First Year Business Economics MCQ: FYBCOM 2020

First Year Business Economics MCQ

Select the best answer from the given options

1. Perfectly competitive firms face…………..demand curves.  a) Horizontal b) Positively sloped  c) Vertical d) Negatively
2. An oligopoly is a form of market in which there exists…………..  a) A single firm b) two firms  c) few firms d) many firms
3. Price discrimination is used in the case of…………..  a) Bus tickets b) Electricity charges  c) Sport events d) All of the above
4. Demand for a product of a firm in perfect competition is………….  a) Relative elastic b) Unitary elastic  c) Perfectly elastic d) Relatively inelastic
5. The striking difference between perfect competition and monopolistic competition is………….  a) Product differentiation b) lesser profit  c) Monopoly elements d) Supply management
6. In the short run to stay in business, the firm must cover……….  a) Total cost b) Fixed cost  c) Variable cost d) Normal profit
7. In a monopolistically competitive market the number of firms is ……………..  a) Few b) Large  c) One d) Two
8. Capital budgeting relates to………………investment.  a) Short term b) Medium term  c) Long term regular
9. Transfer pricing is regulated by……………….  a) Government b) MNCs c) Private sector d) None of these
10. Payback period method is more suitable to……………….  a) The short run b) The long run  c) Both a and b d) Neither a and b
11. The value expected to be achieved from the amount invested is known as……………  a) Internal rate b) Net present value  c) Payback period d) Replacement investment
12. A project would be rejected if its NPV is………………  a) Zero b) Negative c) Positive  d) One
13. The incremental principle states that an investment decision is profitable if……..  a) Revenue increases more than cost b) Cost reduce more than revenue c) Both (a) and (b)  d) None of the above
14. In case of the normal goods demand curve is__________. a) Upward sloping b) downward sloping  c) Vertical straight line c) horizontal straight lines
15. Short-run in production function includes__________.  a) Onlyfixed factors b) only variable factors  c) Both fixed and variable factors d) None of the above
16. Which of the following is a limitation of the consumer clinic method of demand forecasting? a) Abnormal consumer behavior b) Expensive c) Neither (a) nor (b) d) Both (a) and (b)
17. If the demand is price elastic, then……….  a) a rise in price will raise total revenue  b) a fall in price will raise total revenue c) a fall in price will increase the quantity demanded marginal  d) a rise in price won’t have any effect on total revenue
18. Short-run production function includes……….  a) only fixed factors b) only variable factors c) both fixed and variable factors d) None of the above
19. Break-even point is reached when a form________.  a) Earns zero profit b) cover variable profit c) Coversfixed cost d) all of the above
20. The market-clearing price is also called the________.  a) Current price b)prevailing price c) Equilibrium price  d) None of the above
21. Percentage change in quantity demanded divided by percentage change in price is called______.  a) Income elasticity of demand b) price elasticity of demand c) Price elastic of supply d) elasticity of substitution
22. The total amount of output produced is called_________. a) Total supply b) total product c) Both A and B d) None of the above
23. The rent of a factory is an example of________.  a) Variable cost b) Fixed cost c) Both A and B d) neither a nor b
24. ……..refers to an unavoidable cost which cannot be recovered. a) Opportunity cost b) Sunk cost c) Real cost d) Implicit cost
25. Demand for a product of awesome in perfect competition is ___________. a) Relatively elastic b) Unitary elastic c) Perfectly elastic d) Relatively inelastic
26. In short run to stay in business the form must cover_________.  a) Total cost b) variable cost c) Fixed cost  d) normal profit
27. Under imperfect competition____________. a) There is necessarily one producer  b) Individual sellers have no control over the price of the goods and services they produced c) Individual seller have control over the price of the goods and services they produce d) None of the above
28. If we wear examining a market that had three producers, use would call that market_________. a) Perfect competition b) Monopolistic competition c) Oligopoly d) Monopoly
29. Monopolistic competition resembles perfect competition in___________. a) There are substitute for products  b) There are many forms  c) entry and exit is easy  d) all of the above
30. Price discrimination will _______________. a) leads to higher price  b) occur when the same product is sold to the different by a different price  c) result in firms charging the same price to all the consumers d) both a and b
31. under marginal cost pricing____________. a) P=MC  b) P= MR  c) P= AC  d) all of the above
32. Investment to replace obsolete equipment is generally done for_____________. a) the expansion of the production capacity b)expansion into the new markets c) diversification into the new production lines d) None of the above
33. payback period methods is more suitable to____________. a) the short run  b) the long-run  c)both A and B  d) neither a and b
34. A project is profitable if the IRR is____________. a) greater than the market rate of interest  c) less than the market rate of interest c) equal to the market rate of interest d) all of the above

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Reference: Manan Prakashan, Smart Notes