Question 1

The shape of average cost curve is ______________&#10;A)A - Shaped&#10;B)C - Shaped&#10;C)U - Shaped&#10;D)L - Shaped

Accepted Answer

The average cost curve is typically U-shaped due to economies and diseconomies of scale. Initially, average costs decrease as output increases due to spreading fixed costs over more units (economies of scale). Eventually, average costs increase with further increases in output due to inefficiencies (diseconomies of scale).

Question 2

In the long - run there is no _______________ cost&#10;A)Variable Cost&#10;B)Fixed Cost&#10;C)Actual Cost&#10;D)None of these

Accepted Answer

In the long run, all costs are variable, and there are no fixed costs because firms can adjust all inputs and factors of production.

Question 3

Which is the first derivative of the TC function.&#10;A)AC&#10;B)MC&#10;C)STC&#10;D)SAC

Accepted Answer

The first derivative of the Total Cost (TC) function is the Marginal Cost (MC), which represents the change in total cost that arises when the quantity produced changes by one unit.

Question 4

TC=a+bQ is a ________________ Cost function&#10;A)Cubic&#10;B)Quadratic&#10;C)Linear&#10;D)None of these

Accepted Answer

The given cost function TC = a + bQ is a linear function because it graphs as a straight line, where 'a' is the fixed cost and 'bQ' represents the variable cost that changes linearly with the quantity 'Q'.

Question 5

When AC increases MC will___________________&#10;A)increase&#10;B)decrease&#10;C)constant&#10;D)None of these

Accepted Answer

When Average Cost (AC) increases, it implies that the cost of producing each additional unit is increasing, which directly impacts the Marginal Cost (MC), causing it to increase as well. MC is the cost of producing one more unit of a good, and if the overall average cost is rising, the cost of additional units is also likely to rise.

Question 6

Which of the following is not an example for durable goods&#10;A)Clothes&#10;B)Shoes&#10;C)Houses&#10;D)Food

Accepted Answer

Durable goods are items that don't wear out quickly and provide utility over time, unlike non-durable goods which are consumed or have a short life span. Food is a non-durable good because it is consumed quickly and needs to be replaced frequently.

Question 7

Autonomans demand is also known as __________________ demand&#10;A)Actual&#10;B)Market&#10;C)durable&#10;D)Direct

Accepted Answer

Autonomous demand is also known as direct demand because it refers to the demand for goods and services that are directly consumed by the end user.

Question 8

When tax rate increase the supply of products _______________&#10;A)Decreases&#10;B)Increases&#10;C)Remains constant&#10;D)None of these

Accepted Answer

When tax rates increase, the cost of production for suppliers often increases as well. This can lead to a decrease in supply because it becomes more expensive for companies to produce and sell their products at the same price.

Question 9

The shape of a demand curve is _________________&#10;A)Upward Sloping&#10;B)Parallel to X - axis&#10;C)Parallel to Y - axis&#10;D)Downward slopping

Accepted Answer

The shape of a demand curve is typically downward sloping, reflecting the inverse relationship between price and quantity demanded. As the price of a good or service increases, the quantity demanded usually decreases, and vice versa.

Question 10

The demand curve for inferior good is ____________________&#10;A)Positively sloped&#10;B)Negatively slaped&#10;C)Vertical to axis&#10;D)Horizontal to axis

Accepted Answer

The demand curve for an inferior good is negatively sloped, indicating that as income decreases, the demand for the inferior good increases, and as income increases, the demand for the inferior good decreases. This is consistent with the general law of demand, which states that there is an inverse relationship between the price of a good and the quantity demanded, but in the case of inferior goods, the income effect also plays a significant role.

Question 11

Unitary elasticity of demand is&#10;A)Zero&#10;B)Equal to one&#10;C)Greater than one&#10;D)Less than one

Accepted Answer

The answer of Unitary elasticity of demand is&#10;A)Zero&#10;B)Equal to one&#10;C)Greater...

Question 12

Which one is not an exception to the Law of Demand&#10;A)Normal good&#10;B)Ignorance&#10;C)Inferior good&#10;D)Articles of Distinction

Accepted Answer

The answer of Which one is not an exception to...

Question 13

When the demand curve is a rectangular hyperbola, it represents&#10;A)Perfectly elastic demand&#10;B)Unitary elastic demand&#10;C)Perfectly inelastic demand&#10;D)Relatively elastic demand

Accepted Answer

The answer of When the demand curve is a rectangular...

Question 14

The horizontal demand curve represents&#10;A)Perfectly elastic demand&#10;B)Unitary elastic demand&#10;C)Perfectly inelastic demand&#10;D)Relatively elastic

Accepted Answer

The answer of The horizontal demand curve represents&#10;A)Perfectly elastic demand&#10;B)Unitary...

Question 15

Who is the present governor of RBI?&#10;A)Pranab Mukherji&#10;B)Kapil Sibal&#10;C)Man Mohan Singh&#10;D)Raghu Ram Rajan

Accepted Answer

The answer of Who is the present governor of RBI?&#10;A)Pranab...

Question 16

What do you call the cost incurred in past?&#10;A)Book cost&#10;B)Historical cost&#10;C)Actual cost&#10;D)Fixed cost

Accepted Answer

The answer of What do you call the cost incurred...

Question 17

Who is the lender of the last resort?&#10;A)Bank of India&#10;B)Indian Bank&#10;C)Reserve Bank&#10;D)State Bank

Accepted Answer

The answer of Who is the lender of the last...

Question 18

Which bank is called Banker's Bank?&#10;A)RBI&#10;B)SBT&#10;C)SBI&#10;D)ICICI

Accepted Answer

The answer of Which bank is called Banker's Bank?&#10;A)RBI&#10;B)SBT&#10;C)SBI&#10;D)ICICI...

Question 19

Which is the system followed by RBI with regard to note issue?&#10;A)Fixed Minimum System&#10;B)Fixed System&#10;C)Fixed minimum Reserve System&#10;D)None of these

Accepted Answer

The answer of Which is the system followed by RBI...

Question 20

Which bank introduced credit card for the first time in India&#10;A)Central Bank of India&#10;B)Corporate Bank&#10;C)Syndicate Bank&#10;D)None of these

Accepted Answer

The answer of Which bank introduced credit card for the...

Question 21

What you call the cost incurred in producing an additional unit of output&#10;A)Average cost&#10;B)Marginal cost&#10;C)Social cost&#10;D)Sunk Cost

Accepted Answer

The answer of What you call the cost incurred in...

Question 22

Which is the biggest public sector Bank in India&#10;A)SBI&#10;B)SBT&#10;C)IDBI&#10;D)ICICI

Accepted Answer

The answer of Which is the biggest public sector Bank...

Question 23

What is the name of the bank account opened by non-resident Indians&#10;A)NRI a/c&#10;B)NRO a/c&#10;C)Savings a/c&#10;D)None of these

Accepted Answer

The answer of What is the name of the bank...

Deck 2: Economics and Banking