CA Foundation – June 2019
Question Paper (Based on Memory)
Marks 100 Time : 2 Hours
“BUSINESS ECONOMICS”
1. Applied economics includes __________
(a) Regression analysis and mathematical linear programming
(b) Capital budgeting
(c) Both a and b
(d) None
2. Macroeconomics include __________
(a) Product pricing (b) Consumer Behavior
(c) External value of money (d) Location of industry
3. Shyam : This year due to heavy rainfall my onion crop was damaged Krishna : Climate affects crop yields. Some years are bad, others are good
Hari : Don’t worry. Price increase will compensate for the fall in quantity supplied.
Radhe : The Government ought to guarantee that our income will not fall.
In this conversion, the normative statement is made by
(a) Shyam (b) Krishna
(c) Hari (d) Radhe
4. Socialism Ensures
(a) Rapid growth and balanced development
(b) Right to work
(c) Incentives for efficient economic decisions
(d) Both a and b
5. A capitalist economy consists of __________
(a) Central planning authority
(b) A mechanism to decide as what, how and for whom to produce
(c) Both a & b
(d) None of the above
6. Freedom of choice is the advantage of _________
(a) Socialism (b) Capitalism
(c) Mixed Economy (d) None of the above
7. Socialist economy is _________
(a) Self regulating
(b) Profit oriented
(c) Command economy
(d) Allocation of resources as per market requirements
8. Exploitation and inequality will be more in __________
(a) Socialism (b) Capitalism
(c) Mixed (d) All of the above
9. Business Economics is
(a) Normative in nature (b) Interdisciplinary in nature
(c) Both (d) None
10. If price decreases from Rs. 80 to Rs. 60 and elasticity of demand is 1.25 then
(a) demand increase by 25% (b) Demand decreases by 25%
(c) Remains Constant (d) None of the above
11. Which of the following is correct?
(a) Elasticity on lower segment of demand curve is greater than unity
(b) Elasticity on upper segment of demand curve is lesser than unity
(c) Elasticity at the middle of demand curve is equal to unity
(d) Elasticity decreases as one move from lower part of demand curve to upper part.
12. If maize has –0.30 as income elasticity of demand, then maize will be considered as _____
(a) Necessity (b) Inferior good
(c) Superior good (d) None
13. Contraction of supply implies ________
(a) Decrease in cost of production
(b) Decrease in price of the good concerned
(c) Decrease in price of related good
(d) Increase in price of the good concerned
14. Perishable commodities will have ______
(a) Perfectly elastic curve (b) Perfectly inelastic curve
(c) Elastic (d) Inelastic
15. Which of the following statement is correct?
(a) Supply is inversely related to its cost of production
(b) Price and quantity demand of a good have direct relation ship
(c) Taxes and subsidy has no impact on the supply of the product
(d) Seasonal changes have no impact on the supply of the commodity
16. In case of _______ goods, there is an inverse relationship between income and demand for a product.
(a) substitute goods (b) Complementary Goods
(c) Giffen Goods (d) None of the above
17. Which of the following will affect the demand for non-durable goods?
(a) Disposable Income (b) Price
(c) Demography (d) All of the above
18. When the price of tea decreases, people reduces the consumption of coffee. Then the goods are
(a) Complementaries (b) Substitutes
(c) Inferior goods (d) Normal goods
19. The price elasticity of demand at the midpoint of the straight line demand curve under point method is _________
(a) 0 (b) 1
(c) >1 (d) <1 20. Which of the following relation is true with MU? (a) When MU is positive, Total utility rises at a diminishing rate (b) When marginal utility is zero, total utility is maximum. (c) When marginal utility is negative, total utility is diminishing (d) All of the above 21. Which of the following is/ are the condition/s of theory of consumer surplus if price is same for all units he purchased? (a) Consumer gains extra utility or surplus (b) Consumer surplus for the last commodity is zero (c) Both (d) None 22. When the supply of a product is perfectly inelastic then the curve will be (a) Parallel to y – axis (b) parallel to x – axis (c) At the angle of 45o (d) Sloping upwards 23. The consumer is in equilibrium when the following condition is satisfied: (a) Budget line is the tangent to the IC Curve (b) MU X MUY MUz PX PY Pz (c) Both a & B (d) None of the above 24. Which of the following is not the property of indifference curve? (a) Slopes downwards to the right (b) Always convex to the orgin (c) Intersects each other (d) Will not touch either of the axis 25. Marginal average and total product of a firm in the short run will not comprise with ______ (a) When marginal product is at a maximum, average product is equal to marginal product, and total product is rising (b) When average product is maximum,. Average product is equal to marginal product, and total product is rising (c) When marginal product is negative, total product and average product are falling. (d) When total product is increasing, average product and marginal product may be either rising or falling. 26. When increase in demand is equal to increase in supply and equilibrium price remains constant, then what about equilibrium quantity? (a) Increases (b) Decreases (c) Remains constant (d) None of the above 27. When price is Rs. 20, Quantity demand is 10 units and price is decreased by 5% then quantity demand increased by 10% then Marginal revenue is ____________ (a) Rs. 10 (b) Rs. 11 (c) Rs. 9 (d) Rs. 20 28. A firm producing 15 units of output has average cost of Rs. 250 and Rs. 125 as per unit cost for fixed factors of production. Then average variable cost will be ________ (a) 180 (b) 150 (c) 125 (d) None of the above 29. Opportunity cost is _________ (a) Recorded in the books of accounts (b) Sacrificed alternative (c) Both a & B (d) None of the above 30. Which of the following is considered as production in economics ? (a) Helping a blind person in crossing the road (b) Group dance performance in a college annual function (c) Holding a child who is falling from a wall (d) Performing an art in a theatre 31. Diminishing marginal returns implies__________ (a) Decreasing average fixed cost (b) Decreasing average variable cost (c) Decreasing marginal cost (d) Increasing marginal cost 33. Given the relation MR = V e – 1 if the demand for a product is unitary elastic then _____ Pi l A e (a) MR = 0 (b) MR >0
(c) MR < 0 (d) None of the above
34. Which of the following is true, when the firm is at a equilibrium ?
(a) MC < MR (b) MC Curve cuts the MR curve from below (c) Both a & b (d) None of the above 35. If a Perfectly competitive firm earns supernormal profits then_______ (a) AR > MR (b) AR < MR
(c) AR = MR (d) None of the above
36. Kinked demand curve is _________
(a) Highly elastic at above the prevailing price
(b) Inelastic at below the prevailing price
(c) both a & b
(d) None of the above
37. Which is the characteristic feature of monopoly ?
(a) Homogeneous goods (b) Strong barriers to entry
(c) Perfect Competition (d) Perfectly elastic demand curve
38. Price discrimination is possible only in________
(a) Monopoly (b) Perfect competition
(c) Oligopoly (d) Monopolistic competition
39. What is the characteristic of monopolistic competition?
(a) Price elasticity is low for the product concerned
(b) Large number of sellers
(c) No degree of control over price
(d) One buyer
40. When TR is at its peak then MR is equal to ______
(a) Zero (b) Positive
(c) Negative (d) None of the above
41. Market consists of _________
(a) Buyer and seller (b) One Price for one product at a given time
(c) Both a and b (d) None
26. According to behavioral Principles.
(a) A firm should not produce at all its total variable costs are not met.
(b) A firm will be making maximum profits by expanding output to the level where marginal revenue is equal to marginal cost.
(c) Both (a) and (b)
(d) None of these
42. Monopsony means
(a) Where there are large firms (b) There is a single buyer
(c) Small number of large buyers (d) Single seller and single buyer
43. A discriminating monopolist to reach equilibrium position, his decision on total output depends upon ________
(a) How much total output should be produce
(b) How the total output should be distributed between the two sub-lmarkets?
(c) Both a & b
(d) None of these
44. Demand curve is horizontal in the case of _______
(a) Monopoly (b) Perfect competition
(c) Imperfect competition (d) Monopolistic Competition
45. Which is not the characteristic feature of expansion phase in business cycle?
(a) Increase in national output (b) Unemployment
(c) Rise in price and costs (d) Boost in business confidence
46. Business Cycle occurs
(a) Periodically (b) In different phases
(c) Both a & b (d) None of the above
47. Which of the following is not the phase of business cycles?
(a) Prosperity (b) Upswing
(c) Reconstruction (d) Depression
48. “Modern business activities are based on the anticipations of business community and are
affected by waves of optimism or pessimism”, according to __________________
(a) Pigou (b) Keynes
(c) Hawtrey (d) Schumpeter
49. Economic activities will be declining in the phase of ________
(a) Expansion (b) Depression
(c) Contraction (d) Peak
50. Due to recession, employment rate ________ and output _________ .
(a) Rises; rises (b) Falls; falls
(c) Rises ; falls (d) Falls; rises
51. The internal causes of business cycle is
(a) Fluctuation in effective demand (b) Technology shocks
(c) Both a & b (d) None
52. According to some economists, ______ are the prime causes of business cycles.
(a) Fluctuations in aggregate demand (b) Fluctuations in investments
(c) Macroeconomic policies (d) All of the above
53. Boom and depression in business cycle are _______
(a) Turning points (b) Equilibrium points
(c) Both a & b (d) None of the above
54. Which is not related to great depression of 1930?
(a) It started in USA
(b) John Maynard Keynes regarded lower aggregate expenditure as the cause
(c) Excess Money supply
(d) Both a & b
55. Economic goods are considered as scarce resources because _______
(a) Inadequate quantity to satisfy the needs of the society
(b) Not Possible to increase in quantity
(c) Limited hands to make goods
(d) Primary importance in satisfying social requirements
56. Which of the following is true about leading indicators?
(a) Measurable economic factors (b) Changes after real output
(c) Both (a) and (b) (d) None
57.
58.
59.
60.
“BUSINESS & COMMERCIAL KNOWLEDGE”
61. The attribute of a profession does not include
(a) Rendering of specialized nature of services
(b) Certificate of service from government
(c) Self imposed code of conduct
(d) All of the above
62. The Companies Act, 2013 provides registration for
(a) One person Company (b) Small Company
(c) Defunct Company (d) All of the above
63. Which of the following is not a feature of LLP
(a) Legal entity separate from its partners
(b) No limit on maximum no of partners
(c) Every Partner is agent of LLP
(d) Register of firm is the administering authority
64. Which of the following is organic objective of business
(a) Economic Value added (b) Fitness of Human resource
(c) Community Service (d) Effective waste handling and disposal
65. Business as institution is ________
(a) Job Creator (b) Job seeker
(c) Both (d) None of the above
66. Which of the following is part of HUF?
(a) Hindu and Sikh family (b) Parsi Family
(c) Both a & b (d) None of the above
67. Which of the following statement is correct with respect to HUF
(a) HUF earns income from salary
(b) Four successive generations of an undivided
(c) HUF enjoys a separate entity status under Income tax act –1961
(d) All of the above
68. PESTLE analysis does not include
(a) Policy (b) Technology
(c) Legal (d) Economic
69. What is not a characteristic of business environment
(a) Complex (b) Static
(c) Multi-faced (d) Far reaching
70. Macro Environment includes ______
(a) Strength (b) Weakness
(c) Opportunity (d) All of the above
71. Internal Environment includes______
(a) Customer (b) Economic
(c) Demography (d) Mission & Objectives
72. Cost Structure of an industry is effected by ________own bargaining power.
(a) Consumer (b) Intermediary
(c) Suppliers (d) Organizations
73. Opportunity is
(a) Inherent capacity (b) Strategic disadvantage
(c) Favourable condition (d) None of the above
74. Competition brings direct benefit to
(a) Customers (b) Suppliers
(c) Intermediaries (d) Government
75. Which of the following is not related to ITC Limited
(a) Vishal Sikha (b) 1910
(c) Kolkata (d) Yogesh Chander Deveshwar
76. Walmart slogan
(a) Save money. Live better (b) Happy life. Good food
(c) Better food. Low cost (d) Good Food. Good life
77. What happened in Microsoft in the year 2014
(a) Satya Nadella succeded on Steve Ballmer (b) Acquired Hardware division of NOKIA
(c) Both (a) & (b) (d) None of the above
78. The Headquarter of Nestle is in
(a) Vevey, Switzerland (b) Basel, Switzerland
(c) Zurich, Switzerland (d) Interlaken, Switzerland
79. Who is chairman of Infosys?
(a) Nandan Nilakeni (b) Vishal Sikha
(c) K.V. Kamanth (d) Sudha Murthy
80. Who is the present MD & CEO of ICICI Bank
(a) Chanda Kochar (b) Shika Sharma
(c) M.K. Sharma (d) Sandeep Bakshi
81. The first appeal of Securities Exchange Board of India
(a) Supreme Court (b) High Court
(c) Securities Appellate Tribunal (d) RBI
82. Which of the following body has been dissolved recently
(a) Planning Commission
(b) National Statistics Commission
(c) Competition Commission of India
(d) Foreign Institution Promotion board
83. Which of the following is not a function of RBI
(a) Monetary Policy
(b) Fiscal Policy
(c) Custodian of Foreign Exchange reserves
(d) Controller of Credit
84. Who was the regulatory body for controlling financial affairs before SEBI
(a) Controller of Capital Issues
(b) Reserve Bank of India
(c) Insurance Regulatory and Development authority of India
(d) Government of India
85. Which of the following is not a subsidiary of Indian Oil Corporation Ltd.
(a) Chennai Petroleum Ltd.
(b) Brahamputra Cracker and Polymer Ltd.
(c) Indian Oil – CREDA Biofuels Ltd.
(d) Indian Catalyst Private Ltd.
86. Which of the following is Return on investment
(a) Dividend (b) Interest
(c) Yield (d) None of the above
87. The opposite of bid is________
(a) Ask/Offer (b) Call
(c) Purchase (d) None of the above
88. Personal selling is done through
(a) Oral communication (b) Written communication
(c) Social media (d) Sign language
89. Carry forward of a transaction from one settlement period to other is
(a) Badla (b) Repo
(c) open Interest (d) None of the above
90. Bull Market is Called __________
(a) A market in which stock price is increasing consistently
(b) A market in which stock price is decreasing consistently
(c) Both a & b
(d) None of the above
91. When two companies come together to expand their business operation in a newly created entity.
(a) Joint Venture (b) Acquisition
(c) Partnership (d) Merger
92. SEBI, RBI & IRDA are
(a) Regulatory Bodies (b) Cluster Bodies
(c) Goal Sector bodies (d) None of the above
93. SEBI function consists of
(a) Quasi Legislative (b) Quasi judicial
(c) both a & B (d) None of the above
“BUSINESS ECONOMICS AND BUSINESS & COMMERCIAL KNOWLEDGE”
1 C 21 C 41 C 61 B 81 C
2 C 22 A 42 B 62 D 82 A
3 D 23 C 43 C 63 D 83 B
4 B 24 C 44 B 64 B 84 A
5 B 25 A 45 B 65 A 85 B
6 B 26 A 46 C 66 C 86 C
7 C 27 A 47 C 67 C 87 A
8 B 28 C 48 A 68 A 88 A
9 C 29 B 49 C 69 B 89 A
10 A 30 D 50 B 70 C 90 A
11 C 31 D 51 A 71 D 91 D
12 B 32 A 52 D 72 C 92 A
13 B 33 B 53 A 73 C 93 C
14 B 34 D 54 C 74 A 94
15 A 35 C 55 A 75 A 95
16 D 36 B 56 A 76 A 96
17 D 37 A 57 77 C 97
18 B 38 B 58 78 A 98
19 B 39 A 59 79 A 99
20 D 40 C 60 80 D 100