marginal utility curve of a given consumer is also his:
- Indifference curve
- Total utility curve
- Demand curve
- Supply curve
Q11 | The relationship between demand for a commodity and price, ceteris paribus, is:
- Negative
- Positive
- Non-negative
- Non-positive
Q12 | A demand curve which takes the form of horizontal line parallel to quantity axis illustrates elasticity which is:
- Zero
- Infinite
- Greater than one
- Less than one
Q13 | Consider a demand curve which takes the form of a straight line cutting both axes.Elasticity at the mid-point of the line would be:
- Zero
- One infinite
- infinite
- Can not be calculated
Q14 | The elasticity of demand for a product will be higher:
- The more available are substitutes for that product
- The more its buyers demand loyalty
- The more the product is considered a necessity by its buyers
- All of the above
Q15 | A consumers demand curve can be obtained from:
- ICC
- Engel curve
- Lorence curve
- PCC
Q16 | In case of Giffen goods, demand curve will slope:
- Vertical
- Horizontal
- Upward
- Downward
Q17 | Cross elasticity of demand between tea and sugar is:
- Positive
- Zero
- Infinity
- Negative
Q18 | If the percentage increase in quantity of a commodity demanded is its price, the coefficient of price elasticity of demand is:
- Greater than 1
- Equal to 1
- Less than 1
- Zero
Q19 | If the quantity of a commodity demanded remains unchanged as its price changes, thecoefficient of price elasticity of demand is
- Greater than 1
- Equal to 1
- Less than 1
- Zero
Q20 | Unitary elasticity of demand is:
- Zero
- Equal to one
- Greater than 1
- Less than 1
Q21 | The real business cycle theory is most closely related to
- Keynesian theory
- Monetarist theory
- The classical theory
- The new Keynesian theory
Q22 | In the real business cycle model, business cycles are
- Efficient and do not represent lost output
- Driven by technology shocks
- Occur when markets clear
- All of the above
Q23 | Real business cycle proponents argue that
- Recessions are caused by movements of output away from the natural rate of output
- Prices and wages are sticky
- Macroeconomics should be based on the same assumptions as microeconomics
- Monetary policy is important in determining recessions
Q24 | Which of the following statements are correct? In (the)
- Keynesian model, unemployment is voluntary.
- Real business cycle model, all unemployment is voluntary
- New classical models, there is voluntary unemployment
- Both b&c
Q25 | A usual assumption in real business cycle models is that the economy is populated by a group of identical individuals and the behavior of the group can then be explained in terms of the behavior of one individual, called a-------------
- Maximizing agent
- Representative agent
- Republican agent
- Informative agent