Managerial Economics — Part 1 MCQs with Explanations

In a monopoly market , the firm determines its equilibrium output at the point where Marginal Revenue (MR) equals Marginal Cost (MC) . The Average Revenue (AR) curve of a monopolist is the same as the demand curve , which is downward sloping. Because of this, the elasticity of demand plays an important role in determining equilibrium. When the price elasticity of demand is less than one (inelastic) , the marginal revenue becomes negative . A monopolist will never produce in this region because producing additional output would reduce total revenue. The monopolist therefore operates only in the elastic portion of the demand (AR) curve , where marginal revenue is positive . At the equilibrium point, elasticity must be greater than or equal to one . Thus, a monopolist fixes equilibrium output where the elasticity of the AR curve is greater than or equal to one . Hence, the correct answer is Option B: Greater than or equal to one .

Normative theory is the correct answer to “The emphasis of managerial economics is on”. This question is standard in competitive examination syllabi for Managerial Economics.

Accounting Theory is the correct answer to “Which is not the subject of Managerial Economics”. This question is standard in competitive examination syllabi for Managerial Economics.

1, 2 and 4 is the correct answer to “Managerial economics is concerned with which combination of the following? 1. Investment analysis and decisions 2. Production behaviour and cost analysis 3. Input reward analysis and decisions 4. Economic environment analysis”. This question is standard in competitive examination syllabi for Managerial Economics.

Accounting theory is the correct answer to “Which is not covered under the scope of managerial economics”. This question is standard in competitive examination syllabi for Managerial Economics.

goals of the organization is the correct answer to “Managerial economics cannot be used to identify”. This question is standard in competitive examination syllabi for Managerial Economics.

Slope upward from left to right is the correct answer to “The short-run supply curve of market always”. This question is standard in competitive examination syllabi for Managerial Economics.

NNP at Market Price - Indirect Taxes + Subsidy is the correct answer to “NNP at factor cost will be”. This question is standard in competitive examination syllabi for Managerial Economics.

the concept of individual's income as the money value of his earnings from productive services currently rendered by him or by his property after deduction of personal taxes and social security contributions is the correct answer to “Disposable personal income is”. This question is standard in competitive examination syllabi for Managerial Economics.

By Walras to measure cardinal utility is the correct answer to “"Utils" is a term used”. This question is standard in competitive examination syllabi for Managerial Economics.

Equal product curves is the correct answer to “Iso-quants are also known as”. This question is standard in competitive examination syllabi for Managerial Economics.

MU is negative is the correct answer to “MU curve will be below X-axis when”. This question is standard in competitive examination syllabi for Managerial Economics.

Explicit costs is the correct answer to “All money costs can be regarded as”. This question is standard in competitive examination syllabi for Managerial Economics.

government is the correct answer to “In a free market economy, the optimal quality of goods and services is determined by”. This question is standard in competitive examination syllabi for Managerial Economics.

Trader is the correct answer to “Which of the following creates time utility”. This question is standard in competitive examination syllabi for Managerial Economics.

A decrease in supply is the correct answer to “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”. This question is standard in competitive examination syllabi for Managerial Economics.

NI - Undistributed corporate profit - Taxes - Social security contributions is the correct answer to “Personal income equals”. This question is standard in competitive examination syllabi for Managerial Economics.

Compensating variation in income is the correct answer to “When the price of one commodity in a combination of commodities falls in such a way that the consumer's real income changes but he remains on the same level of satisfaction as before, it is known as”. This question is standard in competitive examination syllabi for Managerial Economics.

A small proportion of income from the tertiary sector compared to that from agriculture is the correct answer to “Which one of the following structural changes in the composition of National Income of India would characterise economic development”. This question is standard in competitive examination syllabi for Managerial Economics.

$${\text{AFC}} = \frac{{{\text{TFC}}}}{{\text{Q}}}$$ is the correct answer to “Average fixed cost can be obtained through”. This question is standard in competitive examination syllabi for Managerial Economics.

A straight line is the correct answer to “In general, if the average revenue curve is a straight line, the marginal revenue curve will be”. This question is standard in competitive examination syllabi for Managerial Economics.

a-2, b-4, c-3, d-5, e-1 is the correct answer to “Match the following. List-I List-II a. Monopoly 1. Single buyer, Single seller b. Oligopoly 2. Single seller, Many buyers c. Monopsony 3. Single buyer, Many sellers d. Duopoly 4. Few sellers, Many buyers e. Bilateral monopoly 5. Two sellers, Many buyers”. This question is standard in competitive examination syllabi for Managerial Economics.

all of the above is the correct answer to “If the demand curve confronting an individual firm is perfectlyelastic, than”. This question is standard in competitive examination syllabi for Managerial Economics.

sum of total consumption and investment expenditure is the correct answer to “The national income of a country for a given period is equal to the”. This question is standard in competitive examination syllabi for Managerial Economics.

Unitary elasticity of supply is the correct answer to “Any supply curve which is a straight line passing through the origin whatever its slopes will possess”. This question is standard in competitive examination syllabi for Managerial Economics.

Value of production for self-consumption is the correct answer to “Which one of the following factors is included in estimating national income”. This question is standard in competitive examination syllabi for Managerial Economics.

Average revenue curve lies above the MR-curve is the correct answer to “In monopoly, the relationship between average revenue and marginal revenue curves is as follows:”. This question is standard in competitive examination syllabi for Managerial Economics.

a-1, b-3, c-2, d-4 is the correct answer to “Match the following. List-I (Market Structure) List-II (Price Elasticity of Demand) a. Perfect Competition 1. Very small b. Monopolistic Competition 2. Small c. Oligopoly 3. Large d. Monopoly 4. Infinite”. This question is standard in competitive examination syllabi for Managerial Economics.

complementary to each other is the correct answer to “The smoothness and continuity of an indifference curve means that goods in question are assumed to be”. This question is standard in competitive examination syllabi for Managerial Economics.

a-1, b-2, c-3, d-4 is the correct answer to “Match the following. List-I (Types of Market) List-II (Nature of Industries) a. Perfect Competition 1. Financial markets b. Monopolistic Competition 2. FMCG market c. Oligopoly 3. Cars d. Monopoly 4. Transport”. This question is standard in competitive examination syllabi for Managerial Economics.

equal to zero is the correct answer to “In case the demand elasticity under imperfect competition is unity, the marginal revenue will be”. This question is standard in competitive examination syllabi for Managerial Economics.

change in price is the correct answer to “A movement along a demand curve indicates that a different quantity is being demanded. This movement is due to”. This question is standard in competitive examination syllabi for Managerial Economics.

absolutely correct is the correct answer to “The concept of MU for explaining diamond-water paradox is”. This question is standard in competitive examination syllabi for Managerial Economics.

A horizontal demand curve is the correct answer to “A firm under perfect competition faces for its product”. This question is standard in competitive examination syllabi for Managerial Economics.

At the minimum average cost is the correct answer to “The optimum output is the one which is produced”. This question is standard in competitive examination syllabi for Managerial Economics.

Perfect competition is the correct answer to “Which of the following market situations explains marginal cost equal to price for attaining equilibrium”. This question is standard in competitive examination syllabi for Managerial Economics.

$$\frac{{{\text{M}}{{\text{U}}_{\text{x}}}}}{{{{\text{P}}_{\text{x}}}}} = \frac{{{\text{M}}{{\text{U}}_{\text{y}}}}}{{{{\text{P}}_{\text{y}}}}} = \frac{{{\text{M}}{{\text{U}}_{\text{z}}}}}{{{{\text{P}}_{\text{z}}}}} = {\text{M}}{{\text{U}}_{\text{m}}}$$ is the correct answer to “The law of equi-marginal utility states”. This question is standard in competitive examination syllabi for Managerial Economics.

excess of income over consumption plus the net taxes is the correct answer to “Gross national savings measure the”. This question is standard in competitive examination syllabi for Managerial Economics.

no corresponding production of goods and services has taken place to match the paymerit of such funds is the correct answer to “Transfer payments by the government are not included in the net domestic product because”. This question is standard in competitive examination syllabi for Managerial Economics.

Less than the average product is the correct answer to “When average product increases, the marginal product is”. This question is standard in competitive examination syllabi for Managerial Economics.