Reg.

Number:

Model Question Paper

Programme : MBA Semester : I

Course Title : Managerial Economics Course Code : OLMBA502

Faculty : Class Nbr :

Duration : 2 Hrs. 30 Mins. Max. Marks : 100

PART – A

Answer All the Questions (10 X 1 Marks = 10 Marks)

Q.No. Question Description Marks

1. Economics is _____________ 1
a. Science b. Arts c. Both art and science
2. Which type of utility can be measured directly_________ 1
a. Ordinal b. Cardinal c. Both cardinal and ordinal
3. Demand and Supply are the two eyes of the market- True, or False 1

4. Production Function states the relationship between __________ 1

a. Input & output
b. Demand and supply
c. Revenue and price
d. Profit and price
5. The shape of marginal cost curve is ____________ 1
a. V shaped b. U shaped c. L shaped
6. Which of the following factors is not a characteristic of perfect competition? 1
a) A large number of buyers and sellers
b) Well-informed buyers and sellers about product prices
c) Individual firms spend a considerable amount on advertising
d) No restrictions on entry into or exit from the industry
7. In which form of market structure is the degree of control over the price of its product by a 1
firm very large?
a) Monopoly
b) imperfect competition
c) Oligopoly
d) Perfect competition

8. Which of the following, is not a phase of Circular Flow of income? 1

a) Production Phase
b) Income phase
c) Expenditure phase
d) Growth phase

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9. Which of the following agencies is responsible for formulating the Fiscal Policy in India? 1
a) Securities and Exchange Board of India (SEBI)
b) Reserve Bank of India (RBI)
c) Ministry of Finance, Government of India
d) National Bank for Agricultural and Rural Development (NABARD)
10. Which of the following is a method to measure the National Income? 1
a) Expenditure method
b) Income method
c) Product method
d) All of the above
PART – B
Answer All the Questions (15 X2=30 Marks)
11. Marginal utiliy is the _______ utility derived from the consumption of an additional unit 2
of commodity.
a. Total b. average c. additional d. all the above
12. Reasons for demand curve sloping downwards __________________ 2
a. Law of Diminishing Marginal Utility
b. Substitution Effect
c. Income Effect
d. All the three
13. _____________ relationship between price and supply 2
a. Inverse
b. Direct
c. Parallel
d. Noe of the above
14. Law of variable proportions can also be called as __________ 2
a. Law of diminishing returns
b. Long run returns
c. Marginal rate of returns
d. Law of excess returns
15. Long run average cost curves can also called as ________ 2
a. Planning curve
b. Marginal cost curve
c. Total cost curves
d. Additional cost curves
16. Law of diminishing marginal utility was written by __ 2
a. Adam Smith
b. Alfred Marshall
c. Keynes
d. Prof. Samuelson
17. Complete Enumeration Survey is the study of __________ 2
a) Entire population
b) Sample population
c) Group of people
d) Specific people
18. Consumer Surplus are______ 2
a) Discounts
b) Free gifts/offers
c) Price reduction
d) All the three

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19. Which of the following is true for Disposable Income? 2
a) Disposable Income is the difference between Private Income and Indirect Taxes
b) Disposable Income is the difference between Personal Income and Indirect Taxes
c) Disposable Income is the difference between Private Income and Direct Taxes
d) Disposable Income is the difference between Personal Income and Direct Taxes
20. Which of the following is the correct definition for the Gross Domestic Product (GDP) of a 2
country?

a) The Gross Domestic Product is the total monetary value of the economic transactions
within a country in a given year
b) The Gross Domestic Product is the total value of both monetary and non-monetary
goods and services in a country within a given year
c) The Gross Domestic Product is the total value of tradable goods produced in a country
within a given year
d) None of the above
21. According to the effective demand principle 2
a) a certain price, the output shall not be determined by any known factor
b) at certain price, the output will remain unaffected by rise or fall in demand
c) at a certain price, equilibrium output will be solely determined by the aggregate
demand
22. If potential GDP increases, then the 2
a) aggregate supply curve shifts leftward.
b) aggregate supply curve shifts rightward.
c) real wage rate increases.
d) real wage rate falls.
e) aggregate demand curve shifts rightward.

23. In closed economy, which of the following Sectors is not included? 2

a) Household
b). Local Firms
c). Local Government
d). Rest of the world

24. During inflation, the Government will engage in a contractionary money policy by ______ the 2
money supply and ______ the interest rate.
a) Decreasing; increasing
b) Increasing; decreasing
c) Decreasing; decreasing
d) Increasing; increasing

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25. A higher real interest rate ______ investment spending and ______ consumption spending. 2
a) Increases; decreases
b) Decreases;increases
c) Increases;increases
d) Decreases;decreases
PART – C

Answer any six Questions (6 X 10 Marks = 60 Marks)

26. Examine the different types of demand forecasting methods. 10

27. Short run period caries different types of expenditures. Explain the short run cost with the help 10
of diagram.
28. State the importance of economies of scale with your explanation. 10

29. Explain the characteristics of a monopolistically competitive market? What happens to the 10
equilibrium price and quantity in such a market if one firm introduces new, improved product.
30. Fiscal policy is the most powerful tool of achieving macroeconomic goals. Do you agree with 10
this statement? Give reasons for your answers.
31. Illustrate graphically the circular flow of income and expenditure in a four-sector model. 10

32. Explain the difficulties involved in the measurement of national income. 10

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