Q1. A firm’s average fixed cost is Rs. 20 at 6 units of output. What will it be at 3 units of output?
(a) Rs. 60
(b) Rs. 30
(c) Rs. 40
(d) Rs. 20
Q2. Which of the following statement is true?
(a) The services of a doctor are considered production.
(b) Man can create matter.
(c) The services of a housewife are considered production.
(d) When a man creates a table, he creates matter.
Q3. Which of the following is a function of an entrepreneur?
(a) Initiating a business enterprise.
(b) Risk bearing.
(d) All of the above.
Q4. In describing a given production technology, the short run is best described as lasting:
(a) up to six months from now.
(b) up to five years from now.
(c) as long as all inputs are fixed.
(d) as long as at least one input is fixed.
Q5. If decreasing returns to scale are present, then if all inputs are increased by 15% then:
(a) output will also decrease by 15%.
(b) output will increase by 15%.
(c) output will increase by less than 15%.
(d) output will increase by more than 15%.
Q6. The production function is a relationship between a given combination of inputs and:
(a) another combination that yields the same output.
(b) the highest resulting output.
(c) the increase in output generated by one-unit increase in one output.
(d) all levels of output that can be generated by those inputs.
Q7. If the marginal product of labour is below the average product of labour, it must be true that:
(a) the marginal product of labour is negative.
(b) the marginal product of labour is zero.
(c) the average product of labour is falling.
(d) the average product of labour is negative.
Q8. The average product of labour is maximized when marginal product of labour:
(a) equals the average product of labour.
(b) equals zero.
(c) is maximized.
(d) none of the above.
Q9. The law of variable proportions is drawn under all of the assumptions mentioned below except the assumption that:
(a) the technology is changing.
(b) there must be some inputs whose quantity is kept fixed.
(c) we consider only physical inputs and not economically profitability in monetary terms.
(d) the technology is given and stable.
Q10. What is a production process?
(a) technical relationship between physical inputs and physical output.
(b) relationship between fixed factors of production and variable factors of production.
(c) relationship between a factor of production and the utility created by it.
(d) relationship between quantity of output produced and time taken to produce the output.
Q11. The bank rate means?
(a) Rate of interest charged by commercial banks from borrowers
(b) Rate of interest at which commercial banks discounted bills of their borrowers
(c) Rate of interest allowed by commercial banks on their deposits
(d) Rate at which RBI purchases or rediscounts bills of exchange of commercial banks
Q12. Which of the following is not a member of the World Bank Group?
(a) International Bank of Reconstruction and Development
(b) International Development Association
(c) Bank of International Settlement
(d) International Finance Corporation
Q13. Statutory cash reserve ratio for scheduled banks is regulated by Reserve Bank of India under powers conferred upon it by?
(a) Reserve Bank of India Act, 1934
(b) Banking Regulation Act, 1949
(c) Companies Act, 1956
(d) Union Ministry of Finance
Q14. Fiscal deficit is?
(a) Total income less Govt. borrowing
(b) Total payments less total receipts
(c) Total payments less capital receipts
(d) Total expenditure less total receipts excluding borrowing
Q15. In the capital market, the term arbitrage is used with reference to?
(a) Purchase of securities to cover the sale
(b) Sale of securities to reduce the loss on purchase
(c) Simultaneous purchase and sale of securities to make profits from price
(d) All of the above