CA (Found) MOCK TEST NOV 2018

KUNDU SIR 9830700982 / 6290357170 / 9674147701

1. The management of a business unit generally needs to make

a) strategic decision
b) tactical decision
c) operational decision
d) all the above
2. _________ defined business economics in terms of the use of economic analysis in the formulation of business policies.
a) Marshall
b) Hicks
c) Joel Dean
d) Samuelson
3. Which of the following is not the subject matter of microeconomics?
a) factor pricing
b) economic conditions of unorganized section of the people
c) location of industry
d) the general price level
4. Business economics has no connection with which of the following?
a) mathematics
b) management theory
c) auditing
d) finance
5. Business economics adopt which of the following methods to help the firm maintain optimum stock of inventories?
a) ABC analysis
b) simple simulation exercises
c) mathematical models
d) all the three
6. Which of the following is not a central problem of an economy?
a) What to produce?
b) How much to produce?
c) For whom to produce?
d) What provisions are to be made for economic growth?
7. Which of the following is not a merit of mixed economy?
a) economic freedom and existence of private property
b) encourages enterprise and risk taking
c) appropriate incentives for innovation and technological progress
d) absence of strong governmental initiatives, leading to disproportionate growth of private sector
8. The difference between demand and quantity demanded is
a) demand is a particular quantity and quantity demanded is the entire quantity of the demand schedule
b) demand is not a fixed quantity and quantity demanded is not the actual quantity purchased
c) demand is the specific quantity and quantity demanded are all the different actual quantities demanded at different prices.
d) none of these
9. Suppose the price of a icecream is ₹30. Laxmi, a rational buyer, who loves icecream has already eaten 3. Her MU from eating the 3 rd
icecream is 90 utils. If MU of ₹1 is 3 utils, then
a) she should eat more icecream
b) she should stop
c) she cannot decide
d) information given is insufficient to answer the question
10. The price elasticity of demand of a good is -0.5. At a price of ₹20 per unit its demand is 300 units. At what price will its demand increase
by 10%?
a) 16
b) 18
c) 20
d) 12
11. 2 commodities are called competing goods when
a) they satisfy same want

1
 b) can be used in ease in place of one another
c) both a and b correct
d) when increase in price of one of them reduces the demand of another.
12. When an individual demand a LED TV as because his neighbour has demanded, it is called
a) bandwagon effect
b) demonstration effect
c) both a and b
d) snob effect
13. Which of the following statement is correct?
a) propensity to consume of the rich people is less than that of the poor people
b) propensity to consume of the rich people is more than that of the poor people
c) when income tends to be more equally distributed demand for luxury good increases
d) when income tends to be more equally distributed demand for necessary good decrease
14. Which of the following does not influence demand for a commodity?
a) transportation
b) wage cost
c) govt industrial and foreign policy
d) all of the above
15. Which of the following is a wrong statement?
a) all inferior goods are giffen goods
b) all giffen goods are inferior goods
c) coarse grains like low quality rice is a giffen good
d) giffen good exhibit direct price demand relationship
16. Which of the following is a conspicuous necessity of life?
a) TV set
b) coolers
c) cooking gas
d) all of the above
17. When there is an expansion of demand
a) there is downward movement on the same demand curve
b) there is upward movement along the same curve
c) there is right shift of the curve
d) there is left shift of the curve
18. As a result of fall in the price of wheat from 20 to 18 per kg the qty demanded increases from 500 to 520 kgs. Find elasticity of demand.
a) 0.37
b) 1.37
c) 0.4
d) 1.4
19. If the proportion of income spent on a good increase as income increases, then the income elasticity for the good is
a) more than 1
b) less than 1
c) equal to 1
d) 0
20. The price of 1 kg of sugar is 50. At this price 10 kg is demanded. If the price of tea falls from 30 to 25 per kg the consumption of sugar
rises from 10 to 12 kg. Find cross price elasticity of demand.
a) -1.2
b) 1.2
c) 0.2
d) -0.2
21. Long term demand forecast are generally for
a) 6 months
b) less than 1 year
c) more than 2 years
d) more than 10 years
22. The Delphi technique of demand forecast is based on
a) survey of buyers intention
b) expert opinion method
c) statistical method
2
 d) controlled experiments
23. Which of the following is not a statistical technique of demand forecasting?
a) least square method
b) regression analysis
c) cramer’s rule method
d) graphical method
24. Which of the following is not a feature of human want?
a) each want is satiable
b) some wants never recur again
c) wants arise from multiple causes
d) wants may become customs
25. Law of equi marginal utility states that the consumer is said to be at equilibrium when
a) MU of each good is proportional to its price and the last rupee spent on each commodity yields him equal MU
b) ratios of MU of 2 commodities equals their price ratios
c) only b not a
d) both a and b
26. Which of the following depicts the complete picture of consumers’ tastes and preferences?
a) IC map
b) demand curve
c) budget line
d) MU curve
27. MRS generally falls because
a) the want for a particular good is satiable so that when a consumer has more of it, his intensity of want for it decreases.
b) most goods are imperfect substitutes of each other
c) LDMU
d) for all the above
28. The IC analysis is superior to utility analysis because
a) it is based on ordinal utility theory
b) it assumes constancy of MU of money
c) it cannot divide income effect from substitution effect
d) it cannot study more than one commodity at a time
29. The supply function is given as q = -100 + 10p. Find the elasticity of supply using point method, when q is 50.
a) -3
b) 3
c) 1.5
d) 3.5
30. Which of the following is not a characteristic of labour?
a) labour is perishable
b) all labour are productive
c) labour has poor bargaining power
d) labour is mobile
31. National Highways, bridges, etc. are examples of __________ capital.
a) tangible
b) real
c) social
d) fixed
32. Which of the following is not a part of stages of capital formation?
a) willingness to save
b) large consumption expenditure
c) mobilization of savings
d) investment
33. Which of the following are assumptions of production function?
a) output is accumulated over time
b) maximum output is produced
c) innovation in technology
d) all the above
34. Which of the following is not a reason for increasing return to a factor?
a) optimum combination of factors
3
 b) better utilization of fixed factor
c) increased efficiency of variable factor
d) indivisibility of fixed factor
35. From the table below identify the return to scale in operation
Labour 2 4 12
Capital 3 6 18
Output 10 20 60
a) IRS
b) CRS
c) DRS
d) none of these
36. In Cobb Douglas production function if the sum of the exponents is less than 1 then it depicts
a) IRS
b) DRS
c) CRS
d) none of these
37. Which of the following is not an objective of an enterprise?
a) economic objective
b) inorganic objective
c) social objective
d) human objective
38. The opportunity cost of doing CA course is the
a) cost of tuition fees and books for pursuing CA course
b) other uses of money which is paid as tuition fees
c) both a and b
d) none of these
39. When there is positive external effects social cost _______ private cost.
a) more than
b) less than
c) equal to
d) is unrelated to
40. In long run modern firm face _____________ cost curves.
a) U shaped
b) downward sloping
c) L shaped
d) upward rising
41. Increase in scale, beyond the optimum level, results in
a) diseconomies of scale
b) economies of scale
c) optimum scale
d) decrease in AC
42. If the production function of a firm be Q = 5L½K½ find out the maximum possible output that the firm can produce with 100 units of L & K
each (symbols have usual meaning)
a) 500
b) 550
c) 450
d) 600
43. The total output generated by the first 4 units of variable input is 200, 350, 450 and 500 units. The MP of the 3rd unit of input is
a) 50
b) 100
c) 150
d) 200
44. Calculate the weekly TC and AVC from the following particulars
Particulars No. of workers No. of units produced per Weekly wage of each Weekly rent of Raw materials Power
employed week worker shed used
Cost 50 100 200 400 1600 300
a) 12300 & 119
b) 13200 & 109

4
 c) 12300 & 120
d) 13200 & 119
45. Suppose the cost of producing 1000 units of a product by a firm is ₹15000. The entrepreneur has invested ₹50000 in the business and the
normal rate of return in the market is 10%. If the firm is selling the product at ₹22 per unit then the per unit profit is
a) 3
b) 2
c) 1
d) 0
46. A monopoly firm attain its equilibrium at the point where
a) MC is rising
b) MC is falling
c) MC is minimum
d) any one of the above
47. According to Pigou when the monopolist can able to extract entire amount of consumer surplus it is called
a) 1st degree price discrimination
b) 2nd degree discrimination
c) 3rd degree discrimination
d) none of these
48. In which of the market form wastage of resources is minimized?
a) monopoly
b) monopolistic competition
c) perfect competition
d) oligopoly
49. According to ___________ model price is the control variable in the oligopoly market
a) Cournot
b) Stackelberg
c) Bertrand
d) Pigou
50. Insurance market is an example of
a) unregulated market
b) regulated market
c) spot market
d) none of the above
51. Suppose a book seller can sell 10 books @ of ₹200 per book. His MR from the 11 th book is ₹255. At what price did he sell the 11th book?
a) 205
b) 210
c) 200
d) 220
52. A shopkeeper sold 25 calculators @ ₹125 each. His TR increased to ₹3380 after selling 26 calculators. At what price did he sell the 26th
calculator?
a) 130
b) 125
c) 255
d) 250
53. The recovery phase in a business cycle initially starts with
a) product market
b) commodity market
c) money market
d) labour market
54. In the great depression of 1930 global GDP fell by around ___________ % between 1929 & 1932
a) 12
b) 14
c) 15
d) 16
55. According to Keynes the main cause of great depression of 1930 was
a) banking crisis and low money supply
b) lower aggregate expenditures in the economy
c) deflation & over indebtedness
5
 d) lower profits and pessimism
56. The global economic crisis of 2008-09 was due to
a) information technology bubble burst of 2000
b) reduced rate of interest in the US economy
c) low credit worthiness of the borrowers in the housing market
d) all of the above
57. Which of the following is an external cause of trade cycle?
a) fluctuation in effective demand
b) variation in govt spending
c) technology shocks
d) money supply
58. According to ___________ trade cycle is a purely monetary phenomenon.
a) Hawtrey
b) Pigou
c) Schumpeter
d) Keynes
59. 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
60. _________________ market is a combination of monopoly market and monopsony market
a) monopolistic competition
b) bilateral monopoly
c) oligopsony
d) perfect competition

******************

1d 2c 3d 4c 5d 6b 7d 8b 9b 10a
11c 12c 13a 14d 15a 16d 17a 18a 19a 20a
21c 22b 23c 24b 25d 26a 27d 28a 29b 30b
31c 32b 33b 34a 35b 36b 37b 38b 39b 40c
41a 42a 43b 44a 45b 46d 47a 48c 49c 50b
51a 52a 53d 54c 55b 56d 57c 58a 59c 60b