MCQ on Managerial Economics 3

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Objective Questions and Answers of MBA: MCQ on Managerial Economics 3

Subject: MCQ on Managerial Economics 3

Part 3: List for questions and answers of Managerial Economics


Q1. Managerial economics cannot be used to identify

a) Microeconomic consequences of managerial behavior

b) How macroeconomic forces affect the organization.

c) goals of the organization.

d) Ways to efficiently achieve the organization’s goals


Q2. One equates price and MC to maximise profit the other one equates MC and MR for the same purpose; they are

a) Monopolist and perfect competitor

b) Oligopolist and monopolist

c) Monopsonist and perfect competitor

d) Perfect competitor and duopolist


Q3. Increasing returns to scale can be explained in terms of

a) External and internal diseconomies

b) External and internal economies

c) External diseconomies and internal economies

d) Optimum factor combination


Q4. A rightwards shift in supply curve indicates

a) An increase in quality supplied

b) A decrease in supply

c) An increase in supply

d) None of the above


Q5. OPEC is an example of the type of producer’s organisation known as a

a) Trust

b) Producer’s Cooperative

c) Marketing board

d) Cartel


Q6. The total utility is maximum when

a) M.U. is zero

b) M.U. is equal to A.U

c) M.U. is the highest

d) A.U. is the highest 


Q7. The advertisement cost is included in

a) Always in variable cost

b) Sometimes in fixed cost sometimes in variable cost

c) Fixed cost

d) Never included in variable cost


Q8. The elasticity of substitution between two inputs in CES production function

a) Decreases continuously

b) Increases continuously

c) Remains constant

d) None of these


Q9. On an indifference map, if the income consumption curve slopes downwards to the right it shows that

a) Both X and Y are superior goods

b) Y is an inferior good

c) X is an inferior good

d) Both X and Y are inferior goods


Q10. An entrepreneur will stay in business in the long run as long as he meets

a) Variable costs of production

b) Fixed costs of production

c) All costs of production

d) None of these


Q11. Under bilateral monopoly the price is higher if

a) The monopolist has his way

b) The monopsonist has his way

c) The monopolist acts as a competitor

d) The monopsonist sells his own product in a monopoly market


Q12. A perfectly competitive firm will always expand output as long as

a) Rising marginal cost is less than the average cost

b) Rising marginal cost is less than the marginal revenue

c) Rising marginal cost is less than price

d) None of the above 


Q13. Expanding output till the rising marginal cost is less than price, is the nature of

a) Perfectly competitive industry

b) Perfectly competitive market

c) Perfectly competitive firm

d) Imperfectly competitive market


Q14. When a monopolist is in

a) Long-run equilibrium, he may or may not be in short-run equilibrium

b) Long-run equilibrium, he will also be in short-run equilibrium

c) Short-run equilibrium, he will also be in long-run equilibrium

d) None of the above


Q15. An indifference curve is always

a) A vertical straight line

b) Convex to the origin

c) Concave to the origin

d) A horizontal straight line


Q16. Other things remaining the same, when a consumer’s income increases, his equilibrium point moves to

a) A higher indifference curve

b) Moves to the left-hand side on the same indifference curve

c) Remains unchanged on the same indifference curve

d) A lower indifference curve


Q17. If the price is statutorily fixed and equal to MC, monopoly profits will be

a) At same level

b) Decreased

c) Eliminated

d) Increased


Q18. Average fixed cost can be obtained through

a) AFC = TFC/Q

b) AFC = TC + TVC


d) AFC = MC + TVC 


Q19. If the supply curve of a commodity is positively sloped, a rise in the price of the commodity ceteris paribus, results in and is referred to as

a) A decrease in both demand and supply

b) A decrease in quantity supplied

c) A decrease in supply

d) A decrease in demand


Q20. Where the leading firms in an industry combine to pursue a common policy in their interest but retain their separate identities, such combination is generally known as

a) Joint-stock company

b) Cartel

c) Trust

d) Holding company


Part 3: List for questions and answers of Managerial Economics


Q1. Answer:c

Q2. Answer:a

Q3. Answer:b

Q4. Answer:c

Q5. Answer:d

Q6. Answer:a

Q7. Answer:d

Q8. Answer:c

Q9. Answer:b

Q10. Answer:d

Q11. Answer:a

Q12. Answer:d

Q13. Answer:c

Q14. Answer:b

Q15. Answer:b

Q16. Answer:a

Q17. Answer: c

Q18. Answer:a

Q19. Answer:c

Q20. Answer:b