National Management college – Perundurai
CA Foundation – Business Economics
Max. Time: 35 minutes
Total Marks : 30
- Internal Cause for Business Cycle include
(a) Money Supply
(b) Wars
(c) Weather Cycles
(d) Changing Technology
- According to trade cycles occur due to onset of innovations.
(a) Hawtrey
(b) ADAM Smith
(c) JM Keynes
(d) Schumpeter
- Which of the following is not an example of coincident indicator?
(a) Industrial production
(b) inflation
(c) Retail sales (d) New orders for plant and equipment
- Peaks and troughs of the business cycle are known collectively as
(a) Volatility
(b) Turning points
(c) Equilibrium points (d) Real business cycle events
- Industries that are extremely sensitive to the business cycle are the
(a) Durable goods and service sectors.
(b) Non – durable goods and service sectors.
(c) Capital goods and non – durable goods sectors
(d) Capital goods and durable goods sectors.
- Even with lower rate of interest, demand for credit declines in
(a) Expansion Phase
(b) Peak
(c) Contraction Phase (d) Depression
- The trough of a business cycle occurs when hits its lowest point.
(a) Inflation in the economy
(b) the money supply (c) aggregate economic activity
(d) the unemployment rate
- Successive generations of an Undivided Family are Know as HUF.
(a) 2
(b) 3
(c) 4
(d) 5
- Which of the following is an advantage of joint ownership?
(a) Quick decisions
(b) Pooling of Capital
(c) Personal Interest
(d) All the above10. What is the psychological motive of employment
(a) Service to society
(b) Earning livelihood
(c) Personal Interest
(d) Displaying skills
- Transfer of Interest exists in-
(a) Business
(b) Profession
(c) Employment
(d) None of the above
- Which of the following occupations requires rendering of services based upon specialized knowledge
and membership of an accreditation and assessment body?
(a) Employment
(b) Profession
(c) Business
(d) Agriculture
- Trading implies buying for the purposes of selling. Applying this criterion, tell which of the following
activities would not quality as trading?
(a) Purchase of goods in bulk quantity from the manufacture and sale in smaller quantities to the
retailers
(b) Buying from the wholesaler and selling it to the consumers
(c) Buying from the retailer for self – consumption
(d) Purchase of raw materials from the suppliers for further processing in the factory
- Which is not characteristic of monopoly?
(a) The firm is price – taker
(b) There is a single firm
(c) The firm produces a Unique product
(d) The existence of some advertising
- The three most valuable attributes to be successful in business –
(I) Can – Do Attitude
(ii) Resistance to change
(iii) Commercial Awareness
(iv) Traditional approach
(v) Contentment
(vi) Technical Skills
(a) (i),(ii) and (iii)
(b) (i),(iii) and (vi)
(c) (iii), (v) and (vi)
(d) (iv), (v) and (vi)
16.Kinked demand curve of the Oligopoly indicatesI. If one firm decreases price other firms also decreases the price
- If one firm increases price other firms also increases the price.
III. If one firm decreases the price other firms does not decrease the price.
- If one firm increases the price other firms does not increase the price.
(a) Only I
(b) II and IV
(c) I and IV
(d) II and
- The demand curve of an oligopolist is
(a) Determinate
(b) Indeterminate
(c) Circular
(d) Vertical
- Price Leadership is form of –
(a) Monopolistic Competition
(b) Monopoly
(c) Non – Collusive
(d) Perfect Competition
- Which one of the following is the best example of agreement between Oligopolists?
(a) GATT
(b) OPEC
(c) WTO
(d) UNIDO
- In Monopolistic Competition, a Firm is in long run equilibrium –
(a) at the minimum point of the LAC Curve
(b) in the declining segment of the LAC Curve.
(c) in the rising segment of the LAC Curve.
(d) when price is equal to Marginal Cost.
- In Monopolistic Competition, the long run equilibrium price will be equal to
(a) Marginal Revenue (b) Average cost
(c) Marginal cost
(d) Both (a) and (c)
- Under Monopolistic Competition, the Firm’s Demand Curve us –
(a) Horizontal Line, parallel to X Axis
(b) Vertical Line, parallel to Y Axis
(c) Negatively Sloped
(d) Kinked
- Under Monopolistic Competition, each Firm’s control over price is –
(a) Nil
(b) Full and Absolute
(c) Reasonable
(d) None of the above
- Selling outlay is an essential part of which of the following market situation(a) Monopolistic Competition
(b) Perfect Competition
(c) Monopoly
(d) Pure Competition
- Barriers to entry like ———- allows the Monopolist to charge a price much below then the price of
new entrant, thereby driving the new entrant out of business.
(a) Economics of Scale
(b) Product Differentiation
(c) Price Discrimination
(d) High Quality Product
- In the case of Monopoly –
(a) MR Curve cannot be defined
(b) AR Curve cannot be defined
(c) Short Run Supply Curve cannot be defined
(d) None of the above
- Abnormal profits exists in the long run only under———
(a) Monopoly (b) Perfect competition
(c) Monopolistic competition (d) Oligopoly
- Under which of the followings forms of market structure does a firm has very considerable control
over the price of its product?
(a) Monopoly (b) Perfect competition (c) Monopolistic competition (d) Oligopoly
- Which of the following statements is incorrect?
(a) Evan a monopolistic firm can have losses.
(b) Firm in a perfectly competitive market are price takers.
(c) It is always beneficial for a firm in a perfectly competitive market to discriminate prices.
(d) Kinked demand curve is related to an oligopolistic market.
30.Under Monopolistic competition the cross elasticity of demand for the product of a single firm would
be:
(a) Infinite
(b) Highly elastic
(c) Highly inelastic
(d) Zero
