Business Economics 7

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Objective Questions and Answers of MBA: Business Economics 7

Subject: Objective Questions and Answers of MBA: Business Economics 7

Part 7: Objective questions and answers of Business Economics


Q1. So long as Average Revenue is falling, Marginal Revenue will be ______________

Average Revenue

a) Less than

b) More than

c) Equal to

d) None of these


Q2. ______________= R2-R1/Q2-Q1.

a) Average revenue

b) Total revenue

c) Marginal revenue

d) Incremental revenue


Q3. In the oligopoly market there are

a) Large no. Of firms

b) A few firms

c) A single firm

d) An infinite no. Of firms


Q4. The law of diminishing returns applies more to

a) Agriculture

b) Industry

c) Services

d) Commerce


Q5. In case of ______________ quantity demanded changes less than proportionate to changes in price

a) Perfectly elastic demand

b) Perfectly inelastic demand

c) Relative elastic demand

d) Relative inelastic demand


Q6. Target pricing is also called as

a) Cost plus pricing

b) Rate of return pricing

c) Mark up pricing

d) None of these


Q7. The monopoly can be controlled by:

a) Social boycott

b) Antimonopoly legislation

c) Public ownership

d) All of these


Q8. ______________ is the method of leadership pricing

a) Going rate pricing

b) Follow up pricing

c) Barometric pricing

d) Parity pricing


Q9. The competitive firm’s long run supply curve is the portion of it’s ______________ curve lies above average total cost.

a) Marginal cost

b) Revenue cost

c) Fixed cost

d) All of these


Q10. Marginal revenue is ______________ at the quantity that generate maximum total revenue and negative beyond that point.

a) Zero

b) One

c) +1

d) −1


Q11. Cinema Theater, telephone bills etc.. Are following

a) Full cost pricing

b) Marginal cost pricing

c) Differential pricing

d) Mark up pricing


Q12. Which is the feature of perfect competition?

a) Large number of buyers and sellers

b) Freedom of entry and exit

c) Normal profit in the long run

d) All of these


Q13. Which is/are the salient features of monopolistic competition?

a) Large number of sellers

b) Normal profit

c) Free entry and exit of firms in industry

d) All of these


Q14. The claim that, other things equal, the quantity supplied of a goods rises when the price of goods raises known as:

a) Law of economics

b) Law of supply

c) Law of demand

d) All of these


Q15. The demand curve of a firm in the case of perfect competition is:

a) Parallel to output axis

b) Increasing with the output axis

c) Decreasing with the output axis

d) Complete


Q16. The number of firms under oligopoly is

a) 1

b) 2

c) Many

d) Few


Q17. A positive income elasticity may be

a) Unit income elasticity

b) Income elasticity greater than unity

c) Income elasticity less than unity

d) Any of the above


Q18. When the quantity demanded falls due to a rise in price, it is called

a) Extension

b) Upward shift

c) Downward shift

d) Contraction


Q19. Exceptional Demand Curve (Perverse demand curve)

a) Moving upward from left to right

b) Moving upward from right to left

c) Moving horizontally

d) Moving vertically


Q20. Which of the following method of pricing is popular in wholesale and retail trades?

a) Skimming

b) Penetrating

c) Full cost pricing

d) Target pricing


Part 7: Objective questions and answers of Business Economics


Q1. Answer a


Q2. Answer c


Q3. Answer b


Q4. Answer a


Q5. Answer d


Q6. Answer b


Q7. Answer d


Q8. Answer c


Q9. Answer a


Q10. Answer a


Q11. Answer c


Q12. Answer d


Q13. Answer d


Q14. Answer b


Q15. Answer a


Q16. Answer d


Q17. Answer d


Q18. Answer d


Q19. Answer a


Q20. Answer c

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