TEST PAPER

SUBJECT – Eco & BCK TIME – 3 Hrs.

BATCH – CAFC MARKS –100

1. Oikonomia means
(a) Industry (b) Management of household (c) Services (d) None of these.

2. An economy exists because of two basic facts i.e.__________

(a) Human wants are limited and resources are unlimited
(b) Human wants are unlimited and resources are unlimited
(c) Human wants are unlimited and resources are scare
(d) Human wants are limited and resources are abundant

3. Concept of business economics was given by:

(a) Joel dean (b) Alfred Marshall (c) Adam smith (d) L. Robbins

4. Which of the following is not the subject matter of business economics?

(a) Should our firm be in this business?
(b) How much should be produced and at price should be kept?
(c) How will the product be placed in the market?
(d) How should we decrease unemployment in the economy?

5. Which of these is an example of macro economics:

(a) Problem of unemployment in India
(b) Rising price level in the country
(c) Increase in disparities of income
(d) All of the above

6. Macro Economic is the study of ____________.

(a) All aspects of scarcity
(b) The national economy and the global economy as a whole
(c) Big Business
(d) The decisions of individual business and people

7. Business economy involves theory of business economics with _______.

(a) Normative Economics (b) Business Practices
(c) Micro Economics (d) Macro Economics

8. An economy is called capitalist economy, when_______ is given.

(a) Right to private property
(b) Freedom of Government interference
(c) Freedom of business choices
(d) Discrimination

9. Factors of production are owned by________ in market economies.

(a) Govt. (b) Investors (c) Privately (d) None

10. Economic system is self regulating and run by invisible hands.

(a) Mixed (b) Socialistic (c) Capitalistic (d) Planned

11. Socialist economy is called as________.

(a) Centrally planned economy (b) Mixed economy
(c) Private economy (d) Consumer economy

12. The quantity demanded is always expressed__________.

(a) Separately in isolation (b) Separately with quantity supplied
(c) At a given price (d) None of these
13. The quantity demanded is a________.
(a) Flow (b) Stock
(c) Single isolated purchase (d) Concept without reference to time.

14. Which one of the following set of Commodities represents Complementary goods?
(a) Tea and Sugar (b) Automobile and Petrol
(c) Pen and ink (d) All of the above

15. There is a________ relation between the demand for a product and the price of its substitutes.
(a) Direct (b) Positive (c) Indirect (d) Both (a) & (b)

16. When the price of petrol decreases, people reduce the consumption of diesel, then the goods are:
(a) Complementary (b) Substitutes
(c) Superior (d) Any of the above

17. A Symbolic statement of a relationship between the dependent and the independent variables is called
as_________.
(a) Function (b) Sets (c) Equation (d) Variable

18. Which one of the following is an exception to the law of demand?

(a) Future expectations about prices (b) Demand for necessaries
(c) Speculative Goods (d) All of these

19. The demand for the commodity. Is _________ when a consumer is a habitual consumer.
(a) Relative elasticity (b) Inelastic
(c) Unit elasticity (d) Perfectly elastic

20. For all _________ goods, the income elasticity is positive.

(a) Normal (b) Interior (c) Luxury (d) All of the above

21. If two goods are perfect substitutes for each other, the cross elasticity between them is
(a) One (b) More than one (c) Less than one (d) Infinite

22. Advertising elasticity of demand is typically

(a) Negative (b) Zero (c) Infinity (d) Positive

23. Which of the following statements is correct?

(a) With the help of statistical tools, the demand can be forecasted accurately.
(b) The more the number of substitutes of a commodity, more elastic is the demand.
(c) Demand for butter is perfectly elastic.
(d) Gold jewellery will have negative income elasticity.

24. Which of the following is a property of indifference curves?

(a) Indifference curves are always concave to the origin
(b) Indifference curves slope upwards to the left
(c) Two indifference curves can touch or cut each other
(d) An indifference curve will not touch either the X-axis or Y-axis

25. In a very short period, the supply:

(a) Can be changed. (b) Cannot be changed.
(c) Can be increased. (d) None of the above

26. In the book market, the supply of books will decrease if any of the following occurs except
(a) A decrease in the number of book publishers.
(b) A decrease in the price of the book.
(c) An increase in the future expected price of the book.
(d) An increase in the price of paper used.
27. A horizontal supply curve parallel to the quantity axis implies that the elasticity of supply is:
(a) Zero. (b) Infinite.
(c) Equal to one. (d) Greater than zero but less than one.

28. The total supply of Land is_____ from the point of view of the economy. However, it is relatively_____
view of a firm. from the point of
(a) Perfectly Inelastic, Inelastic (b) Perfectly Inelastic, Relatively Elastic
(c) Perfectly Elastic, Inelastic (d) Perfectly Elastic, elastic

29. Which one of the following is the assumption underlying any production function?
(a) Relationship between inputs and outputs exists for a period of time.
(b) There is a given "State-of-the act" in the production technology.
(c) Whatever input combinations one included in a particular function, the output resulting from their
utilization is at the maximum level.
(d) All of the above.

30. Law of diminishing returns is applicable in:

(a) Manufacturing industry (b) Agriculture
(c) Neither (a) nor (b) (d) Any economic activity at a point of time

31. Suppose, the total cost of production of commodity X is ₹1,25,000. Out of this cost implicit cost is
₹35,000 and normal profits is ₹25,000. What will be the explicit cost of commodity X?
(a) 90,000 (b) 65,000 (c) 60,000 (d) 1,00,000

32. Economic Costs comprises

(a) Accounting Costs (b) Implicit Cost (c) Explicit Cost (d) Both (a) & (b)

33. Theoretically, incremental costs are related to the concept of

(a) Marginal Cost (b) Fixed Cost
(c) Judgmental Cost (d) Semi Variable Cost

34. Economics, the term 'market' refers to a:

(a) Place where buyer and seller bargain a product or service for a price
(b) Place where buyer does not bargain
(c) Place where seller does not bargain
(d) None of the above

35. The Price Elasticity of demand of a firm in Pure Competition is :

(a) Infinite (b) Finite (c) Large (d) Small

36. _________ implies that the time available is adequate for altering the supplies by altering even the
fixed factors of production.
(a) Very Short Period (b) Short Period (c) Long Period (d) Secular Period

37. MR of nth unit is given by :

(a) TRn / TRn1 (b) TRn  TRn1
(c) TRn  TRn1 (d) All of these

38. ABC Ltd. realizes total revenue of ₹6,000 by the sale of 120 units and ₹6050 by the sale of 121 units.
What is the average revenue when ABC Ltd. sells 121 units
(a) 50 (b) 100 (c) 6,000 (d) 6,050
39. From the following table, what will be equilibrium market price?
Price Demand Supply
(in ₹) (Tonnes Per (Tonnes Per
annum) annum)
1 500 200
2 450 250
3 400 300
4 350 350
5 300 400
6 250 450
7 200 500
8 150 550
(a) ₹2 (b) ₹3 (c) ₹4 (d) ₹5

40. Which of the following may lead to changes in demand and Supply?
(a) Income and population (b) Tastes and Preferences
(c) Technology & Prices of Factors of Production (d) All of the above

41. What is the shape of perfectly competitive Average Revenue Curve?

(a) Parallel to X axis (b) Parallel to Y axis
(c) Fall from left to right (d) Rise from left to right

42. Which of the following conditions exhibits long run equilibrium of the industry under perfect
competition?
(a) MR = LMC = AR = LAC =SAC = SMC (b) MR = LMC = AR>LAC
(c) MR = LMC = AR<LAC (d) MR = LMC = AR>SAC

43. In a competitive market, if price exceeds Average Variable Cost (AVC) but remains less than Average
Cost (AC) at the equilibrium, the firm is:
(a) Making a profit
(b) Planning to quit
(c) Experiencing loss but should continue production
(d) Experiencing loss but should discontinue production

44. Which of the following is not a feature of the monopoly market?

(a) Large seller of the product (b) No close - Substitutes
(c) Market power (d) Single seller of the product

45. In a Monopolistic market, there are______________ barriers to entry.

(a) No (b) Negligible (c) Light (d) Strong

46. At price P1, the firm in the figure would produce

(a) Zero output (b) Q3 (c) Q5 (d) Q6

 47. Combination of Monopoly Market and Monopsony Market is called as:
(a) Duopoly Market (b) Oligopoly Market
(c) Bilateral Monopoly Market (d) Monopolistic Market

48. Which of the following statements is incorrect?

(a) Under monopoly there is no difference between a firm and an industry
(b) A monopolist may restrict the output and raise the price
(c) Commodities offered for sale under a perfect competition will be heterogeneous
(d) Product differentiation is peculiar to monopolistic competition

49. If firms in the toothpaste industry have the following market shares, which market structure would best
describe the industry?
Market Share (% of market)
Toothpaste 18.7
Dentipaste 14.3
Shinibright 11.6
I can’t believe its not toothpaste 9.4
Brighter then white 8.8
Pasty stuff 7.4
Others 29.8
(a) Perfect competition (b) Monopolistic competition
(c) Oligopoly (d) Monopoly

50. Greatest depression suffered by economy in which year.

(a) 1924 (b) 1930 (c) 2008 (d) 2009

51. According to___________ trade cycle is a purely monetary phenomenon.

(a) Schumpeter (b) Nicholas Kaldor (c) Keynes (d) Hawtrey

52. The different phases of a business cycle:

(a) Do not have the same length and severity
(b) Expansion phase always last more than ten years
(c) Last many years and are difficult to get over in short periods
(d) None of the above

53. Chinas recent slowdown causes :

(a) Cycle of decline and panic across the world
(b) Countries across the Globe were able to insulate themselves from the crisis
(c) Stock markets in the Emerging Economics largely remained unaffected
(d) Old technology fuelled the economic decline

54. Which of the following is not a variable in the index of leading indicators?
(a) Prime Rate (b) Delayed Deliveries
(c) Construction permits (d) New consumer goods orders

55. Which of the following statement is correct?

(a) No economy follows a perfectly timed cycle
(b) Economy follows a perfectly timed cycle
(c) Most of the economy follows a perfectly timed cycle
(d) Capitalist economy follow a perfectly timed cycle

56. In the long run, a reduction in labour supply would cause output to_________ and the aggregate price
level to________.
(a) Fall, rise (b) Fall, fall (c) Rise, fall (d) Rise, rise.

57. How many phases are their in business cycle?

(a) Four (b) Five (c) One (d) Many
58. Businesses whose fortunes are closely linked to the rate of economic growth are referred to
as__________ business.
(a) FMCG (b) Durable goods (c) Fluctuating (d) Cyclical

59. Which External Factor affect the business cycle?

(a) Population growth (b) Variation in government spending
(c) Money supply (d) Macro economic policies

60. The Stage/phase of the business Cycle is important for:

(a) Making managerial decisions regarding expansion or downsizing.
(b) A new business to decide on entry into the market.
(c) The success of a new product.
(d) All of the above.

61. Business and Commercial Knowledge as a domain is :

(a) Vast (b) Eclectic (c) Ever-evolving and expanding (d) All of the above

62. The BCK is important for the Chartered Accountants (CA). Which of the following Statement(s) is/are
correct in this regard?
(a) The CA cannot develop notions of cost, inventory, revenue, profit is, etc. in case of FMCG business
(b) The CA's shall be able to conduct audit diligently only when they understand the nuances of the
corresponding business
(c) The knowledge of law is not required to CA
(d) All of the above

63. Human activities distinguishable by presence of the livelihood motives are known as……………..
(a) Economic activities (b) Non-economic activities
(c) Emotional activities (d) Sentimental activities

64. Which form of business organisation has a separate legal entity?

(a) Hindu Undivided Family (HUF) (b) Co-operative society
(c) Partnership firm (d) Sole proprietorship

65. ___________Is the hybrid form of business organisation which contains the features of both the
corporate from as well as proprietary form of business organisation.
(a) Partnership (b) Company (c) Sole Proprietorship (d) Limited Liability partnership.

66. Which of the following is not a feature of Private Company?

(a) There are no restrictions on transfer of shares
(b) Minimum number of directors is two
(c) Private companies are exempted from constituting various committees of Board of Directors
(d) It can start business upon incorporation

67. There is a______________ interaction between Business and Business Environment.

(a) Close (b) Close and continuous (c) Close and static (d) Continuous and Static

68. In order to respond appropriately, the organizations must:

(a) Have the Capacity to monitor
(b) Make sense of their environment
(c) Identify and attend the environmental factors
(d) All of the above.

69. A threat is
(a) An unfavourable condition in organization environment which creates risk or damage to the Environment
(b) An inherent limitation or constraint
(c) An unfavourable condition in organization environment which consolidates its strength
(d) None of the above
70. In the PEST framework for environmental analysis what does the letter E stand for?
(a) Ecological (b) Economic (c) Ethical (d) Educational

71. An organization is planning to create a Joint Venture to cope up with environmental uncertainty. This is
an example of the following type of organizational response to its environment.
(a) Administrative Response (b) Collective Response
(c) Competitive Response (d) Micro Environmental Response

72. One of the leading companies in Paint Industry, Asian Paints, was incorporate is in the year
(a) 1962 (b) 1942 (c) 1868 (d) 1980

73. Asian Paints Ltd. has been a market leader in paints since_________.
(a) 1942 (b) 1960 (c) 1967 (d) 1971

74. Bharti Group was started in 1984, when_________ started assembling push-button phones in India.
(a) Sunil Mittal (b) Bharti Mittal (c) Gopal Mittal (d) Gopal Vittal

75. In the Company "Bharat Refineries Ltd." was renamed as "Bharat Petroleum -Corporation Ltd."
(a) April, 1977 (b) August, 1997 (c) April, 1980 (d) August, 1980

76. In relation to pharmaceuticals business, API Stands for at

(a) Active Pharmaceutical Ingredients (b) Action Pharma Integral
(c) Automatic Pharma Integral (d) None of the above

77. GAIL (INDIA) Ltd. was formerly known as

(a) Gas Authority India Ltd. (b) Gas GAIL Ltd.
(c) Natural Gas (India) Ltd. (d) None of these

78. ICICI Bank was originally promoted in __________ by ICICI Limited, an Indian Financial institution.
(a) 1991 (b) 1994 (c) 1995 (d) 1996

79. At the time of attaining freedom in 1947, India witnessed the existence of the problem of………………
(a) Multiplicity of Princely States (b) Lack of Industries
(c) Lack of enough food-grains (d) All of the above

80. Find the odd one out.

(a) Agricultural Policy (b) Industrial Policy
(c) Foreign Trade & Investment Policy (d) Monetary Policy

81. In order to protect Indian products, the Government has imposed Customs Duties. The nature of this
public policy is
(a) Restrictive (b) Regulatory (c) Facilitating (d) Liberal

82. According to_______________ "Public policy is not a decision; it is a course or pattern of activity".
(a) Thomas R. Dye (b) Richard Rose (c) Carl J. Friedrich (d) Martin Luther

83. In India, the Privatization helps in a big way to enhance market potencies by enhancing:
(a) Efficiency (b) Quality (c) Competitiveness (d) All of these

84. In the mid-1980s, the Soviet Union got broken and___________ independent States were formed.
(a) 7 (b) 11 (c) 15 (d) 21

85. Which of the following reasons is/are correct for considering moderately low external value of domestic
currency as conducive for domestic business?
(a) Protecting the domestic industry from competition from imported goods
(b) Making the exports competitive
(c) Tariff-jumping FDI
 (d) All of the above

86. The_____________ is regarded as the watershed development in business facilitation in India.

(a) Economy Policy of 1951 (b) Economic Policy of 1956
(c) Economic Policy of 1991 (d) Economic Policy of 2015

87. Which are is not a function of RBI?

(a) Monopoly of note issue (b) Banker to be govt.
(c) Advance loan to large business houses (d) Controller of credit

88. The RBI_______ Treasury Bills on behalf of______ in order to wipe away excess liquidity in the economy.
(a) Sells, Central Govt. (b) Purchases, Central Govt.
(c) Sells, Ministry of Corporate Affairs (d) Purchases, Finance Ministry.

89. If the current bank rate is 6.25% and RBI decreases it by 20 basis point, then new rate will be:
(a) 6.05% (b) 6.45% (c) 6.23% (d) 4.25%

90. How many members of SEBI should be from RBI?

(a) 4 (b) 3 (c) 1 (d) 2

91. CCI consists of a chairman and__________ members appointed by the Central Government.
(a) Five (b) Six (c) Seven (d) Four

92. The competition commission of India was established on_____________.

(a) 14th August, 2003 (b) 14th September, 2003
(c) 14th October, 2003 (d) 14th November, 2003

93. Carrying forward of transaction form one settlement period to the next without effecting delivery or
payment is called___________.
(a) Badla (b) Beta (c) Blue chips (d) Basket trading

94. The simultaneous purchase and sale of two identical commodities or instruments are called as………….
(a) Amortize (b) Annuity (c) Arbitrage (d) Asset

95. _______is an option that givens to the investor the right but no obligation to buy a particular Stock at
a specified price within a specified time period.
(a) Put Option (b) Call Option (c) Derivative option (d) Badla option.

96. ________ratio is calculated by dividing the market price of the share by the Earnings per share.
(a) EPS (b) DPS (c) P/E Ratio (d) D/P Ratio

97. 4 P's of marketing are:

(a) Plan, Price, Production, Publicity (b) Plan, Production, Place and Pro- motion
(c) Plan, Price, Product, Promotion (d) Product, Price, Place, Promotion

98. Which one of the following are the examples of Fast-Moving Consumer Goods?
(a) Soaps, toothpastes & Hair Oils. (b) Jams, Ketchups & packed Juices.
(c) Ready meal and baked beans. (d) All of the above

99. The form in which government surrendered partial ownership and sold the majority stake to one or
more private entities in course of time.
(a) Disinvestment (b) Displacement (c) Divestment (d) Delegation

100. Who from the following helps a budding business to quickly launch a product and put it in the first lane
of commercial success?
(a) Business incubator (b) Freight freights
(c) Business accelerator (d) Merchandiser
Answer Key:

1 (b) 2 (c) 3 (a) 4 (d) 5 (d) 6 (b) 7 (b) 8 (a) 9 (c) 10 (c)
11 (a) 12 (c) 13 (a) 14 (d) 15 (d) 16 (b) 17 (a) 18 (d) 19 (b) 20 (a)
21 (d) 22 (d) 23 (b) 24 (d) 25 (b) 26 (b) 27 (c) 28 (b) 29 (d) 30 (d)
31 (b) 32 (d) 33 (a) 34 (a) 35 (a) 36 (c) 37 (c) 38 (a) 39 (c) 40 (d)
41 (a) 42 (a) 43 (c) 44 (a) 45 (d) 46 (a) 47 (c) 48 (c) 49 (c) 50 (b)
51 (d) 52 (a) 53 (a) 54 (a) 55 (a) 56 (a) 57 (a) 58 (d) 59 (a) 60 (d)
61 (d) 62 (b) 63 (a) 64 (b) 65 (d) 66 (a) 67 (b) 68 (d) 69 (a) 70 (b)
71 (a) 72 (b) 73 (c) 74 (a) 75 (b) 76 (a) 77 (a) 78 (b) 79 (d) 80 (d)
81 (a) 82 (b) 83 (d) 84 (c) 85 (d) 86 (c) 87 (c) 88 (a) 89 (a) 90 (c)
91 (b) 92 (c) 93 (a) 94 (c) 95 (b) 96 (c) 97 (d) 98 (d) 99 (a) 100 (c)