Mumbai University IDOL
M.Com Part 1 Economics MCQ
1 A tax is shifted ___________ to producers if
the supply is inelastic relative to demand.
A. backward
B. steeper
C. forward
D. upward
ANS: A
2 Price ceiling is a legal __________on the
price at which a good can be sold.
A. maximum
B. minimum
C. optimum
D. efficient
ANS: A
3 The bandwagon effect makes the market demand
curve for the commodity to be ______
A. more
elastic
B. less
elastic
C. unitary
D. neutral
ANS: A
4 the Veblen effect also give rise to
__________ which result in ‘Z’ shaped demand curve
A. Giffen
paradox
B. Veblen
paradox
C. bandwagon
effect
D. index
paradox
ANS: B
5 in the equation Dx= a- b Px , a denotes the
________of the demand .
A. scarcity
B. slope
C. attributes
D. cost
ANS: A
6 ________price influences the supply of a
commodity.
A. Reservation
B. Optimum
C. Negative
D. Equilibrium
ANS: A
7 When demand is ______, price and total
revenue move in the same direction .
A. elastic
B. unitary
elastic
C. inelastic
D. perfect
elastic
ANS: C
8 the demand for food items is _________
A. inelastic
B. elastic
C. unitary
elastic
D. perfect
inelastic
ANS: D
9 if demand is inelastic relative to supply,
most of tax burden is shifted to _______
A. seller
B. producer
C. both
seller and buyer
D. consumers
ANS: D
10 when the government impose the price floor
below the __________price , the price floor is not binding.
A. reserve
B. equilibrium
C. supply
D. demand
ANS: A
11 the retail prices of all petroleum products
based on ___________formula.
A. international
parity
B. domestic
parity
C. SARC
parity
D. Asian
parity
ANS: A
12 The convex indifference curve indicates
_______ marginal rate of substitution.
A. increasing
B. constant
C. upward
D. neutral
ANS: A
13 A _____________sloping price consumption
curve indicates negative price effect.
A. downward
B. horizontal
C. forward
D. back
ward
ANS: D
14 the compensatory variation in income method
leaves the consumers on _______
A. higher
level of satisfaction
B. same
level of satisfaction
C. lower
level of satisfaction
D. parallel
level of satisfactionANS: B
15 Indifference curve sloped downward from left
to right due to______ marginal rate of substitution.
A. diminishing
B. increasing
C. neutral
D. constant
ANS: A
16 Returns to scale determine the behavior of
_________
A. short
run average cost
B. marginal
cost
C. average
fixed cost
D. long
run average cost
ANS: D
17 Which cost is incurred even if the company
is closed?
A. Sunk
cost
B. Historical
cost
C. Shutdown
cost
D. Imputed
cost
ANS: C
18 Law of Variable proportion is applicable
in_________
A. Agriculture
B. Industries
C. long
run
D. agriculture
and industry
ANS: D
19 The average product reached its maximum when
_______
A. marginal
product is zero
B. there
are increasing returns to scale.
C. marginal
cost is infinitely large
D. it is
equal to marginal product
ANS: D
20 If marginal product is greater than average
product, then as output is increased_______
A. average
product is unchanged
B. Output
cannot be increased in these circumstances
C. average
product decreases
D. average
product increases
ANS: A
21 An isoquant is _______to an iso cost line at
equilibrium point.
A. convex
B. perpendicular
C. concave
D. tangent
ANS: D
22 Economies of scale are of two kinds______ 2
A. Temporary
and permanent
B. Internal
and external
C. Managerial
and industrial
D. Natural
and artificial
ANS: B
23 Marginal cost is independent of_______
A. fixed
cost
B. average
cost
C. variable
cost
D. sunk
cost
ANS: A
24 Law of Variable proportion is applicable
in________
A. Agriculture
B. Industries
C. Only
(a)
D. Both
(a) & (b)
ANS: D
25 The production function includes all the
_______methods of production.
A. technically
optimum
B. technically
efficient
C. cost
benefit method
D. cost
out put method
the supply is inelastic relative to demand.
A. backward
B. steeper
C. forward
D. upward
ANS: A
2 Price ceiling is a legal __________on the
price at which a good can be sold.
A. maximum
B. minimum
C. optimum
D. efficient
ANS: A
3 The bandwagon effect makes the market demand
curve for the commodity to be ______
A. more
elastic
B. less
elastic
C. unitary
D. neutral
ANS: A
4 the Veblen effect also give rise to
__________ which result in ‘Z’ shaped demand curve
A. Giffen
paradox
B. Veblen
paradox
C. bandwagon
effect
D. index
paradox
ANS: B
5 in the equation Dx= a- b Px , a denotes the
________of the demand .
A. scarcity
B. slope
C. attributes
D. cost
ANS: A
6 ________price influences the supply of a
commodity.
A. Reservation
B. Optimum
C. Negative
D. Equilibrium
ANS: A
7 When demand is ______, price and total
revenue move in the same direction .
A. elastic
B. unitary
elastic
C. inelastic
D. perfect
elastic
ANS: C
8 the demand for food items is _________
A. inelastic
B. elastic
C. unitary
elastic
D. perfect
inelastic
ANS: D
9 if demand is inelastic relative to supply,
most of tax burden is shifted to _______
A. seller
B. producer
C. both
seller and buyer
D. consumers
ANS: D
10 when the government impose the price floor
below the __________price , the price floor is not binding.
A. reserve
B. equilibrium
C. supply
D. demand
ANS: A
11 the retail prices of all petroleum products
based on ___________formula.
A. international
parity
B. domestic
parity
C. SARC
parity
D. Asian
parity
ANS: A
12 The convex indifference curve indicates
_______ marginal rate of substitution.
A. increasing
B. constant
C. upward
D. neutral
ANS: A
13 A _____________sloping price consumption
curve indicates negative price effect.
A. downward
B. horizontal
C. forward
D. back
ward
ANS: D
14 the compensatory variation in income method
leaves the consumers on _______
A. higher
level of satisfaction
B. same
level of satisfaction
C. lower
level of satisfaction
D. parallel
level of satisfactionANS: B
15 Indifference curve sloped downward from left
to right due to______ marginal rate of substitution.
A. diminishing
B. increasing
C. neutral
D. constant
ANS: A
16 Returns to scale determine the behavior of
_________
A. short
run average cost
B. marginal
cost
C. average
fixed cost
D. long
run average cost
ANS: D
17 Which cost is incurred even if the company
is closed?
A. Sunk
cost
B. Historical
cost
C. Shutdown
cost
D. Imputed
cost
ANS: C
18 Law of Variable proportion is applicable
in_________
A. Agriculture
B. Industries
C. long
run
D. agriculture
and industry
ANS: D
19 The average product reached its maximum when
_______
A. marginal
product is zero
B. there
are increasing returns to scale.
C. marginal
cost is infinitely large
D. it is
equal to marginal product
ANS: D
20 If marginal product is greater than average
product, then as output is increased_______
A. average
product is unchanged
B. Output
cannot be increased in these circumstances
C. average
product decreases
D. average
product increases
ANS: A
21 An isoquant is _______to an iso cost line at
equilibrium point.
A. convex
B. perpendicular
C. concave
D. tangent
ANS: D
22 Economies of scale are of two kinds______ 2
A. Temporary
and permanent
B. Internal
and external
C. Managerial
and industrial
D. Natural
and artificial
ANS: B
23 Marginal cost is independent of_______
A. fixed
cost
B. average
cost
C. variable
cost
D. sunk
cost
ANS: A
24 Law of Variable proportion is applicable
in________
A. Agriculture
B. Industries
C. Only
(a)
D. Both
(a) & (b)
ANS: D
25 The production function includes all the
_______methods of production.
A. technically
optimum
B. technically
efficient
C. cost
benefit method
D. cost
out put method
ANS: B
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