1) Two major functions of managerial economist are-------------

a) Decision making b) Forward planning c) all of theme d) none of theme

2) a) ME helps in the optimum use of scarce resources to maximize firm’s profit

b) Strategic planning provides a framework on which short term decisions can be
made
c) Area of managerial economics is include impact of liberalization,
globalization, privatization and mercerization on the operations of firm
d) Pricing decision is related to fixing the prices of goods and services
a) TTTT b) TFTT c) TFTF d) TTFF

1) a) Demand is different from desire, want, will or wish

b) Demand should be backed up by adequate purchasing power
c) Demand is related to a person, place and time
d) When utility is low then demand is high and vice versa
a) TTFF b) TTTT c) TFTF d) TTTF

2) Demand is equal to desire to buy + ability to pay + -----------

a) Willingness to pay b) adequate purchasing power c) All of theme d) none of
them

3) a) The demand schedule explains the functional relationship between price and
quantity variations
 b) The total quantity of a commodity demanded at different prices in a market
by the whole body consumers at a particular period of time is called market
demand schedule
c) The graphical representation of the demand schedule is called as a demand curve
d) Market demand schedule helps to know the various quantities that are likely to
be demanded at different prices
a) TTTT b) TTFF c) FFTT d) FFFT

4) There is a ------------- relation between Price and quantity demanded

a) Direct b) inverse c) all of these d) none of these

5) When purchasing power of a consumer would go up is called ----------

a) Price effect b) Income effect c) substitution effect d) None of these

6) When a product becomes cheaper is called---------------

a) Price effect b) Income effect c) substitution effect d) None of these

7) Exception of law of demand stats that with a fall in price, demand is

--------------and vice versa
a) fall b) rise c) some time rise some time fall d) none of these

8) ------------ states that demand for status symbol goods would go up with a rise in
price and vice versa
a) Giffen’s Paradox b) Vablen’s effect c) Price effect d) Income effect
9) Elasticity of demand is generally defined as the ----------- or ------------ of
demand to a given change in the price of a commodity
a)Responsiveness , sensitiveness b) non responsiveness , sensitiveness c)
Responsiveness , no sensitiveness

10) When original demand is 20 units, new demand is 60 units , original price is 6,
new price is 4 then price elasticity of demand is --------
a) 6 b) -6 c) 4 d) -4

11) When a very small change in price leads to an infinite change in demand it
called ----------
a) Perfectly elastic demand b) perfectly inelastic demand c) relative elastic
demand d) relative in elastic demand

12) In case of relative elastic demand ED is equal to -------

a) Greater than one b) less than one c) Zero d) Infinite

13) If a commodity has no substitutes in the market, demand tends to be ----------

a) inelastic b) elastic c) Zero d) Infinity

14) For complementary goods demand is -----------

a)elastic b) Zero c) inelastic d) Infinity